A private technology company linked to the Social Health Authority (SHA) payment system is at the centre of a court case over claims that it received about Sh1.2 billion through a two percent deduction made on payments meant for hospitals treating patients under the government’s health insurance programme.
The case, filed before the High Court in Vihiga, challenges the legality of the deduction, arguing that it was introduced without following the required legal process.
The petitioners claim the money has been deducted from hospital claims through the Health Information Management System (HIMS), a digital platform used by healthcare facilities to submit claims, seek approval and receive payment from SHA.
According to court documents, the company managing the HIMS System Utilisation Fee is Finsprint Limited. The petitioners estimate that the company may have received about Sh1.2 billion after SHA paid hospitals around Sh60.7 billion in claims by July 1.
However, this figure is based on calculations presented in court and has not been confirmed by the court or any government agency.
The petition was filed by Busia Senator Okiya Omtatah together with Dr Benjamin Gikenyi Magare and Eliud Karanja Matindi. They want the court to immediately stop the deductions until the case is heard and determined.
They argue that there is no Act of Parliament, Gazette notice or public participation process that approved the two percent charge.
The petitioners also want the court to suspend any circular, notice or administrative directive that may have been used to introduce the deduction.
They insist that no existing law allows money to be deducted from hospital payments in this manner.
Company records show that Finsprint Limited was registered on July 12, 2020, with a share capital of Sh100,000 and a registered office in Mombasa.
The company has two directors, Issa Sheikh Mohamed and Abdulhakim Ibrahim Sheikh. Ibrahim owns 425 of the company’s 1,000 issued shares, while the remaining 575 shares are owned by Impactsoft Technologies Group Limited, making it the majority shareholder.
Although company records identify Impactsoft as a Kenyan company, they do not provide details about its operations or ownership.
A company with the name Impactsoft Technologies also operates from Wylie, Texas, describing itself as an international technology services provider.
However, there is no confirmed link between that company and the Kenyan shareholder named in the court documents.
Dr Magare says he first noticed the deduction on April 8 while processing claims at a health facility accredited by SHA.
After seeing part of the approved reimbursement deducted under the HIMS System Utilisation Fee, he wrote to SHA, the Ministry of Health, the Digital Health Agency and the National Treasury requesting documents explaining the legal basis for the charge.
According to the petition, the agencies did not provide information showing who authorised the deduction, where the money was deposited or how it was being managed.
The petitioners argue that the deductions reduce funds meant for hospitals after they have already treated patients and received approval for payment.
They further claim that the government is collecting money on behalf of a private company without making public the contract, procurement process or legal framework supporting the arrangement.
They also question whether Parliament approved the fee or whether it was included in the national budget before hospitals began losing two percent from every approved claim.
The case also raises concerns about patient data handled through the HIMS platform.
The petitioners argue that allowing a private company to process sensitive medical information could raise privacy and data protection concerns if proper safeguards are not in place.
Among those named as respondents are SHA, Finsprint Limited, the Health Cabinet Secretary, the Principal Secretary for Medical Services, the SHA Chief Executive Officer, the National Treasury Cabinet Secretary, the Kenya Revenue Authority, the Digital Health Agency and the Attorney General.
The Auditor General and the Controller of Budget have been listed as interested parties.
The dispute comes at a time when SHA continues to face criticism over delayed hospital payments, rejected claims and system challenges during the transition from the former National Health Insurance Fund.
At the time the case was reported, none of the respondents had filed their response, and the court had not made any ruling on the legality of the two percent deduction, the estimated Sh1.2 billion collected or the role played by Finsprint Limited.
The court is expected to determine whether the deduction was lawfully introduced and whether the money collected from hospital claims was handled in accordance with the law.
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