NAIROBI, Kenya — The Social Health Authority (SHA) lost Sh11 billion to fraud in just six months after its launch, with private hospitals emerging as the biggest culprits, according to a Ministry of Health audit.
Health Cabinet Secretary Aden Duale said the theft occurred between October 2024 and April 2025, a period he described as the peak of systemic abuse within Kenya’s flagship universal health coverage scheme.
“This is when the real theft took place,” Duale said in an interview with the Daily Nation on Monday.
“We will recover this money from reimbursements. The biggest fraud is in private facilities, though not all are culpable. It also extends to referral hospitals. Faith-based facilities have the lowest rejection rates.”
Duale said fraud largely involved manipulation of claims submitted to SHA, including deliberate inflation of treatment costs and billing for services never rendered.
“Much of the fraud identified involves converting outpatient services into inpatient claims,” he said. “Patients would visit a hospital and be admitted even when their condition did not warrant it, allowing facilities to claim higher reimbursements.”
The audit also revealed cases where hospitals billed SHA for expensive procedures while providing cheaper alternatives, or logged claims for treatments that never took place.
In some facilities, healthcare workers registered themselves as patients and submitted false claims. “We have since closed those hospitals,” Duale said.
Maternity services were another major red flag. The CS said some hospitals reported that all deliveries were conducted via caesarean section, figures he described as medically implausible and inconsistent with World Health Organisation standards.
“That is outright fraud, and SHA will not pay,” he said, adding that such cases are now being handled by regulators and investigators.
Surgical claims also came under scrutiny. According to Duale, missing theatre notes and incomplete documentation made it impossible to verify whether procedures were performed or whether the amounts claimed matched the services delivered.
Hospital owners had previously complained that SHA’s rejection rates were highest for surgical procedures. Duale dismissed the criticism, insisting the rejections were evidence of tighter controls.
“Let me tell Kenyans: a lot of fraud took place between October and June. The situation is now stabilising. Daily claims and revenue are balanced, and digital safeguards are in place,” he said.
The CS said hospitals with smaller liabilities have signed consent agreements with SHA and begun negotiating repayment mechanisms.
“Some facilities have disclosed the amounts taken and are ready to pay back. What we want is the money. We will not spare anyone involved in fraud,” he said.
Last year, Duale forwarded 118 investigation files to the Directorate of Criminal Investigations. Investigations into 24 facilities have been completed, while another 15 files were sent to the Director of Public Prosecutions last week.
He categorised the cases into three groups: 24 facilities with confirmed fraud, 61 under active investigation, and 105 facilities whose cases had previously been closed by the Kenya Medical Practitioners and Dentists Council but still hold SHA contracts.
“Some cases are already in court, including those involving senior SHA staff,” Duale said. “More than 18 doctors and 22 clinicians have been denied access to the SHA portal. They will no longer treat patients under SHA.”
Despite the losses, Duale said the government remains the primary financier of healthcare in Kenya. In the past 14 months, the State has paid Sh75 billion to the Social Health Insurance Fund, Sh4 billion to the Public Officers Medical Scheme, and Sh1 billion to the Emergency, Chronic and Critical Fund.
“No hospital can run without SHA,” he said. “All we want is for facilities to give Kenyans the services they have paid for.”
According to the Director of Public Prosecutions, Renson Ingonga, 10 suspects — including four directors of private hospitals — have already been approved for prosecution over SHA fraud, with charges ranging from conspiracy to commit a felony to money laundering and economic crimes.
Story credits/Daily Nation dated Wednesday, January 28, 2026.
