Gov’t Announces New SHA Contracting Rules for County Health Facilities

The Ministry of Health and the Council of Governors have agreed on new measures governing the contracting of county health facilities by the Social Health Authority (SHA) for the 2026-2029 period.

In a statement on Monday, October 5, the ministry said the resolutions were reached during a consultative meeting at Afya House in Nairobi. 

The meeting brought together the Ministry of Health, Council of Governors, SHA, Digital Health Agency (DHA), Kenya Medical Practitioners and Dentists Council (KMPDC), Clinical Officers Council (COC), Pharmacy and Poisons Board (PPB), National Cancer Institute (NCI), Kenya Medical Laboratory Technicians and Technologists Board (KMLTTB) and Kenya Nuclear Regulatory Authority (KENRA).

The meeting considered concerns and recommendations raised by the Council of Governors regarding SHA facility contracts for public health facilities.

"The meeting considered the concerns and recommendations of the Council on the SHA facility contracts for public health facilities, set out in the Council’s letter of 28th September 2026," the statement read.

The Ministry of Health and the Council of Governors said the discussions resulted in consensus on how county facilities would be contracted, while reaffirming the constitutional framework governing relations between the national and county governments.

"Following frank and constructive deliberations, we jointly reaffirm that county health services are a devolved function, that our two levels of government conduct their relations through consultation and cooperation as Article 6(2) of the Constitution requires, and our shared aim that every eligible county health facility is contracted, paid on time and able to serve SHA beneficiaries without interruption," the statement added.

According to the ministry, under the agreed 2026-2029 contracting framework, the SHA contract will be modular, with every provider required to execute the Master General Terms and Conditions under Part A and a separate Fund Contract for each fund from which its services are purchased.

The funds covered are the Primary Healthcare Fund under Part B1, the Social Health Insurance Fund under Part B2, the Emergency, Chronic and Critical Illness Fund under Part B3 and the Public Officers Medical Scheme Fund under Part B4. 

For example, a county dispensary at Kenya Essential Package for Health Level 2 will execute Part A and Part B1 only.

The government also clarified that each county health facility will retain its own contract. Payments for each facility will continue to be made into its own Facility Improvement Financing account.

The contract will recognise a county government entity as a contracting party, while a county facility admitted to the funds will warrant that it has the authority of the County Executive Committee Member for Health.

County Executive Committee Members for Health will coordinate the contracting process and ensure that their respective County Attorneys review and clear the contracts before execution.

SHA will also accept certain documents held at county level when contracting county facilities. 

These include documents establishing a facility, gazettement or other evidence of county ownership, together with the facility's KMPDC licence and registration in the Kenya Master Health Facility List.

For tax compliance, counties will be allowed to submit their KRA PIN and tax compliance certificate alongside a county letter confirming the facilities covered, including facilities operating as sub-accounts under the county PIN. 

Facilities with their own tax registration will be required to submit their own documents.

County NSSF compliance certificates will also be accepted where staff at the facility are employed and paid by the county government. 

Similarly, counties can use their Office of the Data Protection Commissioner registration certificate as Data Controller and Data Processor, provided it lists the facilities covered.

For audited financial statements, the latest audited statements will be required for Level 4 and 5 facilities. The latest audited county financial statements will apply to Level 2, Level 3 and specific Level 4 facilities that have never been audited.

Each county facility will also be required to have an official email account on a facility-specific sub-domain of the county's domain. 

Where a county does not have a registered domain, the Digital Health Agency will facilitate the acquisition of the required sub-domains before October 14, 2026.

County-approved fee schedules will serve as facility price lists. Where a County Assembly changes fees, the county will notify SHA upon enactment and provide the effective date. Services covered by SHA will be paid at SHA tariffs or negotiated rates.

On claims, SHA will pay for services that have been properly delivered and validly claimed. The resolutions state that a valid claim may be deferred but will not be extinguished.

Clean claims are expected to be paid within 90 days of receipt and in the order in which they are received. SHA will also be required to notify a facility if payment will not be made by the 14th of the month.

Where a fund is short of resources, every affected facility will be notified within seven days. Each unpaid clean claim will then become a certified liability and be carried forward as the first charge on the next appropriation, with settlement required within the same financial year.

The parties also noted that payments are made within funds appropriated by Parliament and that the Social Health Insurance Regulations, 2024 do not allow interest to be paid on claims.

The current contracts have been extended to October 14, 2026, to allow services and claims to continue as facilities complete the new contracting process. However, the Ministry and counties said the 2026–2029 framework will not be deferred and there will be no further extension.

A 30-day compliance moratorium will apply to five documents: the NSSF compliance certificate, NEMA licence, fire safety compliance certificate, NCPWD compliance certificate and ODPC certificate.

A county facility that meets all other requirements will therefore be contracted conditionally and given 30 days to submit the outstanding documents. The moratorium, however, only defers submission of the documents and does not remove the underlying statutory obligations.

Laboratory, pharmacy and imaging licences from KMLTTB, PPB and KNRA will remain mandatory for Level 4 and 5 facilities where applicable. Facilities without one of the licences may still be contracted for services they are licensed to provide.

The parties further clarified that provisions relating to the Health Products and Technologies Cooperation Agreement and the National Equipment Service Project will apply only where relevant to individual facilities.

The Public Officers Medical Scheme Fund will also have a dedicated service desk at county facilities contracted under the fund. The desk must be clearly identified and staffed by personnel trained in the scheme's rules, who may be drawn from existing facility staff.

A Joint Technical Committee comprising SHA, the Council of Governors and County Health Departments will oversee implementation of the contracting requirements and address emerging issues.

SHA will also hold a dedicated meeting with County Executive Committee Members for Health on October 6, 2026, following a request by the Council Secretariat.

In addition, SHA will run HAKIKA contracting clinics in every county from October 5 to October 14 to assist facilities in completing their applications.

SHA will provide the Council of Governors with weekly county-by-county reports on the contracting status of county facilities until every eligible facility has been contracted.

The Council of Governors will also support every Level 5 hospital to complete its transition to the Health Management Information System (HMIS) by October 30, 2026.

The Ministry of Health and the Council of Governors said they will continue monitoring implementation of the resolutions and addressing outstanding issues through consultation and cooperation.

"The Cabinet Secretary for Health and the Council of Governors shall jointly review progress on these resolutions before 14th October 2026 and shall continue to resolve any further issues on the contracting of county facilities through consultation and cooperation," the statement concluded.