Hospitals revolt: RUPHA halts SHA services over KSh30 billion debt

The Rural & Urban Private Hospitals Association of Kenya has announced an indefinite suspension of services under the Social Health Authority (SHA) scheme, citing unpaid arrears and an unworkable outpatient reimbursement model.
The suspension, effective Monday,24 February 2025, will see patients under SHA forced to make cash payments at private and faith-based hospitals.
In a strongly worded statement issued on 20 February, RUPHA Chairman Dr. Brian Lishenga said the decision was unavoidable due to the government’s failure to address pressing financial concerns that threaten hospital operations.
“This decision has not been made lightly. It follows months of failed engagements, unfulfilled promises, and growing financial distress among hospitals, which now threatens the very survival of healthcare institutions across Kenya,”
Healthcare Crisis
At the heart of RUPHA’s grievances is an outstanding debt of KSh 30 billion in unpaid claims dating back to 2017. The delay in settlement has triggered a domino effect, crippling hospitals financially and leading to mass job losses, stockouts of essential medicines, and the inability to pay doctors and nurses.
“Hospitals have defaulted on loans and overdrafts used to sustain operations while awaiting payments,” the statement read. “Pharmaceutical suppliers have blacklisted hospitals that cannot clear outstanding bills.”
Despite numerous engagements with the government, the Social Health Authority has maintained that the National Health Insurance Fund (NHIF) liabilities are not its responsibility, leaving hospitals in what RUPHA describes as a “financial abyss.”
SHA Transition Crisis
RUPHA’s statement painted a grim picture of SHA’s operational failures, citing findings from the latest SHA Transition Status Report. According to the report:
89% of hospitals reported that the SHA claims portal remains nonfunctional, making it impossible to process reimbursements.
54% of hospitals have not received any payments from SHA since December 2024, with those receiving payments unable to verify what the payments covered.83% of hospitals reported serious difficulties verifying patient eligibility due to SHA system glitches, leading to care denials.
SHA’s outpatient services scored just 1.87/5, with doctors warning that the reimbursement model is financially unsustainable.
74% of hospitals reported being unable to reach SHA for claim-related queries due to non-responsive communication channels.
“Despite these overwhelming challenges, SHA expects hospitals to continue offering services without resolving the systemic failures crippling the sector,” RUPHA declared.
The association also rejected SHA’s new outpatient reimbursement model, which proposes paying hospitals less than KSh 75%patient per month.
“Under this model, no hospital can pay doctors and nurses, procure life-saving drugs, or maintain essential medical equipment,” RUPHA stated. “This is a direct threat to patient safety, forcing hospitals into cost-cutting measures that will compromise the quality of healthcare.”
Beyond SHA, RUPHA members also announced their withdrawal from the Medical Administrator Kenya Limited scheme, which provides coverage for police officers and teachers.
According to RUPHA, MAKL has failed to pay hospitals for over 11 months, forced arbitrary discounts, and engaged in unethical practices favoring its own clinics.
“Without urgent government intervention, teachers and police officers will be left without quality healthcare services, further straining public hospitals already at breaking point,” the statement warned.
To avert a total collapse of private and faith-based hospital services, RUPHA issued the following demands:
Settlement of the KSh 30 billion NHIF arrears through full payment or a clear, transparent settlement plan.
Revision of the SHA outpatient reimbursement model to reflect actual operational costs.
Fair and timely payments under the MAKL scheme to prevent further exploitation of hospitals.
RUPHA called on Parliament, civil society, and professional bodies to support urgent reforms before Kenya’s healthcare system crumbles.
Expressing regret over the service suspension, RUPHA assured the public that it remains committed to providing quality care but cannot continue under the current conditions.
“We stand ready to work with the government if real solutions are presented. However, we cannot continue subsidizing a broken system at the cost of patient safety and hospital sustainability,” Dr. Lishenga said.
Agency:The Rural & Urban Private Hospitals Association of Kenya