Sendero Health Plans expects to double membership one year after facing potential dissolution

Sendero Health Plans, Central Health's nonprofit health care provider, expects to double its membership in 2020.
Sendero Health Plans, Central Health's nonprofit health care provider, expects to double its membership in 2020. Iain Oldman/Community Impact Newspaper

Sendero Health Plans, Central Health's nonprofit health care provider, expects to double its membership in 2020. Iain Oldman/Community Impact Newspaper

Wesley Durkalski, president and CEO of Sendero Health Plans, said he always had confidence the nonprofit’s long-term plan would work. At this point last year, though, local officials were looking at shutting down the health care provider altogether.

At the time, Sendero—Central Health’s nonprofit health care plan—had accumulated a $2.5 million net income loss in its fiscal year 2018-19 budget, and its enrollment had declined by more than 1,500 members from the year before, according to Sendero budget documents.

“There were definitely some hard decisions,” Durkalski told Community Impact Newspaper.

On Nov. 20, however, Durkalski told the Central Health Board of Managers—which approves the nonprofit's budget—that Sendero is expecting to double the number of local residents enrolled in its Affordable Care Act marketplace health insurance plans.

That night, Central Health approved Sendero’s budget. The numbers show the nonprofit has flipped its budget by $3 million year over year, turning a $2.6 million FY 2018-19 operating deficit into a $515,000 net income gain for the FY 2019-20 fiscal year.


It is a turnaround that seemed unlikely 12 months ago, and Sendero accomplished the feat largely because it picked up health care coverage for Travis County’s sickest uninsured residents.

“It is all part of a longer-term, bigger plan that came together,” Durkalski said. “For any nonprofit you have your mission, and it's always year-to-year, and you always go as far as you can. This year we were able to put together a good case for Central Health to keep funding us.”

SENDERO ON LIFE SUPPORT


In September 2018, the Central Health Board of Managers voted to stop offering health insurance through Sendero.

Earlier that year Central Health announced that Sendero Health Plans would no longer offer STAR Medicaid or CHIP plans, citing insufficient premiums set by the state to cover the cost of care. It was another hurdle for the nonprofit health care provider in the ever-changing landscape of providing health insurance.

“We tried this for the last five years and yet find ourselves each year trying to address these issues and saying next year we’ll do better. We’ll recoup those losses,” board member Shannon Jones said during the vote last year. “My question is, if we gave it another year, would it make a difference? That same question has been asked, and the answer has always been the same: It didn’t.”

The nonprofit was eventually saved after a community-led push forced the Central Health board to reverse its decision in a specially called meeting. Following the vote, Central Health laid out a strategic plan for Sendero in the 2018-19 fiscal year.

The plan, Durkalski said, transferred hundreds of low-income Travis County residents enrolled in Central Health’s Medical Access Plan, or MAP, to Sendero health coverage plans.

MAP is not an insurance plan, but it allows Travis County residents with incomes 100 percent below the federal poverty level or lower to receive limited health care services without paying any health care premiums.

The move accomplished two major things. Where previously Central Health paid for the health care costs of MAP patients, Sendero would now pay for their health insurance coverage—at a lower total cost for the county.

“It is far cheaper to pay for their coverage than pay for their health care,” Durkalski said.

But the strategy also tipped the scales for Sendero to begin drawing down federal funds for covering chronically sick patients. Previously, the health care provider was returning those funds.

Essentially, communities with healthier members pay into the federal risk adjustment funding pool, and communities with sicker members draw from it. Sendero, for the first time, was able to pull those federal funds.

“There was a significant amount of funding that was available to us that we had to return to the federal marketplace. ... Over the years we’ve probably given back $100 million,” Durkalski said. “Working with actuaries, we figured out a way to take those funds and direct them to the sickest people in [Travis County.]”

CARE IN COVERAGE


Durkalski considers the first year of transferring MAP recipients to Sendero health care plans to be a success, and Central Health, in turn, is sending more MAP-eligible residents to the nonprofit for coverage. In the 2019-20 fiscal year, Durkalski said Sendero will put 500 more MAP recipients on its health care plans.

For several of those residents, it will be the first time in decades they have been on a health care plan, according to Durkalski.

“There were a number of cases where people have just been uninsured. Like anybody, [they] kind of just put things off and went to the emergency room when [they] were desperate, and that was a very inefficient way to get health care,” Durkalski said.

One such patient would go to the emergency room to receive life-saving dialysis treatment every time they needed it, Durkalski said. That kind of uninsured care puts a financial strain on the county, which partially compensates hospitals and doctors for uncompensated care they provide.

“Within a few months [that patient was] plugged into dialysis,” Durkalski said.

Because the MAP recipients are now on Sendero plans, Durkalski stated the nonprofit can now connect them to regular cancer screening, vaccinations, housing solutions and other health care-related services.

LOOKING DOWN THE ROAD


Sendero is currently offering the lowest-cost Bronze plans on the ACA marketplace during open enrollment, which runs through Dec. 15, according to a Sendero news release.

The nonprofit is expecting to see its membership numbers double through those plans, Durkalski told Central Health managers Nov. 20, up to more than 20,000 enrolled members.

“The more people that are covered, the stronger the system is for everybody,” Durkalski said.

Sendero’s projected enrollment numbers are an encouraging sign for a nonprofit navigating the health care industry. Durkalski said Sendero’s actuaries reported the nonprofit is viable for at least the next three years.

“We should be sufficient to stand on our own for the foreseeable future,” Durkalski said. “Not only are we breaking even, but we’re bringing down significant [federal] funding.”
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By Iain Oldman

Iain Oldman joined Community Impact Newspaper in 2017 after spending two years in Pittsburgh, Pa., where he covered Pittsburgh City Council. His byline has appeared in PublicSource, WESA-FM and Scranton-Times Tribune. Iain worked as the reporter for Community Impact Newspaper's flagship Round Rock/Pflugerville/Hutto edition and is now working as the reporter for Northwest Austin.


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