A staggering Sh10.6 billion in fraudulent and non-compliant medical claims have been rejected by the new Social Health Authority (SHA), Defence Cabinet Secretary Aden Duale announced. Speaking to the Senate on Wednesday, October 29, 2025, Duale revealed that a digital audit system implemented under the new SHA framework successfully identified and blocked the suspicious billings from various health facilities. This intervention, he stated, has saved taxpayers from potentially huge losses and underscores the government's intensified crackdown on healthcare fraud that plagued the defunct National Health Insurance Fund (NHIF).

The preliminary findings of the ongoing forensic validation expose a significant financial risk, with irregular payments estimated to be in the hundreds of millions of shillings, Duale told senators. "A final verified figure will be communicated once the joint audit and reconciliation process is concluded," he stated on Wednesday. The crackdown has already resulted in the closure of 728 non-compliant facilities and the downgrading of 301 others. Additionally, dozens of hospitals have been suspended, with more facing de-gazettement pending the outcomes of forensic audits.

Advanced Tech Seals Loopholes

The successful detection of the fraudulent claims has been credited to the robust digital architecture of the new SHA system, which was rolled out in October 2024 under the TaifaCare program. According to CS Duale, the system employs next-generation Artificial Intelligence and machine learning tools to detect anomalies in real-time. "This ongoing forensic validation is proof of the effectiveness of SHA's new digital system in uncovering and preventing fraud," Duale remarked. The system is designed to flag irregularities such as upcoding (billing for more expensive services than provided), phantom billing (charging for non-existent patients), falsification of medical records, and illegally converting outpatient visits into inpatient claims.

To further tighten controls, each claim is now linked to biometrically verified beneficiaries, ensuring that reimbursements are only made for legitimate patients and accredited providers. The Ministry of Health is collaborating with the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC), and the Office of the Auditor General to prosecute culpable individuals and recover lost funds. Duale issued a stern warning, stating that individuals implicated in the scam will soon be taken to court.

Transition from NHIF to SHA

The Social Health Authority is the successor to the NHIF, established under the Social Health Insurance Act of 2023 to manage the country's new universal health coverage scheme. The transition has, however, faced challenges, including confusion among patients and providers, and significant outstanding debts owed to hospitals by the former NHIF. The government has committed to settling the verified legacy debts to ensure a smooth transition and maintain the trust of healthcare providers.

In his address to the Senate, CS Duale also defended the decision to move the 'Linda Mama' free maternal care program under the SHA umbrella, now known as 'Linda Jamii'. He explained the move was necessary to address financial and operational challenges, expanding the program from a narrow maternal focus to a comprehensive household coverage model. Under the new system, over 22,000 teenage mothers have already accessed maternal services free of charge.

Broader Implications for Kenyan Healthcare

The revelation of the attempted large-scale fraud highlights the systemic challenges facing Kenya's healthcare sector. While the new digital system is proving effective, the sheer volume of fraudulent claims indicates deep-rooted corruption that the government must continue to confront. The success of the SHA and the goal of achieving universal health coverage hinge on ensuring transparency, accountability, and the prudent use of public funds. The Ministry of Health has handed over more than 1,188 fraud-related files to the DCI for investigation, signaling a zero-tolerance approach to corruption within the new health scheme. As investigations continue, the government has assured the public that it will not rest until every Kenyan has access to quality and affordable healthcare, free from the burden of fraud.