The board and chief executive of the National Hospital Insurance Fund (NHIF) are locked in a bitter battle over lucrative secondary school health insurance, the implementation of which is controversial.
Chief Executive Lewis Nguyai and CEO Peter Kamunyo have fallen out over the cancellation of contracts for about 17 healthcare providers under the program, correspondence exchanged between them shows.
Between February and March 2022, the NHIF audited contracted healthcare providers, such as Dr. Kamunyo says in Business Daily documents that found irregularities related to the Comprehensive Secondary School Students Medical Scheme, known as EduAfya.
dr Kamunyo (left) says he has terminated the vendors’ contracts based on the investigation reports, a decision the board has challenged on the grounds that it is outside its powers.
“In light of this, the NHIF has deferred offering you the healthcare provider contract for the 2022-2024 contract cycle based on the investigation reports,” he said in the letters dated August 30, 2022.
Sources familiar with the matter say Mr Nguyai told Dr. Kamunyo, meanwhile, has been instructed to restart the facilities on the grounds that the CEO unilaterally terminated them without following due process.
The affected health facilities wrote a letter of protest to Mr Nguyai, arguing that the NHIF CEO failed to provide them with details of the alleged irregularities.
Under the NHIF Act, cancellation of healthcare provider contracts is reserved for the board of directors.
The law requires that the board of directors informs the service provider in writing of the intended withdrawal and justifies the decision, to which the institution concerned is to reply in writing within seven days.
The board is then required to publish the names of the healthcare provider whose contract has been terminated in the Kenya Gazette and in at least three national circulation newspapers.
Mr Nguyai reportedly said the NHIF CEO did not follow procedures. dr Kamunyo had not responded to our inquiries at the time of going to press. The EduAfya program controls billions of shillings as the government pays Sh1,350 in bonuses for every public school student.
The system was unveiled during the second term of former President Uhuru Kenyatta and was part of the Jubilee Administration’s Big Four agenda to offer universal health insurance (UHC).
To implement the program, the Department of Education has mandated the NHIF to provide learners with health insurance for the duration of their studies to reduce the burden of health care on parents and guardians.
Under the plan, the Government will pay a premium of Sh1,350, deducted from the learner’s per capita fee, to allow them access to outpatient, dental, inpatient, optical, emergency, road rescue and overseas treatment.
The money is part of the 64.4 billion shillings earmarked for free secondary education for the year ending June 2023.
Health insurance is for all public secondary school students who are on the National Education Management Information System (NEMIS) database and registered with the NHIF.
Disagreements between NHIF management and the board could affect the implementation of UHC, as some 660 hospitals have threatened to shut down outpatient services in protest at capitation rates and delays in signing contracts.
The bodies under faith-based organizations and the Rural Private Hospitals Association (RUPHA) say NHIF branches are asking for invoices stating Sh1,000 instead of the agreed Sh1,400 per beneficiary per year.
Similar clashes were seen at the NHIF in 2012 when then-Chairman Richard Muga suspended Board Chairman Richard Kerich and five other officials.
Part of the problem at the time was allegations that NHIF’s top executives paid for a private company to run clinics that the insurer had not seen or inspected.
Then Prime Minister Raila Odinga later suspended the entire board – overturning a decision by Medical Services Minister Anyang Nyong’o – to pave the way for a forensic examination.