The Social Health Authority (SHA) in Kenya is set to meet with private and faith-based hospitals to discuss a disputed new contract. The meeting, scheduled for later today, will bring together SHA leadership and associations representing hospitals, including the Christian Health Association of Kenya (CHAK), Kenya Association of Private Hospitals (KAPH), and Rural Urban Private Hospitals Association of Kenya (RUPHA). The discussions will focus on the 2026/27 contract cycle, known as HAKIKA.
The consortium of hospital associations has listed around 40 items of concern to be presented to SHA leadership during the meeting. These concerns include the financial burden on hospitals when SHA delays payment of claims. Under the contract, SHA's obligation to pay is subject to the availability of resources and appropriation of funds by the National Assembly. However, hospitals are prohibited from charging patients, despite being required to register and pay 2.75 percent for salaried individuals to access Social Health Insurance Fund (SHIF) services.
Hospitals have expressed concerns about the payment terms, citing that SHA dictates payment while requiring patients to pay for services. They argue that payment should be made within set timelines, rather than being subject to the availability of funds. The consortium wants SHA to allow hospitals to charge patients for services when funds are not available or suspend SHA services to prevent losses.
Another contentious issue is the claims auditing provision, which hospitals believe could result in deductions being applied beyond individual claims found to have errors. They argue that extrapolating error rates to a wider batch and deducting corresponding amounts is illegal and not based on evidence. According to hospitals, SHA assumes that errors will always occur in their operations, imposing deductions not listed in the Social Health Insurance Act 2023 or SHA General Regulation.
A meeting between hospitals and SHA leadership on Thursday did not yield a consensus, despite the official launch of the contract cycle. Health CS Aden Duale has since directed hospitals to sign the contract by October 1, 2026, while welcoming negotiations. Duale emphasized that the new e-contracting system aims to transition hospitals from transactional relationships towards partnership, without lowering set standards in the contract.
The SHA contract has been disputed, with hospitals arguing that it will render them bankrupt due to the requirement to procure commodities and pay employees. Previously, hospitals have been at odds with SHA over unpaid claims, with some forced to close due to mounting debts. Public hospitals, including Kenyatta National Hospital (KNH) and Moi Teaching and Referral Hospital (MTRH), have also had unpaid SHA claims running into billions.
The dispute between SHA and hospitals has led to limited services in some facilities due to accumulated unpaid claims. Hospitals have accused SHA of taking too long to approve claims, rejecting many without explanation. The authority has also faced criticism for its claims processing and payment procedures. The meeting between SHA and hospital associations aims to address these concerns and find a resolution to the contract dispute.
Key points
- The Social Health Authority and Kenyan hospitals are set to meet to discuss a disputed contract that has sparked concerns over payment terms and claims auditing provisions.
- Hospitals argue that the contract's payment terms and auditing provisions could render them bankrupt and are seeking changes to the agreement.
- The contract dispute has led to limited services in some facilities due to accumulated unpaid claims, with hospitals accusing SHA of taking too long to approve claims.
