A private technology firm has been pulled into a legal fight over a two per cent deduction taken from payments the Social Health Authority makes to hospitals for treating patients under the state-owned insurance scheme. Court papers filed by three petitioners, including Busia Senator Okiya Omtatah, say Finsprint Limited has received Sh1.2 billion through the charge, which is deducted directly from SHA claims paid to healthcare providers.
Who Pays, Who Takes
The hospitals at the bottom of the chain are the ones carrying the cost. The contested charge comes out of claims submitted through the Health Information Management System, or HIMS, the digital platform hospitals use to seek pre-authorisation, submit claims and get reimbursed for treating patients. Instead of the full amount reaching providers, the deduction is taken from the value of those claims first. That is the arrangement now under attack in the High Court in Vihiga.
The petitioners — Dr Benjamin Gikenyi Magare, Eliud Karanja Matindi and Mr Omtatah — want interim orders suspending the deduction of the two per cent HIMS System Utilisation Fee until the case is concluded. They also want the court to stop any circular, letter, Gazette notice or other instrument that authorises the deductions. The petition names SHA, Finsprint Limited, the Health Cabinet Secretary, the Principal Secretary for Medical Services, the SHA chief executive, the Treasury Cabinet Secretary, the Kenya Revenue Authority, the Digital Health Agency and the Attorney General as respondents. The Auditor-General and the Controller of Budget are listed as interested parties.
According to the court papers, Dr Magare discovered the deduction on April 8 while processing claims at a SHA-accredited health facility. He says he wrote on July 1 to SHA, the Digital Health Agency, the Health Ministry and the National Treasury asking for the legal basis of the charge, but got nothing back. "The respondents did not give any explanation or any feedback, nor did they provide the role of the second respondent (Finsprint Limited) who is believed to be the beneficiary of the two per cent HIMS System Utilisation fee," the petition states.
The Private Firm in the Middle
Business Registration Service records reviewed by the Nation show Finsprint Limited was incorporated on July 12, 2020, with a nominal share capital of Sh100,000 and a registered address in Mombasa. The company has two directors: Issa Sheikh Mohamed of Nairobi and Abdulhakim Ibrahim Sheikh of Mombasa. Mr Ibrahim owns 425 of its 1,000 shares, while the remaining 575 shares are held by Impactsoft Technologies Group Limited, making it Finsprint's majority shareholder.
Registry records identify Impactsoft as a Kenyan company but do not provide a registered address. An online search found a company using the name Impactsoft Technologies operating from Wylie, Texas, describing itself as a global provider of information technology solutions and services. The Business Registration Service records do not establish whether it is the same entity listed as Finsprint's majority shareholder. That gap sits right in the middle of a payment system handling public health money.
The petitioners say SHA had disbursed about Sh60.7 billion in claims, which would translate into about Sh1.2 billion deducted through the disputed charge. That figure is the petitioners' calculation and has not been determined by the court. They argue that no law authorises the deduction from healthcare providers' claims and call it double taxation. "No legislation or statutory authority authorises the respondents to deduct the said two per cent HIMS System Utilisation fee from the claimed amount," Dr Magare states, adding that the levy lacks a legal and constitutional basis.
What They Say the System Hides
Dr Magare also says there is "no clear road map where the fee goes and how it is budgeted and appropriated." The petition says the charge is not based on any legislation and that "there was no public participation when introducing the impugned fee." In other words, the people paying for treatment, and the providers waiting for reimbursement, were left outside the room while the deduction was built into the machinery.
The petition also says the deduction diverts part of hospitals' reimbursement claims to a private company, reducing what healthcare providers receive. It raises concerns over patient data too, arguing that exposing information to a third party would violate constitutional privacy protections and the Data Protection Act. Dr Magare says, "A government (whether national or county) or any other body is not allowed to be an agent of private entities, where they collect money from poor Kenyans and instead of paying service providers, the same is diverted to private entities. There is no transparency and accountability in dealing with public funds."
He adds, "There is no accountability of administrative actions of the respondents as provided in Article 232(1)(e) of the Constitution." The dispute lands amid broader scrutiny of SHA's rollout after the transition from the National Health Insurance Fund to the new universal health insurance system. Private hospitals have recently questioned unexplained deductions from reimbursement claims and asked for the contractual or legal basis behind the charges. The respondents had not filed responses at the time of publishing, and the court had not determined the allegations.