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KEMRI Employees Cut Off From Insurance Cover Over Management Failure

  • Since March, employees have been asked to use their cash and then seek refund.
  • Kemri has been unable to clear Sh43 million owed to Madison Insurance.

For four months, over 1,000 employees of the Kenya Medical Research Institute and their 4,000 dependants have not had access to a medical cover despite being frontline workers due to failure by management to clear arrears with the insurer.

Kemri has been unable to clear Sh43 million owed to Madison Insurance. The insurer was awarded a Sh158 million medical insurance deal yet Kemri had only budgeted for Sh115 million. The deal was faulted by unions for being expensive and providing fewer benefits compared to a previous one by National Health Insurance Fund.

Employees now have to pay cash in hospitals and seek refund, which they claim take too long.

The saga started in 2020. Since 2016, the management of Kemri contracted the National Health Insurance Fund to administer a comprehensive medical cover to its employees at a cost of Sh115 million annually, according to the institute’s approved budget for medical insurance for the 2020/2021 financial year.

It continued until October 2020 when the management led by the then boss, Prof Yeri Kombe, contracted and awarded Madison Insurance to provide medical cover to their employees at Sh158 million against the initial budget of Sh115 million, the cash spent on NHIF.

The employees led by their union leaders, Union of Kenya Civil Servants, said they were never consulted and that they had never complained about NHIF.

“We were getting comprehensive medical cover and even our families were getting treatment in the best hospitals in the country and even abroad only for the management to wake up one morning and stop the cover,” said one of the union officials, who sought anonymity.

He added that employees and the management bargained with NHIF for the cover only for them to terminate it without their knowledge.

After failing to convince the management to retain NHIF as the scheme administrator, union leaders on behalf of their members wrote a petition to Mutahi Kagwe, the Health Cabinet Secretary on August 24, 2020, to prevent Kemri officials from contracting a private insurer. 

“We wish to appeal to you to intervene to ensure that Kemri does not contract a private insurer to offer medical services. Kindly note that the government through the Ministry of State for Public Service and Gender has signed a contract with NHIF to offer comprehensive cover to civil servants,” they wrote in the petition.

Cover suspended

However, the union did not get any reaction from the CS and Kemri advertised for the tender on July 20.

The staff medical cover attracted 18 bidders and an evaluation committee consisting of the head of finance, head of procurement and corporation secretary evaluated and awarded Madison Insurance Limited that quoted Sh158 millon.

The approval was done without the nod from the Ministry of Health on whether the extra monies were budgeted for.

They paid the money and the staff started getting the services by October last year, however, on March 1, the management wrote to staff that the cover by Madison had been suspended.

“The management is in consultation with the insurer to resolve the issue. In the meantime, staff who need medical attention are advised to visit a facility of their choice for treatment at their own cost and subsequently claim reimbursement for the medical cost incurred. The claim should be accompanied by a copy of diagnosis, prescription and receipts submitted through the nearest Kemri Centre,” states the directive.

The suspension was reinstated a week later only for it to be done again on April 23. The cover has never been reinstated.

The management wrote to the Health PS Susan Mochache to resolve the matter that led to the suspension of the services.

Employees were again informed to seek medical attention at their cost.

Most of the employees that the Sunday Nationspoke to have had to spend their money on treatment, but the refunding process, they say, is not that easy.

Cited the pandemic

“I had an emergency and did not even have cash in the house. I had to borrow money to take my child to the hospital. I ended up using Sh70,000 which I know may not be refunded,” said one of the employees. 

“And the application for the refund is like you are applying for a grant, very demoralising,” he said.


After awarding the tender, in October 2020, the board through the management in January wrote to the director-general, Public Procurement Regulatory Authority to advise on the procurement process for the staff medical insurance.

The request signed by the then Kemri board chair, Naphtali Agata, stated that management consulted with the board and the finance and development committee during the sitting on October 21.

The board approved for additional funds to finance staff medical insurance cover as quoted by the winning bidder.

Justifying why they took the cover, they cited the pandemic and Kemri’s national role on diagnostic support for Covid-19 where testing for infections has largely been conducted and up to 75 per cent of Covid-19 testing is being done .

The letter stated that close to 40 per cent of Kemri laboratory staff have tested positive for the virus with the institute losing one of its senior staff to the virus.

“With this in mind, Kemri sought a medical insurance cover that provides for Covid-19 insurance for its staff and that of their family members,” states the letter to the PPRA.

The board was requesting to be allowed to get the additional Sh43 million sought for the medical insurance within the institute’s budget.

In a letter signed on March 22, Mr Peter Ndung’u for the PPRA director-general said the authority refused to approve or reject the request saying Kemri had not availed the procurement documents with Madison.

Procurement contract

PPRA noted that Kemri procurement department awarded the contract without sufficient budget.

“Our view is that the issues raised in your letter are contractual in nature which should be addressed within the terms and conditions contained in the contract agreement entered into between the two parties,” it states.

“And as an accounting officer, you have the duty and responsibility of safeguarding and ensuring prudent utilisation of public resources. In addition, there is a need to ensure that the outcome of any action taken on the subject procurement contract does not result in loss of public funds,” the authority advised Kemri.

The union has now petitioned the ministry again, saying Kemri violated the Procurement Act, Public Finance Management Act and Leadership and Integrity Act during the procurement of the medical insurance cover.

It stated that the procurement of medical insurance from Madison at Sh158 million was way above an approved budget of Sh115 million.

“The head of procurement function and the accounting officer failed to safeguard the taxpayers money in this particular procurement which resulted in a loss of Sh43 millions of taxpayers money. The two public officers had a duty within the Public Procurement and Asset Disposal Act, 2015 to save taxpayers money but they did not,” reads the petition signed by Union of Kenya Civil Servants Vice Chairman Benjamin Nyaga.

The union is now demanding that the staff be taken back to NHIF and the officers that procured the private insurance scheme suspended .

Kemri director-general Samuel Kariuki said the management did not withdraw from NHIF but the cover had ended in October 2019 after which a procurement process to source for a service provider started. He said NHIF did not bid for this tender, which was openly advertised in the newspaper.

“The law does not require the management to seek for permission to advertise any services provided to the institute and this was also the case for this particular tender. It should be noted that management did not withdraw from NHIF but their contract lapsed and Kemri was under no obligation to renew NHIF but to follow the Public Procurement Process of sourcing for the services,” said the statement.

On the medical insurance budget, Prof Kariuki acknowledged that the board approved only Sh115 million.

“While it is true that there is a balance pending, we are having some challenges with the contract administration of our medical cover therefore the cover has been suspended by Madison Insurance until we resolve these challenges. The matter is also being looked into at other levels and we anticipate an amicable resolution,” says Prof Kariuki.

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