The government has set aside KSh4 billion to settle verified pending bills owed to healthcare facilities under the defunct National Hospital Insurance Fund (NHIF), offering relief to hospitals that have faced financial strain due to delayed reimbursements.
Treasury Cabinet Secretary John Mbadi announced the allocation while presenting the 2026/27 Budget Statement in Parliament on Thursday, saying the funds will be used to clear outstanding claims that have already been verified and approved.
“The government recognizes the critical role contracted healthcare facilities play in delivering healthcare services to Kenyans. It is with this in mind that KSh4 billion was allocated in the current financial year to settle outstanding NHIF pending bills,” Mbadi said.
Hospitals to Receive Payments Before End of Financial Year
According to the Treasury CS, the allocation targets healthcare providers with claims falling within the government’s initial settlement framework, following a presidential directive aimed at addressing long-standing NHIF debts.
Mbadi noted that all claims earmarked for payment under the KSh4 billion allocation have already undergone verification and adjudication and will be settled before the close of the 2025/26 financial year.
“The claims earmarked for settlement under this allocation have been duly verified and adjudicated and will be fully paid before the close of this financial year,” he told Parliament.
The move is expected to improve cash flow for hospitals and other medical facilities that have struggled with delayed reimbursements, affecting service delivery and operational capacity.
Relief for Healthcare Facilities
For years, many hospitals have raised concerns over unpaid NHIF claims, arguing that delayed payments have strained their finances and hindered their ability to provide quality healthcare services.
The latest allocation is expected to ease pressure on affected facilities while supporting the government’s broader health sector reforms under the Social Health Authority (SHA), which replaced NHIF.
Healthcare stakeholders have consistently called for the settlement of pending bills, noting that timely reimbursements are essential for maintaining medical supplies, paying staff, and improving patient care.
Larger Claims to Be Addressed Later
While the KSh4 billion allocation will cover a portion of the outstanding obligations, Mbadi acknowledged that some claims exceed the current payment threshold.
He assured healthcare providers that the government will continue addressing larger verified claims in future budgets.
“The government will subsequently prioritize payment of the outstanding claims exceeding the KSh10 billion threshold once verified in the next budget,” Mbadi said.
Part of Wider Budget Priorities
The allocation forms part of the government’s efforts to strengthen healthcare financing and restore confidence among healthcare providers.
The 2026/27 budget also includes funding for primary healthcare services, referral hospitals, medical interns, vaccine programmes, community health promoters, and medical training institutions as part of efforts to expand access to affordable and quality healthcare across the country.
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