Health Cabinet Secretary Aden Duale has uncovered four common schemes used by hospitals to defraud the Social Health Authority of billions of shillings.

In a statement on Monday, August 25, 2025, Duale revealed that among the crafty ways healthcare providers had devised to defraud the Social Health Authority were:

Upcoding

Upcoding fraud is a deceptive and illegal medical billing practice where a healthcare provider intentionally submits codes for more severe or expensive diagnoses and procedures than what was actually performed or documented.

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

Falsification of Records

This is the intentional submission of altered or false medical documentation to get higher reimbursement from medical insurance. 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

In this type of health insurance fraud, healthcare providers illegally bill for inpatient admissions for what were simple outpatient visits.

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

Phantom Billing

Phantom billing is a form of healthcare fraud where a provider bills insurance companies or a government program for services, procedures, or medical equipment that were never actually provided or performed.

Unlike upcoding, where a service was performed but billed at a higher level, phantom billing involves a complete fabrication. The provider invents a service out of thin air to generate a fraudulent claim.

Among the hospitals listed by Duale to have been implicated in the fraud were:

Nabuala Hospital, Bungoma: Falsified claims for multiple Caesarean sections on the same patient within days, and unsupported maternity claims.

Kotiende Medical Centre, Homa Bay: Fabricated clinical documents with a single person signing off for both day and night shifts over consecutive days, which is humanly impossible.

Vebeneza Medical Centre, Nairobi: Converted outpatient visits into inpatient claims and frequent, suspicious admissions of their own employees.

Jambo Jipya Hospital, Mtwapa: Submitted fraudulent claims for a Caesarean section when the patient had a normal delivery.