Kenya’s health minister has pushed back against claims that billions of shillings were lost at the country’s new health insurance authority, saying the figures cited in a media report were misunderstood.

Aden Duale said the amounts flagged as suspicious payments at the Social Health Authority reflect standard accounting procedures and routine transfers during the transition from the now-defunct National Hospital Insurance Fund.

“To categorically set the record straight: no billions have been lost or misappropriated,” Mr Duale said in a statement responding to the report. “The figures being summed up represent standard accounting provisions and legally sound payments, not missing cash.”

Transfers during the NHIF transition

One issue raised in the report concerns what it described as an “irregular transfer” of Sh1.3 billion and an “untraced” Sh3.3 billion linked to the Social Health Insurance Fund.

Mr Duale said the claim was based on a misunderstanding of how the new system works.

The Social Health Authority, he explained, is legally mandated to administer the health insurance funds created under Kenya’s health reforms. Transfers between accounts during the shift from NHIF to the new structure were required by law.

“What actually occurred was the legally mandated transfer of assets and cash from the bank accounts of the defunct NHIF to the new SHA accounts,” he said. “Moving public funds between government accounts during an institutional transition is compliance, not a loss.”

The Sh26.8 billion reserve

Another figure cited in the report was Sh26.8 billion described as “unsupported claims”.

Mr Duale said the amount had not been paid out and does not represent missing money. Instead, he said it reflects an accounting reserve set aside to pay hospitals for treatment already provided but not yet fully billed.

The provision includes what insurers call “incurred but not reported” claims. Hospitals may submit final paperwork weeks or months after services are delivered.

“The Sh26.8 billion is simply the money SHA has responsibly set aside to pay hospitals for patients they treated but whose paperwork had not yet been submitted by the close of the audit period,” he said.

According to the minister, international insurance accounting standards require such provisions to be recognised in financial statements.

Payments tied to special medical schemes

The report also cited Sh7.3 billion allegedly paid for “unauthorised services”.

Mr Duale said those payments related to benefits under the Public Officers Medical Scheme Fund, which covers civil servants and teachers.

That scheme, he said, provides broader benefits than the standard package offered through the national insurance fund, including specialised procedures and emergency medical evacuation.

“These services were assessed using the wrong rulebook,” he said, noting that the scheme operates under separate regulations.

Claims involving hospitals

Another concern involved Sh1.56 billion said to have been paid to uncontracted health facilities.

Mr Duale said the payments occurred during the transition period in October 2024, when hospitals previously contracted under NHIF were allowed to continue treating patients while new digital agreements with the Social Health Authority were finalised.

“Flagging these facilities as ‘uncontracted’ ignores the reality that turning patients away would have been catastrophic,” he said.

He added that where genuine contracting issues were detected, the authority halted payments immediately. Those cases amounted to Sh92.4 million.

Calls for careful reporting

The minister also addressed claims of Sh2.4 million in alleged overpayments. He said the authority’s digital claims system automatically corrects clerical errors to match official government tariff rates for specific treatments.

Mr Duale urged caution when interpreting complex financial records linked to health insurance operations.

Kenya is in the middle of one of the largest changes to its healthcare financing system in decades, replacing the long-standing NHIF with new insurance funds managed by the Social Health Authority.

“Responsible reporting requires that financial and insurance processes are presented in their full context,” he said, warning that misinterpretation could cause unnecessary public concern.