CS Duale Reveals Gaps Leading to the Missing Ksh11 Billion SHA Funds
Health Cabinet Secretary Aden Duale has revealed that more than Ksh11 billion in Social Health Authority (SHA) funds remains unaccounted for after widespread fraud by health facilities was detected through a newly deployed artificial intelligence system.
Appearing before a parliamentary committee on Tuesday, January 28, Duale said the missing funds represent rejected claims flagged within just six months of SHA’s rollout, following the exposure of systematic manipulation of medical records and exaggerated billing by both private and public hospitals.
According to the CS, the AI-driven fraud detection engine uncovered patterns similar to those that plagued the now-defunct National Hospital Insurance Fund (NHIF), with some facilities resuming fraudulent practices shortly after the transition to SHA.
“What we are seeing is organised theft. Facilities that defrauded NHIF are attempting the same under SHA, but this time the system is smarter,” Duale told lawmakers.
One of the most striking revelations involved maternity claims. Duale said the system flagged hospitals reporting medically impossible statistics, including facilities claiming that all deliveries were conducted through caesarean sections—far above the World Health Organization’s recommended rate of 10 to 15 per cent.
“There are facilities in our country that have reported 100 per cent of the mothers who came to deliver underwent caesarean sections,” Duale said.
In one case from Tharaka Nithi County, the CS disclosed that a private hospital claimed all 500 women who delivered at the facility had C-section births, triggering automatic rejection of the claims.
The committee also heard that claim forms in several facilities were filled out by single individuals using one pen and identical handwriting, instead of the required multiple signatures from patients, doctors, and administrators.
“Where we find that claim forms are filled by one person, one handwriting, one pen, that is an automatic rejection,” Duale explained.
Auditor General Nancy Gathungu’s report added another layer of concern, indicating that a private consortium—allegedly linked to an Indian firm—controls the SHA system. The consortium is projected to earn about Ksh11 billion annually from contributions and claims, despite the government not fully owning the Ksh104 billion system.
The audit further found cases where healthcare workers allegedly registered themselves as fake patients to generate fraudulent claims, while some hospitals reported periods where only caesarean births occurred with no natural deliveries recorded.
The AI system also uncovered so-called “ghost patients,” including cases where individuals were recorded visiting primary healthcare facilities up to ten times a day to inflate capitation payments. In Kwale County, one patient reportedly registered 381 dependent children under a single SHA account. The matter has since been referred to the Directorate of Criminal Investigations (DCI).
Duale noted that the system’s real-time monitoring has also detected exaggerated treatment claims, including patients allegedly undergoing 10 dialysis sessions when only two are medically permissible and fully covered.
Despite the challenges, the Ministry of Health maintains that SHA has already paid more than Ksh11.4 billion to hospitals since its launch. However, private facilities under the Rural and Urban Private Hospitals Association (RUPHA) claim they are owed up to Ksh76 billion.
“The system is not the problem. The problem is those who want to steal public money,” Duale said, adding that prosecutions will follow once investigations are concluded.
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CS Duale Reveals Gaps Leading to the Missing Ksh11 Billion SHA Funds
