Kenya's new Social Health Authority (SHA), established to replace the graft-ridden National Health Insurance Fund (NHIF) and restore public confidence in the health system, has become embroiled in a massive fraud scandal. Health Cabinet Secretary Aden Duale revealed that SHA had rejected claims amounting to Sh10 billion from fraudulent hospitals, sparking widespread outrage and calls for his personal accountability from health stakeholders and leaders across the country.

President William Ruto broke his silence on the scandal, issuing a stern warning that decisive action would be taken against implicated hospitals and individuals. Addressing delegates at State House, Nairobi, the President vowed that corruption would not be tolerated in the new health fund, emphasizing that he would not allow SHA to collapse as NHIF did due to theft. He stated that the digitisation process within SHA was actively detecting fraudulent claims, identifying ghost hospitals, and uncovering fake patients. So far, over 1,000 health facilities have been shut down or suspended for malpractice, including double billing, ghost patient admissions, and inflated bed capacities. Specific instances include the closure of 31 hospitals in June and the suspension of 40 more in August for fraud and collusion, with SHA Chief Executive Mercy Mwangangi announcing an additional 45 suspensions, bringing the total to around 85 institutions at one point. The President stressed that not only would fraudulent hospitals be shut down, but those behind the scam would also be prosecuted, with cases of doctors and clinical officers referred to the Directorate of Criminal Investigations (DCI).

The scandal has exposed significant loopholes in the system, particularly with reports that some closed hospitals were not even listed in the Kenya Master Health Facility Registry (KMHFR), the official government database for licensed facilities. This has led to criticism that SHA failed to verify claims against existing national records. Further fueling public distrust, the Social Health Authority quietly pulled down its official website amidst the revelations of fraud.

Health sector players have pointed fingers at CS Aden Duale, demanding his resignation and accusing him of failing to manage the ministry. The Rural and Urban Private Hospitals Association of Kenya (RUPHA) chairperson, Brian Lishenga, accused Duale of overstepping his mandate and destroying systems instead of building them. Critics also allege deep-rooted conflicts of interest within the Ministry of Health, claiming that individuals close to power have financial interests in pharmaceutical and technology companies, including the National Equipment Service Programme. Ministry staff also suggest that the Digital Health Authority (DHA), a government agency, has subcontracted private companies for critical work, and Duale has given DHA more prominence over SHA in processing payments and claims, thereby exposing these processes to private entities.

The Health NGOs Network (HENNET) has called for the immediate arrest and prosecution of all individuals implicated in fraudulent payments, demanding a forensic audit and the recovery of lost funds. HENNET highlighted alarming reports of SHA funds being disbursed to facilities falsely licensed, non-operational, or ineligible for high-level services, citing examples like Tumticha Medical Centre reportedly receiving Sh1.5 million without authorization for specialized care, and Ladnan Hospital allegedly receiving Sh66 million. HENNET urged DCI, EACC, and the Judiciary to act swiftly and decisively, also demanding that members of oversight committees, claims officers, and SHA approval teams be held accountable.

In response, Health CS Aden Duale dismissed calls for his resignation, accusing some lawmakers of blackmail and conflict of interest. He claimed that some legislators own health facilities flagged in the SHA payment claims saga and challenged his accusers to provide evidence of his ownership or directorship in any such facility. Duale defended the cost of the new Integrated Healthcare Information Technology System (IHITS), stating it was approved by the National Assembly and essential for SHA's transparency and processes. He urged Kenyans to allow the government to clean up, prosecute, and surcharge those found culpable without interference, including from his former colleagues.