The Ministry of Health, the Council of Governors (CoG) and the Social Health Authority (SHA) have reached a major agreement aimed at resolving challenges surrounding the contracting of county-owned health facilities under the 2026–2029 HAKIKA contracting cycle. The agreement was reached on Monday, October 5, 2026, during a consultative meeting held at Afya House in Nairobi and chaired by Health Cabinet Secretary Aden Duale and the CoG Health Committee Chairperson, Mombasa Governor Abdulswamad Shariff Nassir. The meeting brought together the national government, county governments, SHA, the Digital Health Agency and health-sector regulatory agencies to address concerns raised by counties over the new contracting arrangements. 

The discussions come at a critical time as Kenya continues implementing the new health financing system under SHA, which replaced the National Health Insurance Fund. County governments operate thousands of public health facilities that provide services to millions of Kenyans, making their participation in SHA central to the success of the government's Universal Health Coverage agenda.

New SHA contracting framework agreed

One of the major outcomes of the meeting was agreement on a new modular contracting system for county health facilities. Under the arrangement, healthcare providers will first sign the Master General Terms and Conditions before entering into separate contracts covering specific SHA funds and services.

The funds covered under the new arrangement include the Primary Healthcare Fund, Social Health Insurance Fund, Emergency, Chronic and Critical Illness Fund and the Public Officers Medical Scheme Fund. 

The parties also clarified that individual county health facilities will retain their own contracts with SHA. County governments will be recognised as contracting parties, while County Executive Committee Members for Health will coordinate the process. The contracts will also be reviewed and cleared by respective County Attorneys before they are executed. 

This clarification is significant because counties had raised concerns about how their facilities would be contracted and how responsibilities would be shared between county administrations and SHA.

Existing contracts extended to October 14

Another important decision was the extension of existing SHA contracts until October 14, 2026.

The extension is intended to prevent interruptions in healthcare services while county facilities complete the new contracting process. However, Duale and the CoG Health Committee have made it clear that the October 14 deadline will not be extended further. 

This means county health facilities have a limited period to complete the necessary requirements and secure their new contracts.

To help counties meet the deadline, SHA will establish HAKIKA contracting clinics across the country. These clinics will assist health facilities with documentation and other technical requirements. SHA will also provide weekly progress reports to the Council of Governors until eligible facilities have completed the contracting process. 

A Joint Technical Committee comprising representatives from SHA, the Council of Governors and county health departments will also coordinate implementation and deal with technical and operational challenges that may arise.

Counties get relief over documentation requirements

The meeting also addressed one of the major challenges that counties had raised — the documentation required before facilities could be contracted by SHA.

Under the new arrangement, SHA will accept certain documents held at county level instead of requiring every facility to obtain separate copies of documents already available through county governments.

These include documents relating to the legal status and ownership of facilities, tax compliance, NSSF compliance and data protection. County governments will also be allowed to provide relevant certificates covering facilities under their jurisdiction. 

Facilities that have met the other requirements but are missing some documents will receive a 30-day compliance window to obtain documents such as NSSF compliance certificates, NEMA licences, fire-safety certificates, National Council for Persons with Disabilities compliance certificates and Office of the Data Protection Commissioner certificates. 

However, the relaxation does not mean health facilities will be allowed to operate without the necessary professional licences.

Licensing and patient safety remain mandatory

The Ministry of Health and governors emphasised that regulatory compliance and patient safety must remain a priority.

Level 4 and Level 5 hospitals will still be required to have valid licences for laboratory, pharmacy and imaging services. Facilities will only be contracted for services for which they have the appropriate certification.

The arrangement therefore attempts to balance two competing priorities: ensuring county hospitals are quickly brought into the SHA system while also protecting patients by ensuring facilities meet professional and regulatory standards.

New agreement on payment of SHA claims

Payment of claims was another major issue discussed during the meeting.

The national government, counties and SHA agreed that clean claims submitted by health facilities should be settled within 90 days of receipt. Claims are also expected to be processed in the order in which they are received. 

This is particularly important because delayed payments to hospitals have been a major concern in the implementation of SHA. Healthcare facilities depend on reimbursements to purchase medicines, pay suppliers, maintain equipment and continue providing services.

Under the agreement, if there is a funding shortfall, affected facilities should be notified within seven days. Unpaid clean claims will then be recognised as certified liabilities and carried forward for settlement, subject to the availability of appropriated funds. 

The objective is to provide greater predictability to public health facilities and reduce uncertainty over SHA reimbursements.

Payments to go directly to facility accounts

The agreement further provides that payments will continue to be channelled directly into the designated Facility Improvement Financing accounts of individual health facilities.

This is intended to support the ability of hospitals and other public facilities to manage resources required for day-to-day operations and improvement of healthcare services.

The arrangement is also linked to Kenya's broader reforms under the Facility Improvement Financing Act, which seeks to strengthen the management and utilisation of revenues generated by public health facilities.

Digital health also discussed

The meeting was not limited to contracting and payments. The officials also discussed digital health, data protection and the security of county health information.

The Council of Governors committed to supporting Level 5 hospitals to complete their transition to the Health Management Information System by October 30, 2026. The Digital Health Agency was also involved in discussions concerning the digital systems required to support the new health financing framework. 

The digitalisation of healthcare is considered important for improving the registration of patients, processing claims, monitoring healthcare utilisation and reducing fraud.

It also allows the government to have better information on services being offered in public facilities and the resources being spent on healthcare.

Why the meeting is important

The meeting between Duale and the CoG Health Committee highlights the importance of cooperation between the national and county governments in implementing SHA.

Health services are largely devolved, meaning counties play a central role in running public health facilities. At the same time, SHA is a national health financing institution. The success of the system therefore depends heavily on the two levels of government working together.

Previous engagements between Duale and governors have also focused on SHA payments, Universal Health Coverage workers, digitalisation and the broader implementation of health reforms. In April 2025, for example, the Ministry of Health and the CoG Health Committee agreed on measures including increased attention to emergency, chronic and critical illness cases and training of health facility managers on SHA registration and system use. 

In September 2025, another engagement between the Ministry of Health and CoG focused on SHA reimbursements, with a governors' dashboard proposed to help track claims and improve accountability. 

The latest agreement therefore represents another attempt to address implementation challenges through direct consultations between the national government and counties.

Impact on ordinary Kenyans

For patients, the most important issue is continuity of healthcare services.

The extension of existing contracts to October 14 is designed to ensure that patients do not suddenly lose access to SHA-supported services because facilities have not completed the new contracting process.

The new framework could also help reduce administrative delays by allowing counties to provide documents already held at county level. At the same time, the commitment to process clean claims within 90 days could improve the financial position of health facilities if implemented effectively.

The government and governors have also committed themselves to ensuring that eligible county facilities are contracted, paid on time and able to continue serving SHA beneficiaries. 

Next steps

SHA is expected to intensify the contracting process through HAKIKA clinics in counties. The Joint Technical Committee will monitor implementation and help address problems affecting facilities.

SHA is also scheduled to engage County Executive Committee Members for Health to strengthen coordination and accelerate the implementation of the new contracting framework. 

The October 14 deadline will be closely watched because the parties have indicated that existing contracts will not receive another extension.