[Federal Register Volume 69, Number 200 (Monday, October 18, 2004)]
[Notices]
[Pages 61388-61393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23251]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Privacy Act of 1974; Report of Modified or Altered System

AGENCY: Department of Health and Human Services (HHS) Centers for 
Medicare & Medicaid Services (CMS)(formerly the Health Care Financing 
Administration).

ACTION: Notice of Modified or Altered System of Records (SOR).

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, we are proposing to modify or alter an SOR, ``Group Health Plan 
System,'' System No. 09-70-4001. We propose to broaden the scope of 
this system with the redesign of the electronic processing procedure 
used to process data currently from a Common Object Business Oriented 
Language (commonly referred to as COBOL) format resident on the CMS 
mainframe to Data Base 2 format (commonly known as DB2). To more 
accurately reflect the changes proposed for this system, we will modify 
the name to read: ``Medicare Managed Care System (MMCS).'' We propose 
to delete published routine use number 5 authorizing disclosures to 
contractors; published routine use number 6 authorizing disclosures to 
contractors; and published routine use number 7 authorizing disclosures 
to a Medicaid State Agency.
    Proposed routine use number 1 for contractors and consultants makes 
material changes to published routine uses numbers 5 and 6. Routine 
uses 5 and 6 authorized release to contractors. They are being deleted 
because their meaning is unclear as to what data is being disclosed to 
what entity. Routine use number 7 is being deleted because disclosure 
to a State Medicaid Agency will now be made under proposed routine use 
number 2 that reads, ``to another Federal and/or state agency, agency 
of a state government, an agency established by state law, or its 
fiscal agent.''
    CMS proposes to add new routine uses to permit release of 
information to: (1) Third parties where the contact has information 
relating to the individual's capacity to manage his or her own affairs; 
(2) other insurers, third party administrators (TPA), employers, self-
insurers, managed care organizations, other supplemental insurers, non-
coordinating insurers, multiple employer trusts, group health plans 
(i.e., health maintenance organizations (HMOs) or a competitive medical 
plan (CMP) with a Medicare contract, or a Medicare-approved health care 
prepayment plan (HCPP)), directly or through a contractor, and other 
groups providing protection for their enrollees to assist in the 
processing of individual insurance claims; and (3 & 4) combat fraud and 
abuse in certain health benefits programs.
    The security classification previously reported as ``None'' will be 
modified to reflect that the data in this system are considered to be 
``Level Three Privacy Act Sensitive.'' We are modifying the language in 
the remaining routine uses to provide clarity and uniformity to CMS's 
intention to disclose individual-specific information contained in this 
system. The routine uses will then be prioritized and reordered 
according to their proposed usage. We will also take the opportunity to 
update any sections of the system that were affected by the recent 
reorganization and to update language in the administrative sections to 
correspond with language used in other CMS SORs.
    The primary purpose of the SOR is to maintain a master file of 
Medicare Managed Care Organizations (MCO) plan members for accounting 
and payment control; expedite the exchange of data with MCOs; and 
control the posting of pro-rata amounts to the Part B deductible of 
currently enrolled MCO members. MMCS include the following entities: 
Health Maintenance Organizations (HMO), Competitive Medical Plans 
(CMP), Health Care Prepayment Plan (HCPP), and Medicare Choice 
Organizations (MCO). Information in this system will also be disclosed 
to: (1) Support regulatory, reimbursement, and policy functions 
performed within the Agency or by a contractor or consultant, (2) 
support another Federal and/or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent; 
(3) provider and suppliers of service directly or dealing through 
contractors, fiscal intermediaries (FI) or carriers for administration 
of Title XVIII; (4) provide information to third party contacts in 
situations where the contact has information relating to the 
individual's capacity to manage his or her affairs; (5) other insurers, 
third party administrators (TPA), and other groups providing protection 
for their enrollees to assist in the processing of individual insurance 
claims (6) facilitate research on the quality and effectiveness of care 
provided, as well as payment-related projects, (7) support constituent 
requests made to a congressional representative, (8) support litigation 
involving the Agency, and (9 & 10) combat fraud and abuse in certain 
health benefits programs.

DATES: CMS filed a modified or altered system report with the Chair of 
the House Committee on Government Reform and Oversight, the Chair of 
the Senate Committee on Governmental Affairs, and the Administrator, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB) on August 19, 2004. To ensure that all parties have 
adequate time in which to comment, the modified or altered SOR, 
including routine uses, will become effective 40 days from the 
publication of the notice, or from the date it was submitted to OMB and 
the Congress, whichever is later, unless CMS receives comments that 
require alterations to this notice.

ADDRESSES: The public should address comments to: Director, Division of 
Privacy Compliance Data Development (DPCDD), CMS, Room N2-04-27, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850. Comments received 
will be available for review at this location, by appointment, during 
regular business hours, Monday through Friday from 9 a.m.-3 p.m., 
Eastern daylight time.

FOR FURTHER INFORMATION CONTACT: Laquia Marks, Information Technology 
Specialist, Division of Managed Care Systems, Informational Services 
Modernization Group, OIS, CMS, Room N3-16-24, 7500 Security Boulevard, 
Baltimore, Maryland 21244-1850. The telephone number is 410-786-3312.

SUPPLEMENTARY INFORMATION:

I. Description of the Modified System

A. Statutory and Regulatory Basis for the SOR

    In 1987, CMS established an SOR, Group Health Plan System,'' System 
No. 09-70-4001, under the authority of Sec. Sec.  1833(a)(1)(A), 1866, 
and 1876 of Title XVIII of the Social Security Act (the Act) (42 U.S.C. 
1395 (a)(1)(A), 1395cc, and 1395mm). Notice of this system,

[[Page 61389]]

was published at 52 FR 13525 (Apr. 23, 1987) and a routine use for 
Medicaid state agencies added at 57 FR 60819 (Dec. 22, 1992). This 
information includes names and health insurance claims numbers of 
recipients of Medicare Hospital Insurance (Part A) and Medicare Medical 
Insurance (Part B) who are enrolled in a MMCS.

II. Collection and Maintenance of Data in the System

A. Scope of the Data Collected

    The system includes the following information about a beneficiary's 
health insurance entitlement and supplementary medical benefits usage, 
including name, health insurance claims number (HICN), and social 
security number.

B. Agency Policies, Procedures, and Restrictions on the Routine Use

    The Privacy Act permits us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such disclosure of data is known as a ``routine use.'' 
The government will only release MMCS information that can be 
associated with an individual as provided for under ``Section III. 
Proposed Routine Use Disclosures of Data in the System.'' Both 
identifiable and non-identifiable data may be disclosed under a routine 
use.
    We will only collect the minimum personal data necessary to achieve 
the purpose of MMCS. CMS has the following policies and procedures 
concerning disclosures of information that will be maintained in the 
system. Disclosure of information from the SOR will be approved only to 
the extent necessary to accomplish the purpose of the disclosure and 
only after CMS:
    1. Determines that the use or disclosure is consistent with the 
reason data is being collected; e.g., maintain a master file of MCO 
plan members for accounting and payment control; expedite the exchange 
of data with MCOs; and control the posting of pro-rata amounts to the 
Part B deductible of currently enrolled MCO members.
    2. Determines that the purpose for which the disclosure is to be 
made can only be accomplished if the record is provided in individually 
identifiable form;
    a. The purpose for which the disclosure is to be made is of 
sufficient importance to warrant the effect and/or risk on the privacy 
of the individual that additional exposure of the record might bring; 
and
    b. There is a strong probability that the proposed use of the data 
would in fact accomplish the stated purpose(s).
    3. Requires the information recipient to:
    a. Establish administrative, technical, and physical safeguards to 
prevent unauthorized use of disclosure of the record;
    b. Remove or destroy at the earliest time all patient-identifiable 
information; and
    c. Agree to not use or disclose the information for any purpose 
other than the stated purpose under which the information was 
disclosed.
    4. Determines that the data are valid and reliable.

III. Proposed Routine Use Disclosures of Data in the System

    A. These routine uses specify circumstances, in addition to those 
provided by statute in the Privacy Act of 1974, under which CMS may 
release information from the MMCS without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected. We are proposing to 
establish or modify the following routine use disclosures of 
information maintained in the system:
    1. To Agency contractors, or consultants who have been contracted 
by the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this system and who need to have access to the records 
in order to assist CMS.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing a CMS function 
relating to purposes for this system.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor or consultant whatever information is 
necessary for the contractor or consultant to fulfill its duties. In 
these situations, safeguards are provided in the contract prohibiting 
the contractor or consultant from using or disclosing the information 
for any purpose other than that described in the contract and requires 
the contractor or consultant to return or destroy all information at 
the completion of the contract.
    2. To support another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    Other Federal or state agencies in their administration of a 
Federal health program may require MMCS information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    In addition, other state agencies in their administration of a 
Federal health program may require MMCS information for the purposes of 
determining, evaluating and/or assessing cost, effectiveness, and /or 
the quality of health care services provided in the state.
    Disclosure under this routine use shall be used by state Medicaid 
agencies pursuant to agreements with the HHS for determining Medicaid 
and Medicare eligibility, for quality control studies, for determining 
eligibility of recipients of assistance under Titles IV, XVIII, and XIX 
of the Social Security Act (the Act), and for the administration of the 
Medicaid program. Data will be released to the state only on those 
individuals who are patients under the services of a Medicaid program 
within the state or who are residents of that state.
    We also contemplate disclosing information under this routine use 
in situations in which state auditing agencies require MMCS information 
for auditing state Medicaid eligibility considerations. CMS may enter 
into an agreement with state auditing agencies to assist in 
accomplishing functions relating to purposes for this system to 
providers and suppliers of services directly or through fiscal 
intermediaries (FIs) or carriers for the administration of Title XVIII 
of the Act.
    3. To providers and suppliers of services directly or through 
fiscal intermediaries (FIs) or carriers for the administration of Title 
XVIII of the Act.
    Providers and suppliers of services require MMCS information in 
order to establish the validity of evidence or to verify the accuracy 
of information presented by the individual, as it concerns the 
individual's entitlement to benefits under the Medicare program,

[[Page 61390]]

including proper reimbursement for services provided.
    4. To provide information to third party contacts in situations 
where the party to be contacted has information relating to the 
individual's capacity to manage his or her affairs or to his or her 
eligibility for, or an entitlement to, benefits under the Medicare 
program and,
    a. The individual is unable to provide the information being sought 
(an individual is considered to be unable to provide certain types of 
information when any of the following conditions exists: The individual 
is confined to a mental institution, a court of competent jurisdiction 
has appointed a guardian to manage the affairs of that individual, a 
court of competent jurisdiction has declared the individual to be 
mentally incompetent, or the individual's attending physician has 
certified that the individual is not sufficiently mentally competent to 
manage his or her own affairs or to provide the information being 
sought, the individual cannot read or write, a language barrier exist, 
or the custodian of the information will not, as a matter of policy, 
provide it to the individual), or
    b. The data are needed to establish the validity of evidence or to 
verify the accuracy of information presented by the individual, and it 
concerns one or more of the following: the individual's entitlement to 
benefits under the Medicare program, the amount of reimbursement, and 
in cases in which the evidence is being reviewed as a result of 
suspected fraud and abuse, program integrity, quality appraisal, or 
evaluation and measurement of activities.
    Third parties contacts require MMCS information in order to provide 
support for the individual's entitlement to benefits under the Medicare 
program; to establish the validity of evidence or to verify the 
accuracy of information presented by the individual, and assist in the 
monitoring of Medicare claims information of beneficiaries, including 
proper reimbursement of services provided.
    5. To insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations 
(HMOs) or a competitive medical plan (CMP) with a Medicare contract, or 
a Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be limited to Medicare 
entitlement data. In order to receive the information, they must agree 
to:
    a. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    b. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    Other insurers, TPAs, HMOs, and HCPPs may require MMCS information 
in order to support evaluations and monitoring of Medicare claims 
information of beneficiaries, including proper reimbursement for 
services provided.
    6. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    MMCS data will provide for research, evaluation, and 
epidemiological projects, a broader, longitudinal, national perspective 
of the status of Medicare beneficiaries. CMS anticipates that many 
researchers will have legitimate requests to use these data in projects 
that could ultimately improve the care provided to Medicare 
beneficiaries and the policy that governs the care.
    7. To a Member of Congress or a congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    Beneficiaries often request the help of a Member of Congress in 
resolving some issues relating to a matter before CMS. The Member of 
Congress then writes CMS, and CMS must be able to give sufficient 
information tin response to the inquiry.
    8. To the Department of Justice (DOJ), court or adjudicatory body 
when:
    a. The Agency or any component thereof, or
    b. Any employee of the Agency in his or her official capacity, or
    c. Any employee of the Agency in his or her individual capacity 
where the DOJ has agreed to represent the employee, or
    d. The United States Government, is a party to litigation or has an 
interest in such litigation, and by careful review, CMS determines that 
the records are both relevant and necessary to the litigation.
    Whenever CMS is involved in litigation, or occasionally when 
another party is involved in litigation and CMS's policies or 
operations could be affected by the outcome of the litigation, CMS 
would be able to disclose information to the DOJ, court, or 
adjudicatory body involved.
    9. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a grantee of a CMS-administered grant 
program, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contract or grant with a 
third party to assist in accomplishing CMS functions relating to the 
purpose of combating fraud and abuse.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor or grantee whatever information is necessary 
for the contractor or grantee to fulfill its duties. In these 
situations, safeguards are provided in the contract prohibiting the 
contractor or grantee from using or disclosing the information for any 
purpose other than that described in the contract and requiring the 
contractor or grantee to return or destroy all information.
    10. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any state or local governmental agency), that 
administers, or that has the authority to investigate potential fraud 
or abuse in, a health benefits program funded in whole or in part by 
Federal funds, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    Other agencies may require MMCS information for the purpose of 
combating fraud and abuse in such Federally funded programs.

B. Additional Circumstances Affecting Routine Use Disclosures

    This system contains Protected Health Information as defined by HHS 
regulation ``Standards for Privacy of Individually Identifiable Health 
Information'' (45 CFR Parts 160 and 164, 65 FR 82462 (12-28-00), 
Subparts A and E. Disclosures of Protected Health Information 
authorized by these routine

[[Page 61391]]

uses may only be made if, and as, permitted or required by the 
``Standards for Privacy of Individually Identifiable Health 
Information.''
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if we determine there is a possibility that an 
individual can be identified through implicit deduction based on small 
cell sizes (instances where the patient population is so small that 
individuals who are familiar with the enrollees could, because of the 
small size, use this information to deduce the identity of the 
beneficiary).

IV. Safeguards

    CMS has safeguards in place for authorized users and monitors such 
users to ensure against excessive or unauthorized use. Personnel having 
access to the system have been trained in the Privacy Act and 
information security requirements. Employees who maintain records in 
this system are instructed not to release data until the intended 
recipient agrees to implement appropriate management, operational and 
technical safeguards sufficient to protect the confidentiality, 
integrity and availability of the information and information systems 
and to prevent unauthorized access.
    This system will conform to all applicable Federal laws and 
regulations and Federal, HHS, and CMS policies and standards as they 
relate to information security and data privacy. These laws and 
regulations include but are not limited to: the Privacy Act of 1974; 
the Federal Information Security Management Act of 2002; the Computer 
Fraud and Abuse Act of 1986; the Health Insurance Portability and 
Accountability Act of 1996; the E-Government Act of 2002, the Clinger-
Cohen Act of 1996; the Medicare Modernization Act of 2003, and the 
corresponding implementing regulations. OMB Circular A-130, Management 
of Federal Resources, Appendix III, Security of Federal Automated 
Information Resources also applies. Federal, HHS, and CMS policies and 
standards include but are not limited to: All pertinent NIST 
publications; the HHS Automated Information Systems Security Handbook 
and the CMS Information Security Handbook.

V. Effect of the Modified SOR on Individual Rights

    CMS proposes to establish this system in accordance with the 
principles and requirements of the Privacy Act and will collect, use, 
and disseminate information only as prescribed therein. Data in this 
system will be subject to the authorized releases in accordance with 
the routine uses identified in this system of records.
    CMS will monitor the collection and reporting of MMCS data. MMCS 
information on individuals is completed by contractor personnel and 
submitted to CMS through standard systems located at different 
locations. CMS will utilize a variety of onsite and offsite edits and 
audits to increase the accuracy of MMCS data.
    CMS will take precautionary measures (see item IV. above) to 
minimize the risks of unauthorized access to the records and the 
potential harm to individual privacy or other personal or property 
rights. CMS will collect only that information necessary to perform the 
system's functions. In addition, CMS will make disclosure of 
identifiable data from the modified system only with consent of the 
subject individual, or his/her legal representative, or in accordance 
with an applicable exception provision of the Privacy Act.
    CMS, therefore, does not anticipate an unfavorable effect on 
individual privacy as a result of the disclosure of information 
relating to individuals.

    Dated: August 19, 2004.
Mark B. McClellan,
Administrator.
SYSTEM No. 09-70-4001

SYSTEM NAME:
    ``Medicare Managed Care System (MMCS)'' HHS/CMS/CBC

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive

SYSTEM LOCATION:
    CMS Data Center, 7500 Security Boulevard, North Building, First 
Floor, Baltimore, Maryland 21244-1850.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Recipients of Medicare hospital insurance (Part A) and Medicare 
medical insurance (Part B) who are enrolled in a Medicare Managed Care 
Plan.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system contains information about a beneficiary's health 
insurance entitlement and medical insurance benefits usage.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under the 
provisions of Sec. Sec.  1833(a)(1)(A), 1866, and 1876 of Title XVIII 
of the Social Security Act (the Act) (42 U.S.C. 1395(A)(1)(a), 1395cc, 
and 1395mm).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of the SOR is to maintain a master file of 
Medicare Managed Care Organizations (MCO) plan members for accounting 
and payment control; expedite the exchange of data with MCOs; and 
control the posting of pro-rata amounts to the Part B deductible of 
currently enrolled MCO members. MMCS include the following entities: 
Health Maintenance Organizations (HMO), Competitive Medical Plans 
(CMP), Health Care Prepayment Plan (HCPP), and Medicare Choice 
Organizations (MCO). Information in this system will also be disclosed 
to: (1) Support regulatory, reimbursement, and policy functions 
performed within the Agency or by a contractor or consultant, (2) 
support another Federal and/or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent; 
(3) provider and suppliers of service directly or dealing through 
contractors, fiscal intermediaries (FI) or carriers for administration 
of Title XVIII; (4) provide information to third party contacts in 
situations where the contact has information relating to the 
individual's capacity to manage his or her affairs; (5) other insurers, 
third party administrators (TPA), and other groups providing protection 
for their enrollees to assist in the processing of individual insurance 
claims (6) facilitate research on the quality and effectiveness of care 
provided, as well as payment-related projects, (7) support constituent 
requests made to a congressional representative, (8) support litigation 
involving the Agency, and (9 & 10) combat fraud and abuse in certain 
health benefits programs.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OR USERS AND THE PURPOSES OF SUCH USES:
    A. These routine uses specify circumstances, in addition to those 
provided by statute in the Privacy Act of 1974, under which CMS may 
release information from the MMCS without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected. We are proposing to 
establish or modify the following routine use disclosures of 
information maintained in the system:

[[Page 61392]]

    1. To Agency contractors, or consultants who have been contracted 
by the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this system and who need to have access to the records 
in order to assist CMS.
    2. To support another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    3. To providers and suppliers of services directly or through 
fiscal intermediaries (FIs) or carriers for the administration of Title 
XVIII of the Act.
    4. To provide information to third party contacts in situations 
where the party to be contacted has information relating to the 
individual's capacity to manage his or her affairs or to his or her 
eligibility for, or an entitlement to, benefits under the Medicare 
program and,
    a. The individual is unable to provide the information being sought 
(an individual is considered to be unable to provide certain types of 
information when any of the following conditions exists: the individual 
is confined to a mental institution, a court of competent jurisdiction 
has appointed a guardian to manage the affairs of that individual, a 
court of competent jurisdiction has declared the individual to be 
mentally incompetent, or the individual's attending physician has 
certified that the individual is not sufficiently mentally competent to 
manage his or her own affairs or to provide the information being 
sought, the individual cannot read or write, a language barrier exists, 
or the custodian of the information will not, as a matter of policy, 
provide it to the individual), or
    b. The data are needed to establish the validity of evidence or to 
verify the accuracy of information presented by the individual, and it 
concerns one or more of the following: the individual's entitlement to 
benefits under the Medicare program, the amount of reimbursement, and 
in cases in which the evidence is being reviewed as a result of 
suspected fraud and abuse, program integrity, quality appraisal, or 
evaluation and measurement of activities.
    5. To insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations 
(HMOs) or a competitive medical plan (CMP) with a Medicare contract, or 
a Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be limited to Medicare 
entitlement data. In order to receive the information, they must agree 
to:
    a. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    b. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    6. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    7. To a Member of Congress or a congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    8. To the Department of Justice (DOJ), court or adjudicatory body 
when:
    a. The Agency or any component thereof, or
    b. Any employee of the Agency in his or her official capacity, or
    c. Any employee of the Agency in his or her individual capacity 
where the DOJ has agreed to represent the employee, or
    d. The United States Government, is a party to litigation or has an 
interest in such litigation, and by careful review, CMS determines that 
the records are both relevant and necessary to the litigation.
    9. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a grantee of a CMS-administered grant 
program, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    10. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any state or local governmental agency), that 
administers, or that has the authority to investigate potential fraud 
or abuse in, a health benefits program funded in whole or in part by 
Federal funds, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.

B. Additional Circumstances Affecting Routine Use Disclosures

    This system contains Protected Health Information as defined by HHS 
regulation ``Standards for Privacy of Individually Identifiable Health 
Information'' (45 CFR Parts 160 and 164, 65 FR 82462 (12-28-00), 
Subparts A and E. Disclosures of Protected Health Information 
authorized by these routine uses may only be made if, and as, permitted 
or required by the ``Standards for Privacy of Individually Identifiable 
Health Information.''
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if we determine there is a possibility that an 
individual can be identified through implicit deduction based on small 
cell sizes (instances where the patient population is so small that 
individuals who are familiar with the enrollees could, because of the 
small size, use this information to deduce the identity of the 
beneficiary).

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Computer diskette and on magnetic storage media.

RETRIEVABILITY:
    Information can be retrieved by name and health insurance claim 
number of the beneficiary.

SAFEGUARDS:
    CMS has safeguards in place for authorized users and monitors such 
users to ensure against excessive or unauthorized use. Personnel having 
access to the system have been trained in the Privacy Act and 
information security requirements. Employees who maintain records in 
this system are instructed not to release data until the intended 
recipient agrees to implement appropriate management, operational and 
technical safeguards sufficient to protect the confidentiality, 
integrity and availability of the information and

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information systems and to prevent unauthorized access.
    This system will conform to all applicable Federal laws and 
regulations and Federal, HHS, and CMS policies and standards as they 
relate to information security and data privacy. These laws and 
regulations include but are not limited to: the Privacy Act of 1974; 
the Federal Information Security Management Act of 2002; the Computer 
Fraud and Abuse Act of 1986; the Health Insurance Portability and 
Accountability Act of 1996; the E-Government Act of 2002, the Clinger-
Cohen Act of 1996; the Medicare Modernization Act of 2003, and the 
corresponding implementing regulations. OMB Circular A-130, Management 
Of Federal Resources, Appendix III, Security of Federal Automated 
Information Resources also applies. Federal, HHS, and CMS policies and 
standards include but are not limited to: all pertinent NIST 
publications; the HHS Automated Information Systems Security Handbook 
and the CMS Information Security Handbook.

RETENTION AND DISPOSAL:
    Records are maintained in a secure storage area with identifiers. 
Disposal occurs three years from the last action on the hospital's cost 
report, and should be coordinated with disposal of the reports.

SYSTEM MANAGER AND ADDRESS:
    Director, Division of Managed Care Operations, Information Services 
Modernization Group, Office of Information Services, CMS, 7500 Security 
Boulevard, N3-16-24, Baltimore, Maryland 21244-1850.

NOTIFICATION PROCEDURE:
    For purpose of access, the subject individual should write to the 
systems manager who will require the system name, SSN, address, date of 
birth, sex, and for verification purposes, the subject individual's 
name (woman's maiden name, if applicable). Furnishing the SSN is 
voluntary, but it may make searching for a record easier and prevent 
delay.

RECORD ACCESS PROCEDURE:
    For purpose of access, use the same procedures outlined in 
Notification Procedures above. Requestors should also reasonably 
specify the record contents being sought. (These procedures are in 
accordance with Department regulation 45 CFR 5b.5(a)(2)).

CONTESTING RECORD PROCEDURES:
    The subject individual should contact the system manager named 
above, and reasonably identify the record and specify the information 
to be contested. State the corrective action sought and the reasons for 
the correction with supporting justification. (These procedures are in 
accordance with Department regulation 45 CFR 5b.7).

RECORD SOURCE CATEGORIES:
    Data for this system is collected from MCO (which obtained the data 
from the individuals concerned), Social Security Administration, and 
the Enrollment Database system of records.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. 04-23251 Filed 10-15-04; 8:45 am]
BILLING CODE 4120-03-P