In a letter seen by our team dated last year 2023 exposes how Jayesh saini’s MAKL bulldozes private hospitals in remittance of insurance claims as the regulator. MAKL is responsible for settling insurance claims of these hospitals.
The letter reads:
We, the Rural Private Hospitals Association of Kenya (RUPHA), hereby submit this petition to the Competition Authority of Kenya (CAK) to bring to your attention the alleged abusive practices conducted by Medical Administrators Kenya Limited (MAKL) in contravention of the Competition Act No. 12 of 2010.
Rural Private Hospitals Association of Kenya (RUPHA) is a first-of-its-kind association, a non-political society representing privately-owned medical centers, outpatient centers, ambulatory care centers, rehabilitation centers, nursing homes, diagnostic centers, and hospitals. RUPHA provides coverage within the 47 counties in Kenya and speaks for both rural health facilities and urban hospitals and clinics serving medically underserved populations (MUPs).
According to Section 23 of the Competition Act, a dominant undertaking refers to an entity that produces, supplies, distributes, or controls a significant portion of goods or services in Kenya. We assert that MAKL Limited, by virtue of its contracts as a medical insurance scheme administrator for the National Police Service, the Kenya Prison Service, the Teachers Service Commission, Nairobi City County, and Meru County, holds a dominant position in managing medical benefits for civil servants in Kenya.
Abusive practices
We believe MAKL Limited has engaged in abusive practices that contravene Competition Act No. 12 of 2010, as outlined in Section 24 of the Act. These practices include:
Unfair Purchase Prices: MAKL Limited has imposed significantly lower fees for similar medical services or procedures compared to other private insurers in the market, directly imposing unfair purchase prices from healthcare providers.
Restriction of Market Access: MAKL Limited has deliberately limited market access or investment by healthcare providers in specific regions of the country, such as Bungoma, Migori, Kikuyu, Meru, Eldoret, Nairobi West, Kitengala West, and Nairobi, by not considering applications from providers in those areas.
Conflict of interest: We have good cause to believe that there is an ownership relationship between MAKL
Limited and the healthcare providers, namely, Bliss Medical Healthcare, Lifecare Group of Hospitals, Nairobi West Hospital, Kitengala West Hospital, and Medicross Healthcare. The aforementioned healthcare providers have a presence in the areas where MAKL is exercising restrictions to market access. An investigation will shed light on any potential anti-competitive practices that may further hinder market access for other healthcare providers.
Application of Dissimilar Conditions: MAKL Limited has applied dissimilar conditions for similar transactions against healthcare providers of equivalent categorization by the Ministry of Health, creating an uneven playing field.
Disadvantageous Contractual Terms: MAKL Limited has developed contracts for the provision of services to civil servants that place healthcare providers at a significant disadvantage. These contracts include clauses such as “Reduced Payments,” which allow MAKL Limited to unilaterally reduce payments to providers without specifying the conditions for such reductions. The contracts also restrict providers from assigning their rights and obligations to heirs or assigns, contrary to common commercial practices.
The following excerpts from the contract provided by MAKL Limited demonstrate the disadvantageous terms imposed on healthcare providers:
•Reduced Payments (Clause 20.9, 20.10, 20.11): These clauses deny avenues for redress in the event of failure to pay or reduced payments by MAKL Limited. They grant MAKL Limited the power to unilaterally reduce payments to providers without specifying the conditions for such reductions.
•Business Discounts (Clause 21): MAKL Limited routinely imposes discounts on provider statements as a precondition for settlement, taking advantage of their buyer power. These discounts are often applied without written agreement, delaying payments to providers who do not consent to such discounts.
•Non-assignment (Clause 34): The contract also restricts providers from assigning their rights and obligations to heirs or assigns, contrary to common commercial practices.
We kindly request the Competition Authority of Kenya (CAK) to:
•Initiate a thorough investigation into the alleged abusive practices conducted by MAKL Limited, particularly regarding unfair purchase prices, restriction of market access, application of dissimilar conditions, and disadvantageous contractual terms.
•Examine any potential conflicts of interest in the dealings between MAKL Limited, Bliss Medical Healthcare, Lifecare Group of Hospitals, Nairobi West Hospital, Kitengala West Hospital, and Medicross Healthcare.
•Assess the compliance of MAKL Limited with the Competition Act No. 12 of 2010, specifically focusing on the abuse of dominant position and buyer power as defined in Sections 24(1) and 24(2) of the Act.
•Take appropriate remedial action to address the abusive practices, including imposing penalties and instituting corrective measures to restore fair competition in the medical insurance scheme administration market.
Jayesh Saini
• Was the mastermind of Clinix scandal in Kenya’s healthcare history that stumbled NHIF
• Was the mastermind behind importation of Sputnik-V covid19 vaccine from Russia. Was illegal
• TSC-AON Minet scandal mastermind
Check out more information in our previous article.
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