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DCI To Question NHIF CEO Kamunyo Over Sh200M Missing Funds

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Embattled National Hospital Insurance Fund (NHIF) Chief Executive Officer (CEO) Peter Kamunyo could be cited for lying under oath over unexplained excess spending amounting Sh200million on the National Police Service comprehensive medical cover.

It has now been established that Kamunyo and other senior managers will be questioned by sleuths from the Directorate of Criminal Investigations (DCI) over possible embezzlement of public coffers through irregular claims.

Despite saying they had unanimously settled with the user department, the Ministry of Interior and Coordination of National Government, Interior Principal Secretary discounted the claims as untrue and misleading.

“It is not the business of the NHIF CEO to decide unilaterally how to spend the excess of loss cover.”Kibicho told the committee.

Instead, while appearing before the Opiyo Wadayi led Public Accounts Committee (PAC), Kibicho said they resorted to withholding subscriptions after their numerous letters to NHIF went unanswered.

“In the meantime, we have in total withheld Sh400 million out of the amounts due to them for 2020-21 and 2021-22 financial years,” Kibicho said.

Auditor General Nancy Gathungu in her 2019/20 audit report said there was no evidence of any employee exceeding the limit, hence, the money should have been refunded

The deal was that the employer was to authorise any spending of the extra amount before it is used.

Although the amount was refundable at the end of the contract period, Gathungu, in the audit report before the PAC, noted that it was yet to be refunded.

For the two years of the contract, NHIF did not refund the extra amount claiming it was used by police officers who exceeded their limits raising the questionable excess spending from the initial Sh200million to the current Sh400million.

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The period in question is the financial year 2018/19.

The deal was that the employer was to authorise any spending of the extra amount before it is used.

Under the cover, NPS procured a comprehensive medical cover for a period of two years commencing October 1, 2017 to September 30, 2019.

The tender was awarded to NHIF at a contract sum of Sh4.7 billion inclusive of Sh200 million for excess loss cover to cushion members who might exhaust their limits.

On June 30, 2021, the contract was awarded to NHIF at Sh3.29 billion.

According to Kibicho, they had not made any authorisation even as NHIF claimed the monies were used to cover those who had depleted their normal cover.

In September this year, Kamunyo said NHIF loses Sh10 billion every year through fraudulent claims through impersonation and fictitious claims by public and private hospitals thus denying millions of deserving Kenyans quality health care.

He noted that out of the Sh61 billion collected from formal, informal sector and sponsored members in the last financial year more than 91 per cent was paid out to claims from the hospitals across the country amounting to Sh54 billion.

The national insurer has 7,666 healthcare providers empaneled by NHIF including 5,833 government facilities which make 75 per cent of the providers, 1,619 private hospitals representing 21 per cent healthcare providers, and 314 faith-based facilities (four per cent).

NHIF operates 156 service points across the country comprising of 70 branch offices, 33 satellite offices and service desks and counters in all 53 Huduma Centres.

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Currently, NHIF covers more than 23 million Kenyans, with 10.1 million being principal contributors and the rest are dependents including spouses and children.

Previously, NHIF was not allowed to engage in the provision of commercial insurance services to public entities and private companies as provided for under section 19 of the Insurance Act.

However, through a Gazette notice of April 17, 2020, Treasury Cabinet Secretary Ukur Yattani exempted NHIF from the provisions of the law, effectively allowing the public insurer to engage in the insurance business.

Section 19 of the Insurance Act provides that any insurance provider operating in the country must be registered with the Insurance Regulatory Authority (IRA), the industry regulator. NHIF is not a member of the IRA.

In 2012, the government-mandated NHIF to provide medical cover to civil servants and members of the disciplined services – the police and prison officers.

The government cited the high cost of private insurance and lack of structures to provide a medical cover of such a magnitude.


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