The National Health Insurance Authority (NHIA) has announced a significant upward review of healthcare provider payments, increasing capitation fees by 93% and fee-for-service rates by 378%, effective April 2025.
In a capitation model, healthcare providers get a fixed payment per patient each year, no matter how much care the patient needs, while in the fee-for-service model, providers are paid for each service or treatment they give.
The Director General of the National Health Insurance Authority (NHIA), Dr. Kelechi Ohiri, announced a significant increase in healthcare provider payments at a stakeholders’ meeting with HMOs and healthcare providers in Abuja on Monday.
According to him, for the first time in over a decade, the NHIA has raised two key payment mechanisms—capitation and fee-for-service payments.
“This adjustment follows an initial increase made six months ago: a 60% increase in capitation fees and a 40% increase in fee-for-service payments,” he stated.
He explained that the increase was introduced as a temporary measure to stabilize the industry and manage rising costs while awaiting a full actuarial review to establish sustainable rates.
Approval of revised rates
Ohiri disclosed that the newly approved rates, based on the findings of the completed actuarial review, have been authorized by the Honorable Minister for Health and Social Welfare, Prof. Muhammad Ali Pate. These revised rates will be implemented from April 2025.
Capitation and Fee-for-Service increases
He stated, “Under the new structure, capitation—which involves fixed annual payments to healthcare providers per enrolled patient—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.”
Ohiri added, “These adjustments not only aim to address outdated rates but also align compensation with the reality of rising medical costs and incentivize quality care.”
Backed by actuarial analysis, the revised rates are designed to ensure fairness, sustainability, and improved healthcare service delivery. “These updates also strengthen consumer protection measures, ensuring patients receive better and more reliable care,” he emphasized.
Incentivizing high-quality care for enrollees
Commenting on the development, the NHIA DG emphasized that the primary goal is to incentivize healthcare providers to deliver higher-quality services to enrollees.
He asserted that the increases reflect the commitment of the NHIA and other partners to advance the Federal Government’s vision of an enhanced healthcare system, a healthier population, and significantly improved national health outcomes.
“With the increase in premiums, we expect that the quality of care for enrollees will be improved and sustained. Providers are expected to deliver good quality care at no additional cost to enrollees, and NHIA will ensure strict enforcement,” he stated.
Guaranteeing fair compensation and mitigating medical costs
The revised tariffs aim to guarantee fair compensation, encourage providers to deliver top-quality services, and mitigate rising medical costs.
Overall, the adjustments are tailored to provide better financial support for healthcare providers, leading to improved patient care and higher industry standards.
