NHIF under Radar for Irregular Staff Promotions and Theft, AGAIN

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The National Hospital Insurance Fund (NHIF) is on the spot over myriad of ethical issues, first is its new organizational structure that has seen various staff promoted to senior positions without the requisite qualifications and against the parameters laid out by the Public Service Commission for the promotion of public officers to senior positions and secondly, investigation into four separate allegations of theft of funds at the national health insurer.

The investigation is likely to implicate the scaling up of Universal Health Coverage, which is one of the Big Four agenda as the DCI is investigating the fraudulent acquisition of public property which former NHIF chief executive Geoffrey Gitau Mwangi was accused of allegedly blocking investigations into corruption at the insurer. The DCI, in a letter dated September 10, 2020, stated that it was conducting investigations into allegations of fraud involving healthcare providers in Kenya.

The appointment of directors and heads of department, some of whom have moved up five job groups without having the PSC qualifications has raised eyebrows in the firm from investigators. In an internal memo dated September 22, 2020, CEO Peter Kamunyo announced the new organizational structure, which is part of Health Financing Reforms Expert Panel report that indicates that the fund has weaknesses that affect its operations.

“The current arrangement does not adequately cover all core functions that are needed to make the NHIF a strategic purchaser. Second, the structure is hierarchical and functionally fragmented.”

This however aren’t first time NHIF has faced scrutiny and investigation as matter of fact, in march 2020, A Health Financing Reforms Expert Panel (Hefrep) report indicated that the fund has several organizational weaknesses that affect its operations. Situation is further compounded by lack of a substantive chief executive since 2018, when the fund’s board sent the then boss Geoffrey Mwangi and acting Finance Director Wilbert Kurgat on compulsory leave to pave the way for investigations into the loss of billions of shillings

“The current arrangement does not adequately cover all core functions that are needed to make the NHIF a strategic purchaser. Second, the structure is hierarchical and functionally fragmented. As a result, the different departments and units operate in silos with very little coordination and communication. This results in bureaucratic inefficiencies,” reads the report.

In February still, DCI acted on a tip from NHIF regarding small clinic in Umoja, Nairobi that In the last three years clinic has earned Sh63 million from the National Hospital Insurance Fund (NHIF) and has 531 registered clients from a government agency, earning it close to Sh6 million every three months. Directorate of Criminal Investigations (DCI) and internal auditors commissioned by the NHIF board doubted its capacity to warrant such huge payments from the institution tasked with providing public health insurance.

In February of 2019 in what appears as grand scheme in defrauding the insurer, The National Hospital Insurance Fund (NHIF) could have lost more than Sh10 billion in false medical claims investigations revealed .Sources said the figure had been flagged as fraudulent and was part of about Sh50 billion paid to NHIF by Treasury as capitation premiums for medical cover for civil servants, Kenya Police Service, National Youth Service and Kenya Prisons Service since 2013.

Further, with news that the World Bank will be pumping in Sh40 billion as part of its plan to align the fund to the universal healthcare (UHC) programme, the NHIF board has been forced to take steps to curb excessive leaks and restore the fund’s credibility. In the 2016-17 financial year, the fund paid out Sh27 billion to healthcare providers, and with more than 20 fraud cases registered last year alone, the board is aware that a significant portion of these payments were based on fraudulent claims. In a past interview with the Financial Standard, outgoing Health Cabinet Secretary Sicily Kariuki said one of the challenges NHIF faces is easy-come-easy-go money. This has further been exacerbated by years of mismanagement at the fund, as well as undue influence from cartels, including politicians and private insurance companies who want a piece of the pie.

The investigations are focusing on reports that some rogue NHIF officials might have colluded with hospitals to generate false medical bills for workers who had never sought treatment. The detectives were said to have stumbled on a pile of documents related to premiums from special medical schemes worth Sh12.7 billion annually in which it was suspected that some NHIF officials and hospitals’ administrations conspired to double-charge the Government in medical bills.


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