NHIF Blames Sh368m Overpayments on "Typing Errors"

Kenya’s National Health Insurance Fund (NHIF) is embroiled in a financial scandal after a recent audit revealed a Sh368 million discrepancy in claim payouts. The Auditor-General, Nancy Gathungu, unearthed the issue during an investigation into the Fund’s activities for the year ending June 2023.

According to the audit, NHIF paid out a staggering Sh814.9 million in claims, while hospitals only billed the Fund for Sh447.12 million through ten specific schemes, resulting in a discrepancy of Sh367.7 million.

“Review of payment data revealed that the hospitals billed Sh447,122,141 against claims paid amounting to Sh814,893,467 resulting to unexplained variance of Sh367,771,326,” Ms Gathungu stated in her report on NHIF.

The NHIF attempted to explain the discrepancy by attributing it to “typing errors” made by hospital clerks while entering claim amounts into the electronic system. However, the audit found no evidence to support this claim. Furthermore, NHIF could not demonstrate any efforts to reconcile the billed amounts with the claims paid or recover any potential overpayments.

“Although management attributed the variance to typing errors made by hospital clerks while inputting bill amounts in the e-claim system, there was no evidence of reconciling the billed amount to claims paid or requests for refunds for overpayments,” Gathungu added.

The excess payments were made under the National Police Service, NHC, UHC, civil servants, Edu Afya, county and parastatal schemes.

It has emerged that the NHIF management paid Sh51 million for one patient who was admitted to different hospitals at the same time. A review by the auditor revealed that the amount was for 2,808 claims purported to be for the same patient.

The audit also identified irregularities within the Linda Mama program, a government initiative that provides free childbirth services for all women in Kenya. Out of Sh37.1 million billed by hospitals for the program, NHIF inexplicably paid Sh91.6 million, resulting in an excess payout of Sh54.5 million.

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The National Hospital Scheme (NHS) also showed signs of mismanagement. Hospitals submitted claims totaling Sh280.6 million, yet NHIF disbursed Sh486.6 million – an unexplained excess of Sh205.9 million.

The audit also exposes that out of a Sh12 billion debt owed to healthcare providers, Sh2.9 billion was found to contain “duplicated healthcare providers with the same name but different outstanding amounts and different hospital codes.” The audit also flags instances where hospitals are raising claims five years after lapse of the 30-day period, within which facilities must submit claims.

These findings come at a critical juncture, as President William Ruto’s administration pushes for the rollout of a new Social Health Insurance Fund to replace NHIF. While the rollout has been delayed until October, registration is set to begin on July 1st.

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