SHA faces collapse over Sh76b hospital debt, lawmakers warn
National
By
Okumu Modachi
| Oct 08, 2025
The financial woes surrounding the Social Health Authority (SHA), including a Sh76 billion debt crisis in unpaid hospital bills, could become a “legal time bomb” that triggers its collapse, lawmakers have warned.
The debt includes arrears owed to hospitals under the Rural and Urban Private Hospitals Association (Rupha).
According to legislators Onesmus Ngogoyo (Kajiado North), Anthony Kibagendi (Kitutu Chache South), Joseph Munyoro (Kigumo) and Dr Makali Mulu (Kitui Central), the unresolved claims could lead to legal battles that may ultimately force the dissolution of SHA if not addressed.
Rupha recently suspended services to SHA beneficiaries while demanding settlement of pending payments, saying many member hospitals are already financially strained.
READ MORE
How Tuk-tuk ride inspired Egyptian bank's foray into Kenya
More land, less yield: Cotton sector struggles with low output amid expansion
New push for pension funds in the region to pool resources
African firms race to lead continent's digital transformation
Octagon Africa, Alexforbes partner to expand retirement savings for MSMEs
CBK cuts key lending rate, defies banks' calls for sharper cuts
Lamu awaken with port business, property, tourism and agriculture
Kindiki calls for digital trade overhaul as Kenya takes COMESA chairmanship
Appearing before a parliamentary committee, Rupha chairperson Dr Brian Lishenga revealed that as of August 2025, the total debt stood at Sh76 billion, including Sh33 billion inherited from the defunct National Hospital Insurance Fund (NHIF) and Sh43 billion owed by SHA.
“We estimate that Rupha members are owed about Sh15 billion of this national amount,” said Dr Lishenga.
MPs accused the government of creating the crisis by promising Kenyans comprehensive, commercial-like health covers that the Social Health Insurance Fund (SHIF) Act does not legally provide.
Ngogoyo noted that claims for maternity, oncology and advanced inpatient care, which citizens were told would be covered, “are being rejected because they fall outside the Essential Benefits Package (EBP) and the gazetted tariffs the SHIF Act permits SHA to pay.”
“This is not simply a funding shortfall or administrative backlog,” he said. “It is the predictable outcome of a policy that rolled out ambitious benefits while legally shackling the payer.”
Kibagendi added that SHA’s systems have become automatic enforcers of the law.
“At best, patients are left with partial bills and shattered expectations. Hospitals face insolvency as staff go unpaid for months while the health system continues to fragment,” he said.
Section 48(6) of the SHIF Act criminalises payments beyond the EBP and prescribed tariffs, while the Public Finance Management (PFM) and anti-corruption laws compound the risk for accounting officers.
“The resulting incentive is stark,” said Kibagendi. “Settle legitimate bills and risk prosecution, or obey the law and let hospitals and patients suffer. Fear, not finance, has frozen claim settlements.”
SHA Chief Executive Officer Dr Mercy Mwangangi did not respond to inquiries from MPs. She was expected to explain the total amount owed to hospitals and why claims remain unpaid, as well as the legal basis for offering expanded benefits to civil servants, teachers and police officers.
Dr Lishenga said SHA’s liquidity challenges have worsened the situation. The authority collects between Sh5.4 billion and Sh6 billion in monthly contributions but receives claims amounting to Sh8.8 billion leaving a Sh3 billion monthly deficit.
“To stay afloat, SHA is rejecting about Sh10.6 billion in claims and holding another Sh24 billion in review, effectively throttling payments to manage liquidity,” he said.
Kibagendi warned that unless Parliament amends the law to accommodate expanded benefits, SHA must ensure hospitals sign contracts strictly limited to the EBP and gazetted tariffs.