A private technology company has quietly extracted Sh1.2 billion from Kenya's public health insurance system through automatic deductions from hospital payments, raising urgent questions about transparency and the diversion of funds meant for healthcare providers.
Court documents filed by three petitioners, including Busia Senator Okiya Omtatah, reveal that Finsprint Limited has received the money through a two per cent levy deducted from Social Health Authority claims paid to hospitals treating patients under the state-owned insurance scheme. The charge is automatically deducted from reimbursements owed to healthcare facilities for treating Kenyans.
How the System Works
The contested deduction operates through the Health Information Management System, or HIMS, the digital platform hospitals must use to submit claims to SHA, obtain pre-authorisation and receive payment for patient care. It's taken directly from the value of those claims before hospitals see the money.
Business Registration Service records show Finsprint Limited was incorporated on July 12, 2020, with a nominal share capital of just 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 belong to Impactsoft Technologies Group Limited, making it Finsprint's majority shareholder.
Registry records identify Impactsoft as a Kenyan company but don't 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. However, the Business Registration Service records don't establish whether it's the same entity listed as Finsprint's majority shareholder.
Legal Challenge Over Missing Authority
In a petition filed at the High Court in Vihiga, the petitioners accuse the government of imposing the deduction without legal authority, parliamentary approval or public participation. The three petitioners—Dr Benjamin Gikenyi Magare, Eliud Karanja Matindi and Mr Omtatah—want interim orders suspending the two per cent HIMS System Utilisation Fee until the case concludes.
They also seek orders stopping implementation of any circular, letter, Gazette notice or other instrument authorising 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 court papers, Dr Magare discovered the deduction on April 8 while processing claims at a SHA-accredited health facility. He wrote to SHA, the Digital Health Agency, the Health Ministry and the National Treasury on July 1 seeking the legal basis for the deduction but received no explanation.
"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.
Sh60.7 Billion in Claims Affected
The petition alleges that SHA had disbursed about Sh60.7 billion in claims, translating into approximately Sh1.2 billion deducted through the disputed charge. The figure represents the petitioners' calculation and hasn't been determined by the court.
Claiming double taxation, the petitioners contend that no law authorises the deduction from healthcare providers' claims. "No legislation or statutory authority authorises the respondents to deduct the said two per cent HIMS System Utilisation fee from the claimed amount," states Dr Magare, adding the levy lacks a legal and constitutional basis.
He further argues that there's "no clear road map where the fee goes and how it is budgeted and appropriated."
They also claim the fee amounts to taxation outside the constitutional framework governing public revenue collection. "The two per cent HIMS System Utilisation fee is not based on any legislation," the petition says. It adds that "there was no public participation when introducing the impugned fee."
Privacy and Accountability Concerns
Questioning Finsprint's role in the SHA payment process, the petition alleges the deductions divert part of hospitals' reimbursement claims to the private company, reducing the amounts paid to healthcare providers.
The petition also raises concerns over patient data, claiming that exposing information to a third party would violate constitutional privacy protections and the Data Protection Act.
"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," Dr Magare says. "There is no accountability of administrative actions of the respondents as provided in Article 232(1)(e) of the Constitution."
The dispute comes amid broader scrutiny of SHA's implementation following the transition from the National Health Insurance Fund to the new universal health insurance system. Private hospitals have recently questioned the unexplained deductions from reimbursement claims and sought disclosure of the contractual or legal basis for the charges.
The respondents hadn't filed responses to the petition at the time of publishing this article, and the court hadn't determined the allegations.
Why This Matters:
The alleged diversion of Sh1.2 billion from Kenya's public health system to a private company raises fundamental questions about accountability in the management of funds meant to provide healthcare to ordinary Kenyans. When hospitals receive less money than they're owed for treating patients, they face pressure to cut services or deny care to those who can't pay out of pocket. The lack of legal authority, parliamentary oversight or public participation in imposing this charge suggests a breakdown in democratic controls over public spending. If the petitioners' allegations are accurate, the arrangement would represent exactly the kind of opaque public-private relationship that enables corruption and undermines trust in government institutions. Patient data privacy concerns add another dimension: Kenyans' sensitive health information may be exposed to private entities without their knowledge or consent, violating constitutional protections meant to safeguard citizens from intrusive surveillance and data exploitation.