A little-known private technology company has collected an estimated Sh1.2 billion through automatic deductions from government health insurance payments to hospitals, raising questions about transparency and the legal authority behind the charges. Court documents filed by three petitioners, including Busia Senator Okiya Omtatah, identify Finsprint Limited as the recipient of a two per cent levy deducted from Social Health Authority claims paid through July 1.
The deduction occurs through the Health Information Management System, the digital platform hospitals use to submit claims, obtain pre-authorisation and receive reimbursement for treating patients under the state-owned insurance scheme. It's taken directly from claim values before hospitals receive payment. Business Registration Service records show Finsprint Limited was incorporated on July 12, 2020, with 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.
The Corporate Structure
Mr Ibrahim owns 425 of Finsprint's 1,000 shares. 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, Business Registration Service records don't establish whether it's the same entity listed as Finsprint's majority shareholder.
The petitioners — Dr Benjamin Gikenyi Magare, Eliud Karanja Matindi and Mr Omtatah — filed their case at the High Court in Vihiga, accusing the government of imposing the deduction without legal authority, parliamentary approval or public participation. They're seeking interim orders suspending the two per cent HIMS System Utilisation Fee from healthcare providers' claims until the case concludes. They also want orders stopping implementation of any circular, letter, Gazette notice or other instrument authorising the deductions.
No Legal Basis Provided
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.
According to court papers, 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. "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 argues there's "no clear road map where the fee goes and how it is budgeted and appropriated."
The petitioners 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." The petition alleges the deductions divert part of hospitals' reimbursement claims to the private company, reducing amounts paid to healthcare providers.
Data Privacy Concerns
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 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. 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 case exposes fundamental questions about fiscal accountability and the proper limits of government authority in managing public health funds. If the allegations hold, Sh1.2 billion has been diverted from healthcare providers through a mechanism that bypassed parliamentary appropriation and constitutional requirements for public participation in taxation. The involvement of a private company with minimal capitalization and unclear ownership structure in collecting what amounts to a mandatory levy raises concerns about transparency in public-private partnerships. Healthcare providers operating on tight margins can't absorb unexplained deductions that reduce their reimbursements for treating patients. The absence of any legal framework or disclosed contract governing these payments suggests a breakdown in the checks and balances that should govern public expenditure. Beyond the immediate financial questions, the case tests whether government agencies can impose charges on citizens and service providers without explicit legislative authorization — a principle central to constitutional governance and fiscal discipline.