KNH’s billions to insurer, Linda Mama

By , August 14, 2024

Kenyatta National Hospital, Kenya’s biggest referral health facility, is literally in the intensive care unit after losing billions of shillings through inflated costs and badly managed Linda Mama and the National Health Insurance Fund (NHIF) programmes.
That is according to the Auditor General’s report for the financial year ending June 30, 2023.

In one instance, KNH lost Sh379.1 million after NHIF failed to fully reimburse the hospital for costs incurred by patients.
The loss, the report says, arose when costs incurred were much higher than the rebate reimbursed based on existing medical service contracts between KNH and NHIF.

In spite of this, KNH administrators still continued engaging NHIF and the Ministry of Health on loss-making contracts from 2016 to 2022, as evidenced in correspondence between the two entities.

Although a renegotiated contract that started on July 1, 2022 has since enhanced the number of claimable services, annual losses were still significant, the report says.

“In the circumstances, the hospital has continued to bear the high cost leading to losses if the reimbursable amounts are not reviewed,” the report warns.

On the Linda Mama programme, KNH lost a whopping Sh190.1 million.

The government, the Auditor General says, reimburses KNH a paltry Sh17,500 per delivery despite receiving complicated maternal referrals for specialised care that include renal dialysis, critical care services and neonatal care whose medical costs could be way above Sh100,000, resulting in losses.

Enhanced package

Starting in July 2017, the package was enhanced to allow the hospital to claim a normal rebate rate of Sh4,000 per day on top of the Sh17,500 if delivery complications arose.

Even then, this was not sufficient to cover losses.

Says the report: “In the circumstances, the hospital has continued to bear the high cost of free maternity programmes which has negatively impacted on the overall performance.”

It also raises concerns that KNH spent Sh23.7 billion against a budget of Sh21.1 billion, resulting in an unapproved over-expenditure of Sh2.6 billion in the year under review.

The hospital also inflated the cost of setting up the still incomplete Paediatrics Emergency and Burns Management Centre by a whopping Sh633 million.

Auditors also reported that although 678 patients owe KNH Sh75.6 million, there were no records showing such data as inpatient, invoice folio numbers and guarantors.

“In the circumstances, the accuracy and recoverability of secured individual debtors of Sh74,556,613 could not be confirmed,” the report says.

On rental income, the report raises concerns that KNH had failed to collect Sh11.5 million for over 360 days.’

Although most of the occupants of KNH houses are public servants, the report says, it was not clear why the hospital had not initiated rent recovery through a checkoff system as required by its Housing Management Policy.

Another 16 debtors had a balance of Sh 21.1 million, accounting for 58 percent of total rent receivables.

Says the report: “In the circumstances, the recoverability of uncollected rental income of Sh36,371,000 could not be confirmed.”
The report also raises concerns that the rents charged on KNH’s 968 staff houses had not been reviewed since 2001 to align them to market rates.

If market rates were charged, the report says, KNH would collect an estimated annual rent of Sh318 million, compared with Sh57.2 million that it now receives, resulting in a revenue loss of Sh260.9 million.

The report comes as the hospital’s CEO Evanson Kamuri is being investigated for corruption.

In May, the High Court froze Sh48.5 million and put a caveat on six parcels of land belonging to Kamuri for six months pending investigations into allegations of graft by the Ethics and Anti-Corruption Commission (EACC).

Justice Esther Maina allowed the EACC’s request to freeze the Kamuri millions held in seven accounts at HFC Bank, National Bank, and Standard Chartered Bank as it probed allegations of corruption and economic crimes involving Sh634,465,000.
Three accounts held at HFC Bank had a total Sh41 million.’

One account had Sh10.5 million, the second Sh18 million and the third Sh12.5 million.
His two accounts at National Bank had Sh1.2 million and 1.9 million, while one at Standard Chartered had Sh4 million.

Author Profile

Related article

Attempted suicide no longer a crime in Kenya, High Court judge rules

Read more

NSL resumes as race for promotion heats up

Read more

‘Sin tax’ on digital ads sparks concerns

Read more