The National Hospital Insurance Fund (NHIF) building in Nairobi, Kenya/ Courtesy. 

NAIROBI Kenya, Oct 27- Hospitals and healthcare providers caught defrauding the National Hospital Insurance Fund (NHIF) will lose their accreditation permanently in new changes to the law.

These changes introduced under the National Hospital Insurance Fund (Amendment) Bill that was passed into law last month and is awaiting President Uhuru Kenyatta’s signature, are aimed at protecting the scheme from fraud. 

“Any declared hospital which knowingly or fraudulently alters or falsifies any information with the intent to defraud the board or to obtain any benefit that it is not entitled to under this Act, commits an offence and is liable on conviction to removal from the register of empaneled and contracted healthcare providers,” says an amendment to the NHIF Act.

Currently, hospitals caught defrauding the state-backed insurer are fined Sh500,000 or suspended from the NHIF for not more than five years.

The NHIF loses up to Sh16.5 billion annually through fraudulent and fictitious claims from individuals and hospitals which are mainly filed for surgeries, MRIs and CT Scans.

“We have been experiencing fraudulent cases and attempts worth a lot more, which is quite disappointing,” NHIF CEO Peter Kamunyo said early this year.

The NHIF has in recent months flagged accredited hospitals countrywide for filing fictitious claims and padding up numbers to increase their payouts.

Between January and March this year, it blacklisted 15 health centres based in Nyamira, Homa Bay, and Migori counties for trying to defraud it of Sh27 million.  

Nine of them claimed to have performed various operations and procedures while others were found to be substandard and did not meet the minimum threshold for admitting patients. In May, investigations showed that a Kisumu-based hospital used fake school rubber stamps, fake birth certificates, and school letterheads to defraud the NHIF.

Under the NHIF Act of 1999, hospitals that do not inform patients they have been blacklisted from the cover cannot charge patients amounts that are more than the difference between the actual cost of the service and what the NHIF would have contributed had the hospital not been suspended.

Under the amendment Bill, MPs also doubled the fine for fraudsters caught impersonating NHIF-enrolled members.

A sample of a National Hospital Insurance Fund membership card/ Courtesy. 

Persons found fraudulently using the scheme to settle medical bills face a Sh1 million fine or a two-year jail term or both.

The state had pushed for a Sh10 million fine or three years in jail or both for those found guilty of impersonation in the wake of the increasing losses.

Impersonation involves NHIF members giving their cards to patients not eligible for treatment using the State insurer’s services. Some hospitals have also been reported to be lying about their bed numbers.

The state insurer has enlisted detectives from the Directorate of Criminal Investigations to probe the loss of up to Sh500 million every month through fictitious claims.

The insurer in June rolled out mass biometric registration for its 8.9 million members and their dependents to tackle fraud and speed up payment of claims.

Use of the NHIF card and national identity card as the mode of identification has for years provided loopholes for fraudulent claims.

The State-backed insurer initially targeted having all its accredited hospitals switch to fingerprint identification by July 11, 2021 but faced opposition from rural hospitals.

The hospitals said that the NHIF rolled out the fingerprint registration without consultation and gave a short compliance notice, blocking the public from accessing medical services.

But the NHIF said the e-claim system was not new and had over the years been used by contracted hospitals to request for pre-authorisations before offering services to NHIF members and their beneficiaries

In the financial year ended June 2021, the NHIF collected Sh61.53 billion from its 8.998 million active members and paid out Sh54.66 billion in claims.