The National Health Insurance Authority (NHIA) has for the first time in over a decade, significantly increased two key payment mechanisms for healthcare providers: capitation and fee-for-service payments.
A statement from the agency Monday evening said the organization has increased capitation fees by 93% and fee for service delivery by 378% to motivate healthcare providers and improve service delivery.
The statement said this adjustment follows an initial increase made six months ago; 60% increase in capitation fees and 40% increase in the fee-for-service payments.
It said, “This was introduced as a temporary measure to stabilize the industry and manage rising costs while awaiting a full actuarial review to establish sustainable rates.
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“The newly rates which are approved by the Honorable Minister for Health and Social Welfare, Prof. Muhammad Ali Pate, are based on the findings of the completed actuarial review, and will be implemented from April 2025.”
The Director General of the NHIA, Dr. Kelechi Ohiri announced the development at the NHIA -Health Maintenance Organization ( HMO) Standing Committee Meeting in Abuja, on February 3rd, 2025.
“Under the revised structure, capitation—fixed annual payments to health care providers per enrolled patients has increased by 93% compared to the rate in December 2023.
“Meanwhile, fee-for-service payments, which reimburse specific medical procedures and services, have risen by 378% compared to the 2023 rates,” he said.
The agency said specifically, these adjustments not only aim to address outdated rates but also to align compensation with the reality of rising medical costs, and incentive quality care.