Nairobi — Artificial intelligence (AI) has helped the Social Health Authority (SHA) uncover fresh cases of suspected fraud in Kwale County, Health Cabinet Secretary Aden Duale has revealed, as new details emerge on how Kenya lost billions of shillings through fraudulent health insurance claims.
Appearing before the Senate Health Committee, Duale said SHA's AI-driven fraud detection system flagged extreme anomalies in claims data, including a case in Kwale County where one parent was registered with 381 dependents under the national health insurance scheme, raising red flags over manipulation of beneficiary records.
"Our system has an AI-driven fraud engine that detects anomalies in real time," Duale told lawmakers. "We have one parent whose dependent children were 381 in Kwale County."
The Health CS said the system is also capable of tracking service delivery patterns at the facility level, including the number of procedures carried out by individual hospitals.
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He cited cases where patients were allegedly undergoing dialysis as many as ten times a day, a frequency he termed medically impossible and a clear indicator of fraud.
Duale said all cases flagged through the AI system will be forwarded to the Directorate of Criminal Investigations for further inquiry and possible prosecution, warning that facilities and individuals involved in defrauding the health system will face the full force of the law.
The revelations come amid heightened scrutiny of SHA following an audit by the Ministry of Health, which found that Kenya lost Sh11 billion through fraudulent claims submitted to the authority.
The audit, conducted between October 2024 and April 2025, revealed that most of the fake claims originated from private hospitals operating under the Universal Health Coverage (UHC) programme.
Speaking previously to the Daily Nation, Duale said the government is pursuing recovery of the lost funds through the reimbursement system, adding that the transition from the National Health Insurance Fund to SHA in 2024 exposed long-standing weaknesses that had been exploited by rogue providers.
According to the audit, some health facilities falsely converted outpatient services into inpatient admissions to claim higher payouts, while others billed for services that were never rendered or inflated charges for the same procedures.
The review also flagged facilities reporting unusually high numbers of caesarean sections, far exceeding World Health Organization thresholds, further pointing to systemic abuse of the claims process.
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Currently, SHA notifies health facilities of rejected claims and outlines the documentation required for successful processing as part of tightened controls aimed at sealing loopholes.
In September last year, Duale handed over 1,188 case files to the DCI, citing widespread fraud that had undermined patient care and drained public resources.
He said the cases involved practices such as upcoding, where hospitals billed for more expensive procedures than those actually performed, falsification of medical records, conversion of outpatient visits into inpatient admissions, and phantom billing involving non-existent patients.
Of the total files submitted, 190 originated from SHA and involved 24 facilities with conclusive evidence of fraud, 61 facilities under active investigation, and 105 facilities that had already been closed by the Kenya Medical Practitioners and Dentists Council.
A further 998 files were submitted separately by the regulator and linked to facilities that were unregistered, unlicensed, or operating below required medical standards.
Duale has maintained that the use of AI and real-time digital monitoring is central to restoring confidence in the country's health financing system, arguing that the detection of fraud demonstrates improved oversight rather than failure, as the government pushes ahead with universal health coverage reforms.
