Government to pay Sh5.3 billion NHIF arrears to hospitals

The Ministry of Health has bowed to pressure from hospitals and promised to clear outstanding arrears running into billions of shillings.

The ministry has written to the National Treasury to secure Sh5.4 billion in the Supplementary Budget to settle pending National Health Insurance Fund (NHIF) debts below Sh10 million, in line with a Presidential directive.

The money will be paid to public, private, and faith-based hospitals.

The announcement was made on Thursday during a consultative meeting between the ministry, private healthcare providers, the Social Health Authority (SHA), the Digital Health Agency (DHA), and regulators to review the rollout of Taifa Care.

At least 176 private hospitals from Nairobi, Kiambu, Kajiado, Machakos, Embu, Nyeri, and Kirinyaga were represented at the forum.

In a statement by Health Cabinet Secretary (CS) Aden Duale, the ministry recognised the crucial role of private healthcare providers in complementing government efforts and reaffirmed its commitment to collaborative engagement, open dialogue, and transparency in the delivery of Universal Health Coverage (UHC).

“I have written to the National Treasury to secure Sh5.4 billion in the Supplementary Budget to settle legacy NHIF debts below Sh10 million, in line with the Presidential Directive,” Duale stated.

Hospitals are owed a total of Sh76 billion, including Sh33 billion in defunct NHIF claims and Sh43 billion in unpaid SHA claims.

Ironically, in a quick turn of events, the ministry that had been adamant in response to cries from Kenyans unable to receive care admitted that the unpaid claims continue to constrain service delivery across the country.

Facilities most affected, according to the ministry, are those offering primary and secondary levels of care.

“These arrears continue to constrain service delivery... Timely clearance of these obligations will restore confidence among service providers, sustain essential health services, and reinforce the government’s commitment to achieving Universal Health Coverage (UHC),” reads the ministry’s letter written to Treasury CS John Mbadi.

Further, in the letter dated September 29, 2025, the ministry shared with Mbadi a list of facilities highly affected, for immediate consideration.

Duale noted that the ministry has compiled a schedule of healthcare facilities across the country with outstanding debts below the Sh10 million threshold.

“The cumulative debt amounts to Sh5.3 billion and has been disaggregated by county, ownership (public, faith-based and private), and the specific amounts owed,” added the letter.

Hospitals including public, private, and faith-based institutions had reported paralysis of services because of financial struggle.

Investigations by The Standard revealed some were not able to clear bills, purchase basic commodities like drugs, or pay staff and suppliers, with some closing shop.

Currently, patients seeking services in private and faith-based hospitals are forced to pay out of pocket, as SHA services were withdrawn.

Rural and Urban Private Hospitals Association of Kenya (RUPHA) had directed its members to suspend SHA services due to unpaid claims.

On Thursday, RUPHA took cognisance of the request made to clear the Sh5.3 billion SHA liabilities inherited from NHIF.

“We cautiously welcome this development as a step in the right direction towards the partial settlement of the historical liabilities of the SHA,” noted RUPHA in a statement.

Additionally, RUPHA applauded the ministry for acknowledging that unpaid medical claims have constrained the provision of healthcare services in Kenya and are a threat to the national dream of Universal Healthcare.

“We urge CS John Mbadi to act expeditiously on your request, as it is in line with the National Treasury's internal policy on retiring pending bills whose value is below Sh10 million,” added the statement.

On claims that President William Ruto instructed to be verified, RUPHA did not object, but asked for the process to begin immediately.

“Hospitals request that you move with characteristic speed to establish a team and initiate the verification mechanism in line with the guidance provided to you via the High Court in Gikenyi B & 3 others v Committee & 23 others (Petition E011 of 2025) [2025] KEHC 5823 (KLR) (12 May 2025) (Ruling),” said the association.

In the letter to Mbadi, Duale noted that all claims shall undergo a rigorous verification and adjudication process prior to payment.

Earlier this week, the ministry also held a similar engagement with faith-based organisations, including the Christian Health Association of Kenya, Mission for Essential Drugs, and the Kenya Conference of Catholic Bishops.

“I reaffirm that private healthcare providers and faith-based organisations are central partners in the County-to-County rollout of Taifa Care, underscoring the government’s commitment to ensuring every Kenyan has access to quality, affordable, and sustainable healthcare,” emphasised Duale.

The Ministry and the consortium of private healthcare facilities further acknowledged progress made and pledged continued partnership to resolve outstanding challenges for the benefit of all Kenyans.

They agreed to appoint dedicated SHA relationship managers to support private healthcare providers and to establish a Joint Taifa Care one-stop shop, a dedicated desk bringing together the Digital Health Authority (DHA), SHA, and Kenya Medical Practitioners and Dentists Council (KMPDC) at SHA Headquarters and Huduma Centres to holistically address all provider-related issues.

Providers have in the past complained of delayed pre-authorisation of patients and delayed claims approval.

Duale also promised to intensify the fight against fraud in the new health scheme through a joint multidisciplinary team.

Last month, the ministry flagged Sh10.6 billion in fraudulent claims, and currently at least 31 hospitals are being investigated by the Directorate of Criminal Investigations (DCI).

SHA is reported to have processed payments to healthcare facilities using information entered and uploaded in the system, disbursing approximately Sh691,393,530 to the suspected facilities, an amount believed to have been fraudulently obtained.

“Deployment of advanced technology, including Artificial Intelligence engines, to detect fraud patterns.

New system enhancements will go live this week to strengthen fraud prevention,” said the CS in a media statement.

Whereas the majority of hospitals face shortages of drugs despite individuals paying SHA annual premiums, the ministry promised alignment with the Pharmacy and Poisons Board (PPB), noting that SHA will reimburse only for drugs prescribed and dispensed strictly within the PPB drug catalogue.

“...guarantee of PPB-approved medicines for members, enforcing prescription and dispensing rules within the system to ensure every SHA member receives only PPB-approved drugs at the facility,” noted Duale.

Further, Duale noted the need for regular, real-time communication on any policy amendments, and the use of provider platforms to sensitise members on SHA benefits and promote registration.

The majority of Kenyans have been reluctant to remit premiums to the scheme, despite the government’s continued efforts to drum up support for registration.