How Kenyans Collude to Steal From Medical Insurers


The Nairobi Women’s hospital scandal, that saw medical insurers suspend their involvement with the healthcare brought to light the plight of medical insurers. Fraud has become a thing in their operations, some internally orchestrated, others perpetrated by outsiders who seek to exploit weak links in these hospitals.

In Kenya, many of the insurance companies become focused on revenue generation and overlook the need to adequately invest in their fraud investigations departments while others have ignored recommendations. Ideally, a fraud investigating department will be tasked with carrying out investigations, provide evidence, recommend that the insurer stops doing business with certain persons or service providers who abet fraud but management refuses to cancel the contracts among other responsibilities.

Hospitals claiming pay for services that they did not deliver

Medical insurers have fallen prey to this scam.  At times the crime is committed in collusion between the hospital employees and the patients. A senior official at UAP Old Mutual mentioned that individual victims of the fraud are subjected to unnecessary or unsafe medical procedures, which can result in countless negative irreversible outcomes. Others are subjected to over-diagnosis and over-prescription, to the advantage of the service providers.

Some patients have their medical records compromised, or legitimate insurance information is used to submit falsified claims. These hospitals will then claim it had an inpatient case, yet the patient was attended in outpatient.

“Two patients with the same condition were sent to a local hospital to seek treatment, but when they returned, the one who had insurance cover was billed higher than the cash-paying patient. This is not acceptable,” he said.

Cardholders and insurance covers 

Some cardholders will commit fraud by using their cards to pay for the treatment of relatives who are not covered. All too often they provide their biometric details while the treatment is administered on the sick relative who is not covered. Some with chronic conditions buy cover but hide their status. But after paying premiums for a short while, they seek expensive treatment.

Most insurance companies still keep manual records as the documents have to be signed, making it easy for them to be misplaced or tampered with. The judicial system has failed to plug in effectively and save the say as some of these cases take forever to be heard and determined.

Following increased cases of fraud schemes employed by fraudsters, insurers lobby, Association of Kenya Insurers (AKI) has resorted to reviewing the pricing of medical bills at a number of undisclosed hospitals.

“We want to come up with a broader strategic direction on how we engage service providers going forward. If we find those who can’t reform, we will not fail to take the punitive action of blacklisting them,” said AKI Executive Director Tom Gichuhi.

Consumers of health insurance have been urged to help insurers fight against fraud by keeping their health insurance and personal information safe and questioning care providers on procedures or billing items they don’t understand.