Teachers and Police Face Service Suspension in Medical Scheme Crisis
The hospitals contracted under the multibillion-shilling government-funded medical insurance scheme for teachers, police officers, and prison officers have threatened to suspend services due to unpaid capitation claims amounting to Sh5 billion. As a result, policyholders within the scheme will cover their medical expenses out of their own pockets.
Despite this, the government released Sh17.6 billion to the Teachers Service Commission (TSC) in the current fiscal year to cover medical insurance for teachers in public schools and Sh13.6 billion to the National Police Service Commission (NPSC) to cover police and prison officers.
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The policy for police and prison employees comprises Sh5 billion for Work Injury Benefits Act (Wiba), Group Personal Accident (GPA), final expense, and group life insurance, as well as Sh8.6 billion for medical coverage.
The latest disclosures come as the Senate and the National Assembly probe the subject, specifically the legal position of Medical Administrators Kenya Limited (MAKL), which has delayed the processing of capitation claims, causing hospitals to become enraged.
Nominated Senator Raphael Chimera, who sought the House statements on the tardy handling of medical claims for teachers, police officers, and prison officers, seeks the Senate Health Committee to summon Minet Kenya, a consortium of insurance companies led by CIC General Insurance Limited and MAKL.
Senator Chimera reported that they have summoned the involved parties to come and explain the matter. Furthermore, Senator Chimera mandates MAKL to specify the count of individual beneficiaries and the panels of medical and healthcare service providers.
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Senator Chimera, casting doubt on the legitimacy of capitation in Kenya, declared that the committee might compel Auditor-General Nancy Gathungu to conduct a forensic audit of the administration of the teachers, police, and jail systems.
The purpose of this specific audit is to mandate insurance companies to provide a comprehensive report, including a list of hospitals, the outstanding amounts, details of services rendered, and clarification on the whereabouts of the funds.
The senator stressed the importance of verifying whether the hospitals have genuinely not been paid and called for transparency in accounting for the allocated funds.
Nairobi West Hospital is one of the health establishments that has written to MAKL demanding payment for services provided, owing Sh576.79 million in outstanding medical claims.
The medical service provider was reported to persistently accumulate the mentioned amounts as it extended services to members. Consequently, the company has surpassed its credit limit of Sh200 million. The letter dated November 14, 2023, was reportedly copied to the Inspector General of Police Service and Commissioner-General of Kenya Prisons Service (KPS).
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The communication highlights that the failure to meet contractual payment obligations has resulted in operational constraints for the hospital. This includes challenges such as the inability to remunerate doctors, service providers, and suppliers, thus adversely affecting the procurement of essential medical supplies and consumables.
In fulfillment of its contractual obligations to MAKL, the hospital is threatening to cease medical services until it receives outstanding payment. Such an action could have catastrophic consequences for policyholders.
The letter specifies that the medical service provider will formally communicate any planned suspension of services in writing seven calendar days prior to the intended suspension taking effect.
Ms Rosemary Kuraru, on behalf of Inspector-General of Police Japheth Koome, wrote to the CEO of CIC General Insurance Limited on November 21, 2023, regarding the Nairobi West Hospital’s demand for payment of pending claims.
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The teachers’ medical service system, which has now been the subject of several complaints about poor service, has been in operation for nine years.
The National Assembly and Senate express concern, asserting that MAKL is a private company. They highlight that the procurement of insurance for TSC is camouflaged as an insurance plan.
Minet Kenya is the scheme tendering entity for TSC, and a consortium of insurance companies led by CIC General Insurance Limited is the scheme tendering entity for police.
Procuring organizations (TSC and NPSC) directly pay the government-mandated premiums to Minet Kenya and CIC General Insurance Limited. Subsequently, the insurance companies distribute the funds to MAKL for capitation purposes. Following this, MAKL appoints hospitals and doctors, establishing them as a network to provide services within the system.
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The suffering of the scheme’s insured begins when MAKL, which retains all admission rights, negotiates with hospitals to deliver care at very cheap capitation rates for patients in order to maximize revenues.
The hospitals must also make a profit from MAKL’s modest capitation payments.
Hospitals contracted by MAKL ultimately maximize revenues by employing tactics such as blatant denial of treatments or subjecting patients to countless hassles, including prolonged waiting times, leading them to abandon the process and opt for out-of-pocket financing elsewhere.
Recently, the Education Committee of the National Assembly received information indicating that critical surgeries requiring prompt medical attention may face delays of several days. This situation forces individuals to either explore alternative financing options or confront the grim possibility of succumbing while awaiting treatment.
The more patients a hospital treats under MAKL, the more money it makes from capitation fees.
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In order to get to the bottom of these difficulties, the Senate has summoned the TSC, NPSC, and Insurance Regulatory Authority (IRA), among others, for answers on efforts taken by MAKL to address the claims processing delays.
Teachers and Police Face Service Suspension in Medical Scheme Crisis