Federal Govt to Increase Hospital Payments for Health Insurance

The Federal Government is considering an upward review of fixed payments to hospitals for health insurance services.

Capitation payments are predetermined monthly amounts paid by health insurance companies to medical providers per enrolled patient. These payments ensure a consistent income for physicians, clinics, or hospitals.

At the Annual General Meeting of the Board of Directors of Ultimate Health, a leading Health Management Organisation, Dr. Lekan Ewenla disclosed that the review would address ongoing complaints from hospitals. The last review occurred in 2014.

Dr. Ewenla explained that the law mandates a review of capitation payments every 24 months to account for inflation and economic trends. Ewenla, the Managing Director and Chief Executive Officer of Ultimate Health, stated:

“As of now, we are in discussions with the regulatory agency leadership about a comprehensive capitation review. The previous DG, under significant pressure, increased the payment from ₦128 to ₦146 for HMOs at the secondary level. However, this is still inadequate due to rising inflation.”

He emphasized the need to adjust premiums in line with inflation to ensure hospitals can continue providing services. Initially set at ₦550 per person per month in 2005, capitation payments were last increased to ₦750 in 2014. The review, initially due in 2007, was delayed until 2014.

“Given the current exchange rate and the fact that most medications are imported, primary risk bearers like hospitals no longer benefit from the scheme,” Ewenla said.

He highlighted that health insurance relies on volume and the provision of basic healthcare services, with specific amounts allocated for these services.

Angela Ajala, Chairman of the Board of Directors, noted that Ultimate Health Services has increased its capital base from ₦400m to ₦1bn, exceeding the ₦750m minimum requirement set by the National Health Insurance Authority under the National Health Insurance Act 2022.

“We aim to expand beyond Nigeria, which necessitates a robust capital base,” Ajala said. She described the previous business year as both challenging and successful.