Hospitals Head to Court Over Controversial 2% SHA Claims Deduction

A fresh legal battle is brewing over the 2 per cent utilisation fee deducted from payments made to healthcare providers under the Social Health Authority (SHA), with a petition seeking to suspend the charge pending the determination of the case.

The petition follows growing complaints from private and faith-based hospitals, which argue that the deduction has been applied to approved claims without adequate consultation or a clear contractual basis. 

Healthcare providers contend that the fee has reduced their reimbursements at a time when many facilities are already facing financial pressure due to delayed claim settlements.

Hospital owners are questioning the legal authority under which the fee is being charged, saying they were never informed of the deduction when they signed agreements to offer services under the SHA programme. 

They have called for greater transparency on how the money is collected, managed and utilised.

In response, SHA and the Digital Health Agency (DHA) have defended the charge, stating that it is a system service fee provided for under the Digital Health Act, 2023 and its accompanying regulations. 

According to the two agencies, the deduction supports the digital infrastructure used to process claims, verify patient eligibility, authenticate healthcare providers and facilitate secure exchange of health information across the country's health facilities.

The agencies have also maintained that the fee is only applied to claims that have already been approved for payment and that the digital platform has improved efficiency by reducing paperwork, minimising fraud and speeding up reimbursement processes.

The outcome of the case is expected to have significant implications for Kenya's healthcare financing framework. If the court grants the orders sought, the decision could affect how SHA reimburses hospitals and how digital health service charges are administered under the country's universal health coverage programme.