Health Cabinet Secretary Aden Duale. Photo/X
By Daisy Okiring
The Ministry of Health has intensified its crackdown on fraudulent claims in the Social Health Authority (SHA) following the closure of hundreds of facilities accused of submitting false claims and misusing public funds.
Health Cabinet Secretary Aden Duale revealed that at least 728 facilities had been closed while 301 others were downgraded in an ongoing nationwide audit. The crackdown comes amid growing public concern over alleged misuse of billions of shillings meant for the Social Health Insurance Fund (SHIF) and the Primary Healthcare Fund (PHC).
Billions Lost to Fraud
In a press briefing on Monday, Duale confirmed that claims worth Ksh10.6 billion had been rejected due to fraudulent activity and non-compliance. He said investigations revealed widespread manipulation of medical records, falsification of patient data and billing for non-existent services.
“Claims worth Ksh10.6 billion have been rejected due to fraudulent activities or non-compliance. This action is taken under Section 48(5) of the Social Health Insurance Act, 2023, which outlines penalties for providers who knowingly or fraudulently alter information to defraud the Authority,” Duale said.
The CS added that since assuming office in April 2025, the Ministry had introduced a digital claims management system powered by artificial intelligence to flag irregularities. The system has already detected cases of upcoding, converting outpatient visits into inpatient admissions, and phantom billing.
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High-Profile Cases
Several hospitals have been directly implicated. Nabuala Hospital in Bungoma was cited for falsifying claims involving multiple Caesarean sections on the same patient. In Homa Bay, Kotiende Medical Centre was found to have fabricated documents, while in Nairobi, Vebeneza Medical Centre allegedly converted outpatient visits into inpatient claims.
In Mtwapa, Jambo Jipya Hospital is accused of submitting fraudulent claims for normal deliveries disguised as Caesarean sections. In Mandera, three facilities—Al-Masry Nursing Home, Care Connect Hospital and Zamzam Nursing Home—allegedly colluded to submit over 300 false claims for patients admitted on the same dates.
The hospitals are yet to formally respond to the accusations. Investigations by the Kenya Medical Practitioners and Dentists Council (KMPDC) and SHA are still ongoing.
Funds Under Review
Duale further revealed that health facilities had submitted claims worth Ksh82.7 billion under SHIF. Out of this, Ksh53 billion has already been paid while Ksh6.4 billion is awaiting disbursement. An additional Ksh3 billion worth of claims is under review for missing documents and Ksh2.1 billion is under investigation for possible fraud.
Facilities under the Primary Healthcare Scheme submitted claims worth Ksh9 billion, with Ksh7.7 billion already settled.
Duale said the Ministry’s new digital system was central to the crackdown. It uses artificial intelligence to detect anomalies and flag suspicious activity at every stage of claims processing.
“The primary function of our digital system is to detect fraud. We have seen facilities attempt to cheat the system, but our digital architecture is designed to pick up irregularities and stop the loss of funds,” he said.
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Ongoing Crackdown
The Ministry has vowed to continue the clean-up, promising to degazette at least 45 more facilities flagged for fraudulent activity. In June, SHA had already suspended 40 hospitals after forensic audits raised red flags.
The Kenya Association of Insurers estimates that 30 per cent of medical payouts in Kenya are linked to fraud. Globally, healthcare fraud accounts for up to 15 per cent of sector expenditures.
Duale stressed that those found guilty of defrauding SHA funds would face legal consequences under the Social Health Insurance Act, 2023.
Protecting Public Funds
The CS said the crackdown was about safeguarding taxpayer money and restoring public confidence in Kenya’s new universal health care system.
“Our intensified war against fraud has already seen hundreds of facilities shut down. This is about protecting public resources and ensuring Kenyans get value for money in healthcare,” he said.
The Ministry said it would continue strengthening monitoring, auditing and enforcement to ensure funds are used for genuine healthcare services.
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