MEMORANDUM

To:

Supervisor Jim Beall

From:

Doug Winslow,Policy Aide

Date:

August 17, 2006

Subject:

Ability to Pay Determination(APD)Program

The “Ability to Pay Determination”(APD)program was
established by the County in 1983. In January 2004,the Board
increased eligibility to 300 percent of poverty(from 200 percent)
and changed patient financial responsibility from a percentage of
charges to nominal co-pay amounts(see attached “APD
Determination Chart”).

In 2005,61,854 VMC patients did not have any insurance. 51
percent of those patients qualified for APD(Kim Roberts’ memo
to Doug, May 10, 2006). Therefore,31,546 patients were APD
customers in 2005, which is approximately 21 percent of the
uninsured adults in Santa Clara County.

Data collected by this office and Working Partnerships USA
confirms that 76 percent of uninsured adults in the county live
below 300 percent of poverty(108,000 people). This means 29
percent of these uninsured residents were active APD customers
in 2005.

Residents living below 300 percent of poverty may still not
qualify if they have much in the way of“liquid assets.” These
assets are added up and divided by 12 to determine additional
“monthly income.”

The biggest issue with APD is that there is essentially no publicity
around the 23 year old program. On the internet it can barely be
found except for originating Board transmittals. It appears there
has been little interest in marketing this essential safety-net

program. Our office now estimates that 30,000 to 60,000

uninsured adults may qualify for APD and are either healthy,
finding health care at a non-County community clinic or have no
idea that they may qualify for this excellent APD program.
It is a shame that so many low-income County residents do not

seek care because they believe they can not afford it. They show
up in the emergency room when their condition worsens and

that’s when SCVHHS tries to determine if they qualify for
coverage (Medi-Cal, Healthy Families, APD,etc) or not.
This County does not need to find alternatives for uninsured

people who already qualify for an established program. In fact,
the Board of Supervisors did an excellent job establishing this
program and making it more patient friendly in 2004.

The APD program is truly excellent. If a resident does qualify,
they become members of the Valley Health Plan(VHP)but
without the insurance component. They receive a VHP
membership card, are assigned a primary physician and are

treated like full-fledged VHP members if every other way. Since
they are APD entries, though, they may only use VMC and County
Clinics, unlike paying VHP customers who have the broader
insurance coverage component.
An interim solution for the 150,000 uninsured adults in Santa

Clara County is to enact an “Adult Health Insurance Expansion
Project” for working uninsured and their employers to pay their
own way into the County’s health and hospital system. This could

make them VHP members (like APD)and get them coverage.
Since 26 percent of uninsured adults live above 300 percent of
poverty, the County should consider providing them an option,
too, if they have also been without health insurance for over one
year. Working Partnerships estimates that 48,000 uninsured

adults (under 300% FPL)could qualify for this plan.

Further, the County should focus on the 44,000 uninsured young
adults who are 19 to 24 years old. This is a stunning statistic,
reflecting the fact that these young people are dropping off family
plans early in their adult lives. Since this is one of the healthiest

populations, it seems the County and private providers would
want to market and sign up young people into health care plans.
These young customers may become loyal and long-time paying

customers as they get attached to their system of care. It may
help increase the ratio of sponsored customers at VMC for years
to come.

An “Adult Health Insurance Expansion Project” and marketing to
uninsured young people by the County and private providers will
help reduce the number of uninsured people and many who may
otherwise qualify for APD.

Marketing the APD program would mean a greater burden on
VMC and the General Fund, yet this could be offset by reducing
the huge number of people who are currently uninsured and
likely qualify for APD.

Currently, the County is spending approximately $104 million
each year for uninsured patients. Reducing the uninsured
population and realizing new income from an “Adult Health
Insurance Expansion Project” will help deflect the costs of caring

for new APD customers who currently have no idea that they
qualify for APD and medical care.

@ Working Uninsured
(48,000 residents 34%)

■ APD Eligible?
(30,000-60,000
additional residents)

□ 19-24 year olds

(44,000-31%)

□ Over 300% of poverty
(33,000 - 24%)

Total uninsured = 141,000 residents.

Eligible for APD (County's "Ability to Pay Determination" Program)
may be 30,000 to 60,000 residents, not currently accessing services.
(Chart based on 45,000).

62,000 uninsured visit VMC and/or clinics in one year. 51% qualify
for APD (75% of those living under Federal Poverty Line (100% FPL).

Prepared by the Office of Supervisor Jim Beall
August 2, 2006. Doug Winslow, Policy Aide.

APPENDIX A

APD DETERMINATION CHART

INCOME

PATIENT OBLIGATION

Required Copayment
Federal

Outpatient

Poverty Level

Visits

Ambulatory
Surgery

Emergency
Dept

$5 per visit

$25 per surgery

$25 per visit

0 - 100%

poverty
101 - 200%

poverty

$50 per
admission

$20 per visit

$50 per surgery

$50 per visit

poverty

201% - 300%

Inpatient

$100 per
admission

$30 per visit

$100 per
surgery

$100 per visit

$150 per
admission

Liquid assets will be included in the monthly calculation. Total liquid assets will be
divided by 12 to compute the additional monthly income.

Note: Payment is expected to be made at the time of service, if payment is not
collected at the time of service, the co-payment will be billed, with the addition of a $25
billing fee.

Liquid assets will be included in the monthly calculation. Total liquid assets will be
divided by 12 to compute the additional monthly income.

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