Health CS Duale dismisses claims Ksh.1.2B SHA funds paid to private firm

Health Cabinet Secretary Aden Duale has dismissed claims that Ksh.1.2 billion from the Social Health Authority (SHA) was paid to a private proxy company, clarifying that the charges associated with Kenya's national digital health system are lawful, publicly regulated and paid to a State agency.

Duale, in a statement on Tuesday, was responding to a media report that questioned the collection of service fees through the country's digital health platform, saying the publication had created "the impression that public money is being paid to a private company outside the law."

The CS defended the government's digitisation agenda under Taifa Care, arguing that the transition to a fully digital health financing system is anchored in law and is essential for implementing Universal Health Coverage (UHC).

He said the Social Health Insurance Act requires key processes, including member registration, pre-authorisation, claims management and claims settlement, to be undertaken through a secure and interoperable digital platform.

“The report creates the impression that public money is being paid to a private company outside the law. That impression is wrong, and I reject it,” he said.

"Every shilling received by the Digital Health Agency is public money and is accounted for as public money," he said, adding that the agency's accounts are audited under the Public Finance Management Act and the Public Audit Act before being tabled in Parliament.

According to Duale, the contentious service fee is provided for under the Digital Health (Data Exchange Component) Regulations, 2025, which prescribe a two per cent charge on services processed through the Health Information Management Service (HIMS), capped at Ksh.5,000 per transaction.

He maintained that the levy is payable to the Digital Health Agency (DHA), a State corporation established under the Digital Health Act, and not to any private entity.

“The service fee is not a discretionary charge. Regulation 11(2) of the Digital Health (Data Exchange Component) Regulations, 2025 requires users and consumers of the shared resources in the System to pay the service fee specified in the Third Schedule… This is a charge by a public body, for a public system, authorised by statute,” he stated.

The CS further dismissed suggestions that private firms receive or control funds meant for healthcare providers, saying the responsibility for processing and paying claims remains exclusively with the Social Health Authority.

"No private entity receives, holds, controls or disburses funds due to healthcare providers it is the Social Health Authority alone that reviews, processes and pays claims to contracted providers out of the Funds established under that Act," he said.

Duale also sought to reassure the public that all revenue collected by the Digital Health Agency is subject to public financial accountability.

Addressing concerns over private sector involvement in the digital platform, the CS confirmed that the system is being implemented under a government contract with the Safaricom Consortium, procured in accordance with the Public Procurement and Asset Disposal Act.

He said the consortium's engagement of subcontractors is a lawful commercial arrangement that neither gives them access to public funds nor any role in paying healthcare facilities.

"The engagement of a sub-contractor by a contracted party is a lawful commercial arrangement. It does not make that sub-contractor a recipient of public funds outside the law, and it gives it no role whatsoever in paying hospitals," he said.

The CS also rejected claims that the regulations introducing the service fee were concealed from the public, saying they underwent regulatory impact assessment, public participation, parliamentary approval and were subsequently gazetted on April 11, 2025.

"A fee set out in a published law, debated and approved by Parliament, is not a mystery," he said.

Duale noted that the dispute over the digital health system has since been filed before the High Court, where he has been named as a respondent.

"The Government will file its full response on the record, and I will abide by the determination of the court. I will not litigate this matter in the press," he said.

Even so, the Health CS acknowledged concerns raised by healthcare providers over claims processing and directed both the SHA and the Digital Health Agency to continue engaging stakeholders to address outstanding issues.