NHIS: HMOs, Banks, In Web Of Scams


The ministerial panel investigating the suspended Executive Secretary of the National Health Insurance Scheme (NHIS), Professor Usman Yusuf, over sundry allegations is shocked at the level of financial malfeasance and irregularities involving some banks and Health Management Organisations (HMOs) from 2013 to early part of 2016. ALIJO SYLVESTER reports on the endemic decay wrecking the Scheme, with additional report from MUSA SIMON REEF.

The National Health Insurance Scheme (NHIS) has been in the news for the wrong reasons. With the suspension of the Executive Secretary of the Scheme, Professor Usman Yusuf, the fight for the soul of the agency, according to a source, has just commenced and assuming a dangerous dimension. This magazine was told that startling discoveries based on financial improprieties perpetuated by some Health Management Organisations (HMOs) in connivance with some banks, has unnerved members of the ministerial committee appointed by the Health Minister, Professor Isaac Adewole, to probe allegations preferred against the suspended boss of the scheme.
Aware that public opinion is tilting against him, no thanks to his storm of opposition against his suspension, the embattled Yusuf is up in arms and determined to expose the rot that is threatening to end his short reign as boss of the agency. Buoyed by the support of some members of the National Assembly, especially the House Committee on Health that is being rumoured to have been financially induced and propelled to assume authority over what is clearly outside their schedule of responsibilities, the beleaguered NHIS boss is leaving no stone unturned to expose and sink the boat of corruption as symbolised by the underhand dealings of forces fighting to entrench corruption at the NHIS.

Three Years Of Unbridled Corruption
While Forefront can confirm that the embattled Prof Yusuf, who earlier boasted that his boss cannot suspend him, appeared before the panel setup by the minister to investigate allegations of misappropriation, contracts splitting and lack of adherence to due process against him. This is just as it was gathered that the egoistic oncologist was indeed at the venue of the committee’s sitting where he kept members spell-bound for several hours on the vicious forces of rot he had fought since his appointment in July 2016. Yusuf, according to one of the sources, told the panel members that he was a victim of the forces of corruption plotting to undermine his efforts of sinking the boat of corruption in the NHIS.
According to Yusuf’s submission, the NHIS operations are fraught with “unapproved, unauthorized, unbudgeted and illegal payment of N1.05 billion to Health Maintenance Organizations (HMOs) under the guise of arrears as reported by the 2015 Auditor General of the Federation’s report.”
Despite the constant payment of capitation fees that was usually three months in advance, the HMOs were engaged in deliberate nonpayment of health facilities of various sums of monies, amounting to over N3 billion as at August 31, 2015. The consequence of the piled up debts by the HMOs is shabby treatment of enrollees by hospitals, who turn away patients on the roll call of the scheme over backlog of payments owed.
According to the submission, “As at 31st March 2015, more than 70% of HMOs have blatantly and deliberately refused to pay hospitals that render services to enrollees the sum of N2,442,891,628.95 (Two Billion, Four Hundred and Forty Two Million, Eight Hundred and Ninety One Thousand, Six Hundred and Twenty Eight Naira, Ninety Five kobo), as capitation fees, while the sum of N298,334,233.01 (Two Hundred and Ninety Eight Million, Three Hundred and Thirty Four Thousand, Two Hundred and Thirty Three Naira, one kobo), is fee for service in 19 northern states of the federation.
“For health facilities operating in 17 states of the South, the HMOs is indebted to them to the tune of N318, 428, 275. 75 (Three and Eighteen Million, Four Hundred and twenty Eight Thousand, Two Hundred and Seventy Five Naira, Seventy Five kobo) for capitation fees, while the sum of N49,936,529.29 (Forty Nine Million, Nine Hundred and Thirty Six Thousand, Five Hundred and Twenty Nine Naira, Twenty Nine kobo) as fee for services”.
Insiders confirmed to this magazine that the attitude of the HMOs regarding the payment of capitation and fee for service has always been a cause for worry. Apart from delaying payment to the hospitals, they lodged capitation monies on fixed deposits to accrue interest at the risk of ruining the health of their enrollees.
“Due to this practice of delaying funds to the health facilities, it is not uncommon to see enrollees subjected to all forms of shabby treatment over non-payment of the appropriate fees to health facilities. That is the reason why there is always criticisms trailing the operations of the scheme,” a top source privy to the operations of the healthcare scheme confided in our correspondents.

Money Guzzling HMOs
Despite the role envisaged by the scheme as to what the HMOs should play in promoting healthcare insurance outside Nigeria’s public service, the prospects of expanding the frontiers of the sector has not been the focal point of the HMOs.
“That is the reason why despite so many years of existence, the HMOs have not expanded the enrollees beyond two percent of the nation’s population. They seem content in collecting billions of Naira every three months ahead and placing them in fixed deposits, living large as a result of sudden wealth and not giving a care to what happens to the health of Nigerians on the scheme.
“To make matters worse, previous managements of the scheme have not been able to really regulate the activities of HMOs because they are owned by powerful people. Beyond that, some top members of the management are alleged to be in bed with some of the HMOs and therefore looked the other way at the slightest infraction of rules governing the operations of the scheme.
“One would have hoped that by now, the enrollee figures should have hit 20 million, but we have less than two million covered by the NHIS. The HMOs are supposed to market the insurance scheme and broaden the scope of coverage to achieve universal health care goals,” said a source.
However, the HMOs, through their platform, Heath and Managed Care Association of Nigeria (HMCAN), are not ignorant of the allegations against them with regards to their operations and backhand dealings.
In a letter to Acting President, Prof Yemi Osinbajo, dated May 12, 2017, they pleaded with the Federal Government to probe all allegations against their members as alleged by Prof Yusuf. They further pleaded with the government to deal with erring members found in the habit of violating the rules of engagement as spelt out by the NHIS Act.

HMOs Paid N60bn, But Still Owe N3bn To Hospitals
Before his suspension, Prof Yusuf had insisted that no less than N60 billion has been spent as capitation fees, excluding fees for services. In spite of improving service delivery and operations of the scheme, complaints and outcries have trailed these whopping payments, leading to a declining faith in the capacity of the Scheme to provide for the healthcare needs of enrollees.
“Despite the fact that HMOs have been collecting billions of Naira three months in advance as capitation fees throughout 2015 and 2016, a verification exercise conducted in March 2017 showed that HMOs owe hospitals N3, 109, 590, 667, 00 (Three Billion, One Hundred and Nine Million, Five Hundred and Ninety Thousand, Six Hundred and Sixty Seven Naira) due to hospitals, excluding fees for service charges,” Yusuf was quoted as telling the panel.

Spilling The Beans On Banks
Before the introduction of the Treasury Single Account (TSA) policy, the management of public funds was always deployed to the pecuniary interest of agencies’ chief executives. In some cases, former top government officials were also involved, ostensibly on the orders of the presidency. So, it was common to hear of billions of naira being lodged in fixed deposits.
With the commencement of the TSA, the scam involved in the management and deposits of public funds simply frittered away. The delay in the commencement of the TSA was hinged on the subterranean opposition by some commercial banks that saw the TSA policy as detrimental to the old way of corruption.
The web of scams was not only restricted to HMOs, as reliable sources revealed to our correspondents that banks were not left out of the alleged fraud. The directive by the Federal Government on all ministries and parastatals to transfer all public funds to the Central Bank of Nigeria TSA account was flouted by some banks.
This magazine sighted several correspondences between the Scheme and some of these banks. For instance, Guaranty Trust Bank Plc wrote to confirm to the NHIS that it had refunded the sum of N10 billion to government account, but when the verification committee set up by the Scheme went to work, it was discovered that GTB merely moved the money into the Federal Government Consolidated Revenue (CSR) account.
“The implication is that only the Federal Executive Council on the order of the President can reverse it. Efforts by the suspended NHIS boss to have the wrong refund by GTB reversed were unsuccessful, as he was informed by officials of the Accountant General of the Federal office that it was only the President that could reverse the lodgment into NHIS TSA account,” disclosed a source knowledgeable on the matter.

Another bank, Aso Savings, was also identified as one of the banks yet to refund the sum of N3 billion to the NHIS TSA account.
“Throughout the duration of Mr. Femi Akingbade as Acting Executive Secretary, he was engaged in ensuring the refund of money by Aso Savings. Despite all these efforts, nothing came out of it. He wrote to Vice President Yemi Osinbajo requesting for intervention. Up till this time, the money is still unpaid,” the source said.
Heritage Bank Plc is yet another financial institution that is yet to refund the sum of N10 billion to the NHIS TSA account. According to correspondences shown to Forefront, Heritage Bank had earlier maintained that it refunded the sum of N10 billion domiciled with it, but after series of verification and reconciliation, it was discovered that the money was never paid.
“Heritage Bank later agreed that it never refunded the money. Several threats and ultimatum were issued to the bank by Akingbade, who later resorted to writing the presidency for intervention but nothing happened.
“At a time, Akingbade was almost frustrated trying to ensure the money was refunded. That was the situation with Heritage bank when Professor Yusuf was appointed in July 2016. Instead of insisting outright refund of the N10 billion, Yusuf was said to have ordered that the money be paid in installmentally over a 6-month period,” revealed the source.
As it is, the payments by both Aso Savings and Heritage Bank are still outstanding. While the Scheme continues to hope that the money will be refunded, these banks are yet to comply with the government’s directive that ordered that all government funds in commercial banks be transferred to the TSA accounts of such ministries, parastatal and agencies of government domiciled with the CBN.
Before the commencement of the TSA policy that transferred the management of public funds from commercial banks to the TSA, a former Executive Secretary of the Scheme was caught with the sum of $2.1 million dollars. The Economic and Financial Crimes Commission (EFCC) had waded into the matter, but powerful interest, according to officials privy to the matter, stalled the outcome of the findings.
“The sum of N10.085 billion of NHIS money with a bank (name and account number withheld) is still being held by the bank more than 14 months after the commencement of the TSA. This is in spite of a written undertaking by the bank to transfer the money to TSA which they have failed to do severally.
“Up to April 2017, the sum of N11.297 billion is being withheld by another bank (name and account withheld). The money was neither transferred to TSA nor accessible to the NHIS
“On 25th June 2013, no fewer than 10 deposits running into N13. 7 billion were made into another bank (names withheld.) All these have been tendered by Prof Yusuf, including a catalogue of financial irregularities perpetrated by the two previous Chief Executives of the NHIS in 2013, 2014, 2015 and first half of 2016 in collusion with 13 commercial Banks”, disclosed a source close to the suspended boss of the NHIS.

Financial Misdeeds of Past NHIS Bosses
Since his appointment as NHIS boss, Yusuf had always expressed consternation at the level of graft and corruption in the Scheme. Apart from vowing before members of the National Assembly that he was determined to crumble the boat of corruption as displayed by happenings in the agency, he has been quoted to have told whoever cares to listen that his travail is hinged on his irrevocable commitment to ensuring transparency in all dealings involving the Health Insurance Scheme.
In addressing the alarming fraud that has become synonymous to the Scheme, the axed Executive Secretary has also alleged that past heads of the Scheme were engaged in the promotion of graft through using funds lodged in banks to fleece the agency.
Recalling instances of the financial improprieties, Yusuf was quoted as saying, “On 22nd December 2014 vide memo no NHIS/CMD/ 12/ vol Vii page 985, the sum of N193.3 billion was placed in fixed deposit in one day with eleven (11) commercial banks at 2% interest rate at a time when CBN prevailing interest rate was 9.2%.
“Undeveloped land adjacent to NHIS head office at Utako, Abuja, was purchased for N990 million (N90 million Agency) vide voucher no NHIS/ ADM/ 002/2015 dated 12/01/2015 when the amount budgeted in the 2015 NHIS budget was N500 million.
“There was neither Ministerial nor Federal Executive Council approval for the purchase. All the decisions were approved by the management committee who are unauthorized for that volume of expenditure. ICPC interim report dated 15th November, 2015 with reference No ICPC/P/NC557/2015 captured the scenario aptly.”

Did Yusuf Come To Equity With Clean Hands?
As Yusuf reeled out the corruption status of an agency he was heading before his suspension, the need to beam the searchlight on some of the mentioned banks and HMOs has become imperative. Much as the committee is interested in getting to the roots of the problem, was Yusuf able to exculpate himself of blame from the allegations preferred against him?
The case against Yusuf, this magazine gathered, is watertight as there were approvals that were far beyond his limit and other misdemeanors that were clearly not in line with the statute setting up the Scheme just like other Federal agencies. Surprisingly, this was part of the allegations Yusuf collated against some of his predecessors, but when it came to his own approvals, he threw caution to the wind and acted as if he was a sole administrator or a proprietor running a one-man business. For instance, the employment of no fewer than 15 people, 14 out of which were on the management cadre that he engaged under the cover of secondment is yet another hard nut to crack. The affected staff had to be sacked through ministerial intervention after series of petitions by staff Unions.
The purchase of a jeep at the cost of N48 million without reference to a ministerial tender board cannot be defended if the strict rules are to be followed. In coming to equity, Yusuf did not come with clean hands as he clearly has issues bordering on corruption charges, especially on over N800 million worth of contracts he awarded without reference to ministerial tenders Board or in the least, his management which he did not believe exist.

NASS: Allegations Over Bribery
As the ministerial panel continues to dig deep into the rot that has trailed the sordid affairs of the agency, the rumour mill are agog that certain forces might have moved in with cash amounting to N250 million to influence some members of the National Assembly to swing support in favour of the embattled NHIS boss. While this magazine could not confirm the veracity of the allegations, a source revealed that the battle over the agency has assumed ethnic divide, with a cabal alleged to be sympathetic to the interest of the HMOs that are predominantly owned by some powerful Nigerians.
Forefront was reliably informed that there has been no love lost between Prof Yusuf and members of the National Assembly, especially members of the upper chamber. This magazine confirmed that Yusuf once walked out a senator from his office, insisting that he would not be coerced or intimidated.
A close source to the embattled NHIS boss confided in this magazine the type of persons Yusuf was while he headed the Scheme, “He came to fight corruption, but he fell short of expectations. If he accused others of corruption, why was he so involved in flouting the procedural rules? You do not refer to the corruption of others as a defence when called upon to give an account of your stewardship.
“By the track record he set at the NHIS, he was a corrupt and arrogant person, who could deceive people on the surface with his strong rhetoric of fighting graft. He was taking advantage of his alleged close ties with President Muhammadu Buhari to violate Public Service rules as he is known to have boasted severally before members of staff that he had a mandate from the president and therefore not answerable to a minister.
An official, who is privy to happenings at the NHIS told Forefront that; “The panel investigating him has unearthed so many things that will shock Nigerians. Despite his closeness to some powers that be, I can assure you that he would not get away with it. It would be difficult for him to return as Executive Secretary if the findings of the panel are anything to go by.”

What Next After Panel?
There is no doubt that the outcome of the panel’s sitting would certainly bring out the need to review the NHIS Act, especially as i t relates to the roles of HMOs and strengthening of the regulatory framework of the Scheme. Will the indicted HMOs allegedly owned by some powerful Nigerians survive the damning exposition of Yusuf? Will the suspended boss of the Scheme survive the panel’s findings to return and sink the boat of corruption?
Only time will determine where the pendulum will swing to.

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