The government has admitted to the two per cent deduction on every SHA claim, confirming that the money is channelled to the Digital Health Agency to run the national health information system.
The admission follows months of hospital owners demanding to see the legal basis for the charge, and a Nation investigation that revealed facilities were told the fee existed without ever being shown the clause authorising it.
In a statement dated August 4, 2026, Health Cabinet Secretary Aden Duale said the fee is not paid to a private company but to the Digital Health Agency, a State body established under Section 5 of the Digital Health Act 2023, to support the Comprehensive Integrated Health Information System.
He said the Agency is authorised by Regulation 11(2) of the Digital Health Data Exchange Component Regulations 2025, prescribed in the Third Schedule, and the fee is expressly capped at Sh5,000 per transaction regardless of claim size. Paragraph 2 of the Third Schedule states that the charge for the Health Information Management Service shall not exceed Sh5,000.
“The service fee is not a discretionary charge,” CS Duale said. “It is a capped fee for the use of a system. It is not an open-ended share of any hospital’s earnings.”
But hospital owners who have been tracking their deductions say the two per cent has been applied to every claim at the stated rate, and are questioning whether the cap is being enforced in practice.
“If a hospital submits a claim for Sh100,000, two per cent is Sh2,000, below the Sh5,000 cap. But if a hospital submits a claim for more than Sh500,000, which the majority of hospitals handling complex procedures or high patient volumes do, two per cent is more than Sh10,000, which exceeds the stated cap. Which is which?” wondered a facility owner.
CS Duale, defending the government’s legal and policy position on the fee, said the regulations were subjected to a regulatory impact assessment, public participation and stakeholder consultation, and were approved by both Houses of Parliament.
Every shilling
“They were published in the Kenya Gazette on April 11, 2025 and have been publicly available since that date,” he said.
“Section 47 of the Social Health Insurance Act 2023 requires that every process under the Act, member identification, pre-authorisation, claims management, and claims settlement, be digitised on a secure and verifiable information system. Building, securing, running, and maintaining that system costs money, and the law provides for how it is paid,” Duale said.
On who receives the fee, he said: “The Digital Health Agency, a state agency established by statute, receives the two per cent. Every shilling it receives is public money, accounted for as public money, audited under the Public Finance Management Act and the Public Audit Act, and reported to the National Assembly following the Auditor General’s review. There is no parallel account and no hidden ledger.”
He did not deny the involvement of the private company Finsprint, but clarified that the system is delivered under a government contract with the Safaricom Consortium, procured under the Public Procurement and Asset Disposal Act, which permits subcontracting.
“A sub-contractor is not a recipient of public funds outside the law. It has no role in paying hospitals,” the statement said. “No private entity receives, holds, controls or disburses funds due to healthcare providers.”
Hospitals have been demanding to know why the two per cent was never disclosed at onboarding. The statement does not address this. It says the regulations have been publicly available since April 2025 and approved by Parliament, but it does not explain why facilities joining the SHA platform were not explicitly told in their contracts that two per cent of every approved claim would be deducted before payment reached their accounts.
Hospitals have also been questioning the role of Finsprint, the payment gateway operator they encounter in payment disputes, which a Nation investigation found sits at the final stage of the payment pipeline between SHA and hospital bank accounts.
CS Duale’s statement does not name Finsprint. It cites the Safaricom Consortium as the contracted system operator and describes subcontracting as a lawful commercial arrangement. It does not explain Finsprint’s specific role, or how a company whose majority shareholder has no traceable physical address in the official registry came to be subcontracted.
Hospital owners at the forefront of demanding accountability on the two per cent said the government’s statement did not settle the matter.
Dr Brian Lishenga, former chairperson of the Rural Urban Private Hospitals Association and a vocal critic on the issue, maintained that facilities were not adequately informed of the fee at onboarding, and that its legal basis, whatever it may be, should have been communicated directly to hospitals when SHA launched, not discovered through the experience of receiving consistently short payments.
On the record
“We are not saying the fee is illegal,” he said. “We are saying that facilities were never told about it. And we are still waiting for transaction-by-transaction records that show us exactly what has been deducted from each claim, on what date, and at what rate.”
Duale’s clearest statement in the document is also his most final.
“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,” the CS said.
The litigation involves hospital associations and civil society groups that have challenged the SHA payment system and the two per cent fee in court.
The High Court will determine whether the fee is legally applied, whether disclosure obligations were met, and whether facilities contracted before the regulations were gazetted have a valid retrospective claim.
