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Sendero misses enrollment target but breaks even

Wednesday, February 27, 2019 by Ryan Thornton

After Central Health’s board of managers gave up on Sendero Health Plans with a vote to disband the health maintenance organization on Sept. 12, 2018, a final effort to leverage more federal dollars has managed to save the nonprofit from financial collapse.

Central Health launched the Central Health Assistance Program late last year to bring chronically ill clients from Travis County’s Medical Access Program over to Sendero’s IdealCare plan. Under the Affordable Care Act policy, the additional high-risk clients would allow Central Health to receive three to four times more federal dollars for Sendero than before.

Central Health President and CEO Mike Geeslin told the Commissioners Court Tuesday morning that Sendero outreach teams sent around 700 letters, made more than 1,700 phone calls and attempted over 120 in-home visits in its aggressive effort to enroll 1,000 people with chronic health needs.

Out of that effort, Geeslin said the team scheduled 281 appointments with MAP clients to discuss the new Sendero coverage option. Nearly 80 percent of those clients chose to enroll in the new plan this year, adding 223 high-risk clients to the Sendero customer pool.

County Judge Sarah Eckhardt noted that 223 is a much smaller figure than the 500 MAP members initially targeted to significantly increase Sendero’s federal funding. She pointed out that 223 clients is only about 2 percent of Sendero’s 12,000-plus members. Though the new clients are bringing in federal reimbursements, the money is only enough for Sendero to cover its own expenses.

Eckhardt was initially supportive of the decision to dissolve Sendero based on the observation that it was never designed to operate within the ACA and has struggled to compete with newer health care providers that are able to draw from a much larger client base. In contrast, Sendero’s base is entirely composed of customers from eight Central Texas counties.

While the ACA has added three viable health care providers to the Central Texas marketplace and increased competition, Sendero President and CEO Wesley Durkalski said it has also enabled Sendero to make use of subsidies coming from more than 75,000 Austin-area residents currently enrolled in the ACA. Durkalski said Sendero is proud to “steer these funds to where they can do the most good for everybody.”

Commissioner Brigid Shea said the new plan essentially allows the county to keep a percentage of taxpayer money paid into the ACA. “It’s money we’ve already paid in that we would just be able to recoup from these reimbursements through Sendero, which we wouldn’t be eligible for at anything close to the same rate of recovering if these people who needed very expensive health care stayed with Central Health but weren’t covered under the Sendero program.”

Geeslin suggested that the reality may be more complicated than that due to other structural differences between Sendero and MAP, but that he would be able to provide a more precise financial comparison in May or June. At this point, however, he said the numbers seem promising about Sendero’s long-term viability.

As long as the ACA is in place, Durkalski added that enrollment of chronically ill clients from MAP is likely to increase next year, drawing down more reimbursements. Since the program got such a late start last year, he said the Sendero team did not have enough time to maximize enrollment.

“We definitely got a late start,” he said. “So this year we’re confident that we would start much earlier and be much more thorough, with hopefully the same success rate.”

Expressing relief at such a dramatic financial improvement just months after most had given up on Sendero, Commissioner Gerald Daugherty asked Geeslin and Durkalski, “What has kept us from doing this in years past so that we wouldn’t have had to have gone through all of the brain damage that we went through last year?”

Geeslin said being able to implement such an innovative program involved knowing how much capital would be necessary over multiple years to cover not only the company costs but also the premium assistance program. He said Central Health knew about the possibility for such a plan for many years, but did not know if there was a viable business plan to make it work.

With Geeslin and Durkalski painting an optimistic picture of the new Sendero program, Daugherty asked to hear from one of the Central Health board members who opposed the solution in September 2018. He suggested those board members may offer a different perspective on the program’s financial sustainability.

Central Health Board Member Maram Museitif addressed Daugherty’s request, saying that she maintains her opposition to the program based on her conviction that the plan is irresponsible with county tax dollars. “Some of the members of Sendero are non-Travis County residents and have not worked out the logistics, yet the Travis County health district is bearing the cost of this health program,” she said.

Geeslin countered that the new program does not change coverage for residents from other counties. “Because Sendero has a multicounty area and it winds up with the state Medicaid service areas, you have people outside of Travis County that can pay the premium and be insured under Sendero IdealCare, just like they could pay the premium and be insured under Blue Cross Blue Shield.”

Geeslin and Durkalski will return to the court for a more thorough financial update in May or June.

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