Duale exposes 4 tricks used by hospitals to defraud SHA

Health Cabinet Secretary Aden Duale has revealed how hospitals have devised elaborate schemes to defraud the Social Health Authority (SHA), siphoning billions of shillings meant for patient care.

Speaking on Monday, August 25, 2025, at Afya House in Nairobi, Duale said the fraud has undermined the TaifaCare programme and placed a heavy burden on taxpayers.

You might also like

Health & Fitness

How to protect yourself from airborne diseases in Kenya today

Health & Fitness

Health effects caused by toxins for poor grain storage

Health & Fitness

Warning signs mothers should not ignore after C-Section

The tricks were exposed during an audit exercise.

Upcoding

One common practice is upcoding, where hospitals intentionally submit codes for more severe or expensive diagnoses and procedures than those actually performed. This allows providers to receive larger payments than warranted, diverting public funds away from genuine healthcare services.

Falsification of Records

Another widespread method is the falsification of records, in which hospitals submit altered or false medical documents to secure higher reimbursements.

This contravenes Section 48(5) of the Social Health Insurance Act, 2023, and Regulation 34(2) (f) of the Social Health Insurance Regulations, 2024.

Conversion of Outpatient to Inpatient

Hospitals have also been converting outpatient visits into inpatient claims. Routine visits are billed as full hospital admissions to inflate reimbursements, a manipulation that further drains public resources.

This is usually done to receive a higher reimbursement from insurance companies, including government programs.

Phantom Billing

The most serious scheme is phantom billing, where hospitals claim payments for services, procedures, or medical equipment that were never provided. Unlike upcoding, which exaggerates actual services, phantom billing invents them entirely.

He cited specific cases, including Nabuala Hospital in Bungoma, which submitted false claims for multiple Caesarean sections on the same patient, and Kotiende Medical Centre in Homa Bay, which fabricated clinical documents signed by one staff member for both day and night shifts over consecutive days.

In Nairobi, Vebeneza Medical Centre converted outpatient visits into inpatient claims and made suspicious admissions for employees, while Jambo Jipya Hospital in Mtwapa filed claims for Caesarean sections when patients had normal deliveries.

Duale emphasised that since the rollout of TaifaCare in October 2024, billions of shillings in claims have come under scrutiny.

He urged Kenyans to report suspicious activities through SHA’s toll-free line 147, noting that public vigilance is crucial in protecting taxpayer resources. “Our work has just begun. We will not allow fraud to rob Kenyans of their right to quality healthcare,” he concluded.