Abuja—In a landmark move, the National Health Insurance Authority (NHIA) has announced significant increases in two primary payment mechanisms for healthcare providers—capitation and fee-for-service payments—the first major adjustment in over a decade.

The announcement was made by NHIA Director General, Dr. Kelechi Ohiri, during a stakeholders’ meeting with Health Maintenance Organizations (HMOs) and healthcare providers in Abuja on February 3, 2025. The adjustments, approved by the Honorable Minister of Health and Social Welfare, Prof. Muhammad Ali Pate, will take effect in April 2025.

New Rates and Rationale

• Capitation payments, which provide fixed annual payments to healthcare providers per enrolled patient, have increased by 93% compared to December 2023 rates.
• Fee-for-service payments, which reimburse providers for specific medical procedures and services, have surged by 378%—the largest increase in NHIA’s history.

These adjustments follow an interim increase six months ago when capitation fees rose by 60% and fee-for-service payments by 40% to mitigate rising costs while awaiting an actuarial review.

According to Dr. Ohiri, the revised rates are backed by actuarial analysis to ensure fairness, financial sustainability, and improved service delivery. “With the increase in premiums, we expect that the quality of care for enrollees will be improved and sustained. Providers must deliver good quality care at no additional cost to enrollees, and NHIA will ensure strict enforcement,” he stated.

Impact on Healthcare and Universal Health Coverage (UHC)

The new rates aim to:

• Enhance financial support for healthcare providers amid rising medical costs.
• Incentivize quality service delivery by aligning provider compensation with market realities.
• Protect consumers by ensuring better healthcare access and reliability.

Stakeholders at the meeting—including representatives of HMOs, Healthcare Provider Associations, and the Committee of Chief Medical Directors (CMDs) of Federal Tertiary Hospitals—welcomed the reforms. They commended NHIA’s bold steps toward stabilizing the healthcare industry and driving Nigeria closer to achieving Universal Health Coverage (UHC).

The NHIA reaffirmed its commitment to monitoring implementation and ensuring that healthcare providers comply with the new structure. These changes, the authority emphasized, are part of broader efforts to strengthen Nigeria’s healthcare system and improve national health outcomes.