RUPHA to suspend services over NHIF arrears and SHA systematic failures

KENYA—The Rural & Urban Private Hospitals Association of Kenya (RUPHA) has announced that it will suspend services under the Social Health Authority (SHA) insurance scheme starting Monday, 24 February 2025.

This significant decision comes in response to escalating financial pressures due to unpaid arrears and an ineffective outpatient reimbursement model that jeopardizes the survival of these hospitals.

RUPHA, which represents hundreds of private and faith-based healthcare facilities, made this decision after months of unproductive negotiations with government officials and a series of unfulfilled promises that have left hospitals struggling with debts and delayed payments.

A major concern for the association is the unresolved issue of historical arrears, with unpaid National Hospital Insurance Fund (NHIF) claims currently exceeding Kshs 30 billion(US$231.83 Million).

Hospitals across all ownership models—public, private, and faith-based—have been dealing with outstanding debts dating back to 2017, severely undermining their operational capacity.

Dr. Brian Lishenga, Chairman of RUPHA, expressed hospitals’ financial difficulties, stating, “We have had to let go of doctors, nurses, and support staff because we simply cannot afford to pay salaries.”

In addition to significant job losses, hospitals are also defaulting on bank loans and overdrafts taken out to cover expenses while waiting for payments.

 Pharmaceutical suppliers have begun to blacklist institutions unable to settle their accounts, leading to critical shortages of essential medications.

Specialist doctors have also been impacted, with many consultants reporting several-year-long delays in payments.

Moreover, hospitals are being required to declare these unpaid NHIF claims as income for tax purposes, resulting in unexpected tax liabilities and penalties.

 This has forced many hospitals into costly arbitration with the Kenya Revenue Authority (KRA), compounding their financial difficulties.

The 7th SHA Transition Status Report (February 2025) highlights systemic failures within the SHA system.

According to the report, nearly 89% of hospitals have found the SHA claims portal to be non-functional, leading to extensive delays in processing reimbursements.

Additionally, 54% of hospitals have not received any payments since December 2024, and those that did noted a concerning lack of transparency.

 Furthermore, 83% of hospitals reported significant challenges in verifying patient eligibility due to system glitches, which have resulted in critical delays in patient care.

Criticism has also been directed towards the new outpatient reimbursement model, which suggests a monthly payment of less than Kshs 75 (US$0.58) per patient.

Critics argue that this model is financially unfeasible, placing hospitals in a position where they cannot meet basic operational costs such as paying staff, procuring essential medications, or maintaining critical equipment, ultimately jeopardizing patient care.

In a further escalation, RUPHA members will also cease providing care under the Medical Administrator Kenya Limited (MAKL) scheme, which covers police officers and teachers.

RUPHA claims that MAKL has not remitted payments for over 11 months and has enforced arbitrary discounts that favor its own clinics in a non-competitive manner.

Dr. Lishenga has called on the government to settle the Kshs 30 billion (US$231.83 Million) debt, fix the SHA payment model to reflect actual costs, and ensure fair payments under MAKL urgently

“For the sake of Kenyan patients, we demand immediate settlement of the Kshs 30 billion  in NHIF arrears, either through full payment or a transparent settlement plan,” he stressed.

He also emphasized the need to revise the SHA outpatient reimbursement model to better reflect actual operational costs and ensure that payments under the MAKL scheme are fair and timely.

Dr. Lishenga further appealed to Parliament, civil society, and professional organizations to support these essential reforms to protect Kenya’s healthcare system from an imminent collapse. 

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