A whistleblower has exposed a Ksh21 billion scandal at the National Hospital Insurance Fund (NHIF), which resulted in deaths and a lack of medical services for contributors.
Benard Muchere, a fraud risk management consultant, told the Public Petitions Committee, senior government officials were behind the fraudulent scheme.
Further, he revealed that during the 2021-2022 financial year, NHIF lost the funds through fictitious claims.
“We are talking about Ksh15 billion which the hospitals had not reported, and we have heard that it is not possible for NHIF to have non reported claims because it is now real time,” he told the committee.
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Whistleblower Explains Consequences of NHIF Scam
Additionally, Muchere told the committee that the unbudgeted claims led to a crisis that made it impossible for NHIF to pay bills for contributors.
Consequently, most patients were denied treatment and in other cases leading to fatalities.
Moreover, he explained that EduAfya, a medical scheme that was set up for school going children, lost Ksh683.9 million from the falsified claims.
On the other hand, Linda Mama lost Ksh2.3 billion, the National Police service (NPS) and Kenya Police Service (KPS) lost Ksh4.1 billion.
Also, civil servants lost Ksh3 billion, Counties lost Ksh525.3 million and Retirees benefits scheme lost Ksh190.1 million.
Further, schemes for the vulnerable children and orphans lost Sh31.2 million, while ShSh6.5 million went missing from the fund for the elderly and the disabled.
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How the Government Officials Covered up the Fraud
At the same time, Muchere said that after conducting a fraud examination on NHIF financial statements, he learnt that during the preparation of financial statements for the 2021/22 financial year, the management fraudulently created IBNR claims accumulating to over Ksh21 billion.
IBNR stands for ‘Incurred But Not Reported’. It is a type of reserve account used in the insurance industry as the provision for claims and or events that have transpired but have not yet been reported to an insurance company.
He explained that the claims were created with the help of Kenbright Actuarial and Financial Services firm and were later backdated to the 2019/2020.
They were then charged to the NHIF members’ contributory schemes like the Health Insurance Subsidy Programs for Orphans and Vulnerable Children, and the Older Persons and Persons with Severe Disability.
“The chief executive officer and the chairperson of the board of management in their report consciously avoided mentioning and explaining the IBNR claims,
“This is a grave matter and as a committee we will make sure we summon all those mentioned. There is a need for them to shed light on what they know about the claims before us” he added.
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