Rejected Claims are not fraud: Why this distinction matters for SHA and UHC

As Kenya advances the implementation of the Social Health Authority (SHA), a troubling narrative has begun to emerge in public discourse. The idea that rejected healthcare claims are synonymous with fraud. This misunderstanding is not only inaccurate but also harmful to the success of universal health coverage.

 A rejected claim is an administrative outcome. Fraud is a criminal act. The two are fundamentally different, and conflating them risks undermining trust in the healthcare system at a time when cooperation and confidence are most needed.

 A rejected claim simply means that SHA has declined to pay a submitted claim in its current form. This may arise from missing documentation, incorrect coding, inactive member status, services outside the benefit package, exceeded limits, late submission, or failure to follow referral pathways. These are procedural and operational issues that occur in every insurance system globally, both public and private.

 Rejected claims are common in healthcare financing. They are reviewed, corrected, appealed, or resubmitted. They do not, by themselves, imply dishonesty, wrongdoing, or criminal intent.

 Fraud, on the other hand, requires intentional deception. It involves deliberate actions such as billing for services not rendered, falsifying diagnoses, inflating costs knowingly, impersonation, or collusion between providers and patients. In law and in practice, fraud requires evidence and proof of intent. It cannot be inferred from an administrative rejection.

 The distinction matters because language shapes behaviour.

 When rejected claims are casually labelled as fraud, healthcare provider especially small and medium facilities operate under fear. Many already work on thin margins, managing staff salaries, supplier payments, and operational costs while adapting to a new national insurance framework. Fear of being branded fraudulent discourages full participation in SHA, delays service delivery, and promotes defensive practices that ultimately harm patients. 

This confusion also erodes trust between SHA and providers. Universal health coverage is not achieved through suspicion and intimidation. It is achieved through partnership, predictability, clear rules, and mutual accountability.

 Public trust is also at stake. When citizens hear repeated claims that hospitals are submitting “fraudulent claims,” confidence in healthcare providers diminishes. Patients begin to doubt the integrity of doctors, pharmacists, and hospitals often unfairly. This damages the healthcare ecosystem and distracts from genuine reform.

This is not to suggest that fraud does not exist. It does, as it does in every health system worldwide. But fraud is identified through patterns, audits, investigations, and evidence not through isolated rejected claims. Repeated anomalies, deliberate circumvention of rules, or systematic abuse must and should be investigated through proper channels and due process.

 SHA itself is a system in transition. Policies are still being refined, digital platforms improved, benefit packages clarified, and providers onboarded at scale. In such a period, claim rejections are inevitable. They are a normal part of system maturation.

 The appropriate response to rejected claims is capacity building, clearer guidelines, better communication, efficient appeals mechanisms, and continuous engagement with providers not public suspicion or implied criminality.

 Going forward, several steps are essential. 

First, SHA should publicly and formally clarify that rejected claims do not constitute fraud. Such a statement would stabilise provider confidence and improve collaboration.

 Second, there must be a clear institutional separation between claims management processes and fraud investigation mechanisms. Each has a role, but they must not be confused. 

Third, healthcare providers must strengthen internal claims governance, documentation, training, and audit systems to reduce avoidable rejections and improve compliance. 

Finally, public discourse around SHA must be responsible. Words matter. Labels matter. Systems are strengthened or weakened by how challenges are framed.

 Universal health coverage depends on trust between citizens and the state, between payers and providers, and between policy and practice. A rejected claim is an administrative outcome. Fraud is a criminal act. Confusing the two does not protect public resources , it weakens the healthcare system we are trying to build.

 Executive Director Luton Medical Hospital