40 health facilities suspended over fraudulent SHA claims

40 hospitals have been suspended by the Ministry of Health (MoH) following the uncovering of widespread fraudulent activities involving claims submitted to the Social Health Authority (SHA).

This brings the total number of suspended facilities to 75 in less than one month, marking the most significant crackdown on healthcare fraud in recent years.

Speaking during a press briefing on Friday, Health Cabinet Secretary Aden Duale stated that the action follows a comprehensive audit and forensic review of claims submitted by facilities flagged for suspicious billing practices. The findings revealed multiple and grave violations of the Social Health Insurance Act, 2023, as well as breaches of the contractual obligations binding providers to SHA.

“This crackdown sends a clear message: fraud and abuse will not be tolerated in our healthcare system. Every shilling meant for patient care must be protected. We are committed to ensuring that the Social Health Authority remains a trusted institution - one that delivers quality care, safeguards public funds, and operates with integrity. The actions we are taking today are necessary to restore accountability and ensure that Kenyans receive the services they deserve,” said Dr Elizabeth Mutunga, the Principal Secretary for Health.

Just weeks earlier, on June 30, MoH had also shut down 35 private hospitals across the country over similar allegations. The affected facilities, located in Kisumu, Bungoma, Busia, Nairobi, Kilifi, Mandera, Wajir, and Kajiado counties, were found to have submitted duplicate claims in a coordinated scheme to defraud SHA, the public health insurer established under the UHC reforms.

The fraudulent activities uncovered include several serious offences that threaten the financial sustainability of SHA, undermine public trust in the national health system, and divert critical resources away from patients who genuinely need care.

One of the most egregious forms of fraud identified is upcoding - a practice where facilities submit claims for more expensive procedures than those performed. In one Nairobi facility, a claim of Sh201,600 was submitted for a TURBT procedure, yet records indicated that the patient underwent an open prostatectomy valued at Sh89,600, resulting in an unjustified inflation of over Sh112,000. This directly contravenes Clause 16.1.1 of the SHA contract and Section 48(5) of the Social Health Insurance Act.

The audit also exposed cases of falsification of patient records, including documentation that placed patients in multiple facilities simultaneously. A facility in Bungoma, for example, submitted fraudulent documentation to support claims for services never rendered - a violation of Clause 16.1.8 and Regulation 34(2)(f).

In Nairobi and Homa Bay, certain facilities were found to have falsely converted routine outpatient visits into inpatient claims, to bill SHA at a higher rate - a deliberate manipulation of service classification that breaches Regulation 34(2)(b).

Equally concerning were incidents of collusion and ghost billing. In Mandera County, four facilities worked together to submit multiple claims for the same patient, in some cases billing for individuals who never received care. These violations fall under Clause 16.1.2 and Regulation 34(2)(g).

As a result of these findings, SHA, acting under Section 48(6) of the Act, has suspended all 40 facilities implicated in the latest phase of the audit, effective immediately. The full list has been published in Kenya Gazette No. 168, dated 7th August 2025. While under suspension, the facilities will not receive any payments, reimbursements, or benefits from SHA. Additionally, SHA has launched surcharge recovery proceedings to recover public funds fraudulently claimed.

The audit further revealed direct involvement of individual healthcare professionals in facilitating fraudulent activities. A total of eight doctors (based in Nairobi, Bungoma, and Kilifi) and four clinical officers (from Nairobi and Homa Bay) have been implicated. In line with Clause 16.2.5 of the SHA contract, their access to SHA digital platforms has been withdrawn with immediate effect.

The Ministry reminded all healthcare workers that no medical procedure is payable by SHA without prior authorisation via a One-Time Password (OTP). It said any healthcare provider whose credentials are used to submit or authorise fraudulent claims will be held personally accountable.

To ensure accountability and appropriate legal redress, the Ministry has submitted the names of the suspended facilities and professionals to the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC), the Kenya Medical Practitioners and Dentists Council (KMPDC), and the Clinical Officers Council (COC) for further criminal and disciplinary investigations.