Hospitals contracted to treat policyholders under the multibillion-shilling government-financed medical insurance program for teachers, police, and prison officers have threatened to cut off services due to more than Sh5 billion in unpaid capitation claims, forcing policyholders to pay out of pocket for their medical bills.
Despite disbursement of Sh17.6 billion to the Teachers Service Commission (TSC) for public school teachers’ health insurance and Sh13.6 billion to the National Police Service Commission (NPSC) for police and prison officers’ coverage, this remains the case in the current fiscal year.
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Hospitals are furious because Medical Administrators Kenya Limited (MAKL) has slowed down the processing of capitation claim payments, and the latest findings come as a result of investigations by the Senate and the National Assembly into the problem.
Senator Raphael Chimera, who was nominated for the position, wants the Senate Health Committee to summon Minet Kenya, a group of insurance companies headed by CIC General Insurance Limited and MAKL, over the issue of medical claims that have been delayed for teachers, police, and prison officers.
In addition to casting doubt on the constitutionality of Kenya’s capitation system, Senator Chimera said that the committee might feel forced to ask Auditor-General Nancy Gathungu to conduct a forensic audit of the management of the education, security, and penal systems.
A number of medical centers have sent letters to MAKL requesting payment for services rendered, including Nairobi West Hospital, which is due Sh576.79 million in unpaid medical claims.
This indeed a major blow to the affected parties like teachers and the police officers together with the prison officers as they will be required to cater for their medical bills if the unpaid bills will not be settled.
The aforementioned sums will keep adding up as long as the healthcare provider keeps treating your members. As a result, the Sh200 million credit limit has been surpassed by the company.
The Inspector General of Police Service and the Commissioner-General of the Kenya Prisons Service (KPS) were both copied on the letter dated November 14, 2023.
“Please be informed that the hospital’s operations have been impacted due to your failure to fulfill your contractual obligations on payment. This includes not only not being able to pay our doctors, service providers, and suppliers, but it has also had a negative effect on our procurement of medicine and other consumables,” the letter adds.
The policyholders will be devastated by the hospital’s decision to withhold medical treatment until the money is paid, which is in keeping with its contractual responsibility with MAKL.
The letter further states that the medical care provider is required to notify patients in writing seven days prior to any service interruption.
The CEO of CIC General Insurance Limited was contacted by Ms. Rosemary Kuraru, who was acting on behalf of Inspector-General of Police Japheth Koome, regarding the outstanding claims from the Nairobi West Hospital on November 21, 2023.
There have been many complaints about the teachers’ medical service scheme’s substandard services during its nine years of operation. The National Assembly and the Senate are worried about MAKL since it is a private corporation and the insurance mechanism that TSC is using to get insurance is a mask.
While a group of insurance companies headed by CIC General Insurance Limited is responsible for police insurance, Minet Kenya is in charge of TSC’s plan tendering.
As a capitation administrator, the two insurance firms then hired MAKL, which adds up to 7% to the tender price in administration fees.
The procuring entities, TSC and NPSC, pay the premiums directly to Minet Kenya and CIC General Insurance Limited, per the government’s instructions.
In order to implement the capitation program, insurance companies send their money to MAKL, which in turn recruits doctors and hospitals to form a network that provides care for the scheme.
In order to maximize profits, MAKL—which controls all admission rights—negotiates with hospitals to deliver the services, typically at extremely cheap capitation fees for patients. This is when the insured under the schemes begin to suffer.
Even though MAKL’s capitation fees are low, the hospitals still need to earn a profit.
Finally, MAKL-affiliated hospitals maximize revenues by leaving patients with little choice but to pay out of pocket for treatment at competing facilities or by flat-out refusing to provide any treatments at all.
A recent report informed the National Assembly’s Education Committee that urgently needed surgical procedures can take days “until one gives up for out-of-pocket financing elsewhere or dies while still waiting to be treated.”
In order for a hospital to earn more money from capitation fees under MAKL, it needs to treat fewer patients.
The Senate is determined to find out what happened, therefore it has summoned various entities, including TSC, NPSC, and the Insurance Regulatory Authority (IRA), to explain what MAKL doing to fix the claims processing delays.
