The Social Health Authority (SHA) paid nearly KSh 92 million in legal fees to recover claims worth only KSh 13.9 million, a disparity at the center of a parliamentary probe into the state insurer.
- •Lawmakers examining the Auditor-General’s report said the authority’s legal costs ballooned to KSh 247.8 million including payments that appear to breach the Advocates’ Remuneration Order.
- •The inquiry led by the Public Investments Committee on Social Services, Administration and Agriculture, also revisited a multi-storey car park whose price jumped from KSh 909 million to KSh 3.97 billion; a 337% escalation that has yet to be explained despite an earlier referral to the Ethics and Anti-Corruption Commission (EACC).
- •SHA CEO Dr. Mercy Mwangangi Officials told the committee that the agency inherited incomplete records from the old NHIF and is undertaking reforms, but lawmakers warn that the pattern of overpayments, missing documentation, and project inflation points to systemic rot rather than teething problems.
“Where is the value for money when you pay Kshs 77 million to collect Kshs 13 million?” asked Emmanuel Wangwe, MP for Navakholo.
The committee also found that the authority disbursed KSh 5.83 million in board allowances without attendance registers or signed minutes, raising suspicion of fictitious meetings.
“If you say that the Board was paid five million, this means many deserving Kenyans were denied an opportunity to be treated,” Ndhiwa MP Martin Peters Owino stated.
Lawmakers said the audit paints a picture of an institution repeating the excesses of its predecessor, the disbanded National Health Insurance Fund (NHIF). Meanwhile, SHA is struggling to garner public trust after revelations that ghost hospitals scooped millions of shillings during disbursements.
“The Finance Director has let down the CEO and the institution by failing to cooperate with auditors and provide proper responses,” Nominated MP, Bishop Kosgei said.
The SHA Controversies
Last month, a section of private hospitals across the country suspended services for SHA beneficiaries, saying the authority has failed to pay billions of shillings in verified claims.
The Rural and Urban Private Hospitals Association (RUPHA), which represents more than 700 facilities, insists the government owes KSh 43 billion, with another KSh 24 billion still under review. Hospitals accuse the authority of rejecting KSh 10.6 billion in claims without due process, forcing them to demand cash from patients who had already paid their monthly premiums.
The Auditor-General had also flagged serious irregularities in the Social Health Authority’s (SHA) procurement of a KSh104 billion healthcare digitization system, citing breaches of transparency and fair competition laws.
The audit found that the contract was single-sourced, lacked clear deliverables, and did not outline the number of facilities covered or the scope of training for health workers despite a KSh7 billion allocation for capacity-building.
The consortium of private hospitals has also taken a jab on the digitization system, faulting its eClaims platform-designed to detect fraud-for blocking legitimate reimbursements while approving false ones, losses that insiders estimate at KSh 5 billion.
The Social Health Authority (SHA), launched a year ago to anchor Kenya’s universal health coverage program, still operates on a controversial model that critics have labeled unsustainable.