Health Cabinet Secretary Aden Duale has revealed that fraudulent hospital claims under the Social Health Authority (SHA) system led to the loss of Sh11 billion, with AI technology uncovering manipulated medical records and inflated billing.
Speaking at the 2026 Legislative Retreat for National Assembly members in Nakuru on Wednesday, Duale said many hospitals submitted claims for medical situations that could not occur, including cases where private facilities reported every delivery as a C-section, well above the World Health Organization’s recommended range.
“The era of manual claims allowed theft to thrive. That is why the Sh11 billion lost between October, when SHA was launched, and April, when I took over, was rejected. Facilities were stealing because they were used to stealing from NHIF,” he said.
Audits showed that some hospitals reported impossible numbers. In one case in Tharaka Nithi, a private hospital claimed all 500 deliveries were C-sections, a scenario automatically rejected by the SHA system.
“There are facilities in our country reporting 100 per cent of mothers who came to deliver have gone through C-section. In Tharaka Nithi, one private hospital claimed all 500 mothers delivered via C-section. If that happens, it’s against the law,” Duale said.
He explained that many facilities also submitted claim forms incorrectly, often filled by a single person rather than the required combination of patient, doctor, and hospital administrator.
“Many facilities submit claim forms filled by one person, one handwriting, one pen. That is a rejection. Maternity claims without birth notifications are also rejected, and surgical claims without theatre notes are invalid. Even at primary health care facilities, we found patients visiting up to 10 times a day,” he said.
Duale highlighted an extreme case in Kwale County where one individual had 381 dependents, now under investigation by the Directorate of Criminal Investigations (DCI).
He also stressed the role of SHA’s AI fraud detection system, which flags facilities claiming procedures they cannot perform. A level-three facility falsely claiming to perform C-sections without a theatre led to 22 doctors and 36 clinical officers being barred from SHA portals for participating in fraudulent activities.
“The system tracks every shilling from contribution to expenditure. If you steal from the sick, the system catches you, and the government will prosecute you,” Duale said.
The CS reported that 10,277 government, faith-based, and private facilities are now digitally connected, supported by 30,087 devices nationwide.
“That is why under SHA, there’s no card; you use your thumb. The digital system ensures even the most remote dispensary can transact data in real time,” he said.
He noted that over 29 million Kenyans are registered under SHA, with Sh93.4 billion disbursed so far. Regarding ongoing investigations, 1,188 case files were submitted to the DCI in October. Of these, 24 facilities had confirmed fraud, 61 are under investigation, and 105 facilities with previously closed cases still hold SHA contracts.
Some of these cases are now in court, including those involving senior SHA staff, while more than 18 doctors and 22 clinicians have been barred from using SHA to treat patients.
Duale also highlighted broader reforms, including the Green Label Service Charter, expansion of primary healthcare, modernisation of county hospitals through Sh6.18 billion under the National Equipment Support Project, and initiatives focused on maternal and newborn care through the Every Woman, Every Newborn Everywhere program.
He added that the Kenya National Public Health Institute is expanding laboratory networks and Emergency Operations Centres to strengthen global health security.
He stressed hospitals must only claim for services actually provided and emphasised SHA’s commitment to working with health facilities, professional bodies, and county governments to maintain continuous care.
“I want Kenya to lead in healthcare, where ministers and ordinary citizens can be treated in the same facilities. The digital system, AI monitoring, and legislative reforms are key to protecting patients, public funds, and health services,” he said.
