Health Cabinet Secretary Aden Duale has rejected claims published by the Daily Nation regarding the two percent service fee charged on claims processed through the national digital health system, insisting the deductions are lawful and do not amount to payments to a private company.
The response follows a Daily Nation headline titled “SHA mystery firm paid Sh1.2 billion,” which reported that hospitals had challenged the controversial deductions in court, with petitioners seeking orders to stop the charges.
In a statement issued on Tuesday, Duale said the newspaper’s report created a misleading impression that public money was being channelled to a private firm outside the law.
“My attention has been drawn to the report carried by the Daily Nation on 4th August 2026 concerning the service fee levied on claims processed through the national digital health system. The report creates the impression that public money is being paid to a private company outside the law. That impression is wrong, and I reject it,” he said.
The Cabinet Secretary said digitisation is central to the implementation of Universal Health Coverage, noting that the Social Health Insurance Act requires member identification, pre-authorisation, claims management and settlement of claims to be conducted through a secure and interoperable digital system.
According to Duale, the two percent charge is not an arbitrary deduction but a statutory service fee provided for under the Digital Health (Data Exchange Component) Regulations, 2025. He explained that the fee applies to services offered through the Health Information Management Service (HIMS) and is capped at Sh5,000, meaning it is not an unlimited share of hospital earnings.
He further clarified that the fee is payable to the Digital Health Agency, a state agency established under the Digital Health Act, and not to any private entity. He added that the Social Health Authority (SHA) remains solely responsible for reviewing, processing and paying claims to contracted healthcare providers.
Duale also maintained that all revenue received by the Digital Health Agency is public money subject to constitutional oversight, including audits by the Auditor-General and scrutiny by Parliament. He said there were no hidden accounts or parallel payment systems involved.
Addressing concerns over the technology provider, the CS said the digital system is being implemented under a government contract awarded to the Safaricom Consortium through the Public Procurement and Asset Disposal Act. He noted that while subcontracting is permitted under the law, it does not make any subcontractor a recipient of public funds or give it authority to pay hospitals.
Duale also defended the legal framework underpinning the service fee, saying the regulations underwent a regulatory impact assessment, public participation, parliamentary approval and were published in the Kenya Gazette in April 2025.
With the dispute now before the High Court, the Health CS said the government would present its case through the judicial process rather than in the media.
“The matter is now before the High Court, and I am named as a respondent. The Government will file its full response on the record, and I will abide by the determination of the court. I will not litigate this matter in the press,” Duale said.
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