Centers for Medicare & Medicaid Services; Privacy Act of 1974; Report of a Modified or Altered System, 17470-17476 [E6-4953]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Centers for Medicare & Medicaid Services

[Federal Register Volume 71, Number 66 (Thursday, April 6, 2006)]
[Notices]
[Pages 17470-17476]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4953]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Centers for Medicare & Medicaid Services; Privacy Act of 1974; 
Report of a Modified or Altered System

AGENCY: Department of Health and Human Services (HHS), Centers for 
Medicare & Medicaid Services (CMS).

ACTION: Notice of a 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 existing SOR, ``Medicare 
Provider Analysis and Review (MEDPAR), System No. 09-70-0009.'' Notice 
for this system was published at 65 Federal Register (FR) 50548 (August 
18, 2000). CMS is reorganizing its databases because of the impact of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) (Public Law (Pub. L.) 108-173) provisions and the large 
volume of information the Agency collects to administer the Medicare 
program. We propose to assign a new CMS identification number to this 
system to simplify the obsolete and confusing numbering system 
originally designed to identify the Bureau, Office, or Center that 
maintained the system. The new assigned identifying number for this 
system should read: System No. 09-70-0514.
    We propose to establish a new routine use to provide disclosure of 
data to hospitals that may be entitled to disproportionate share 
hospital payments. This new routine use will implement the disclosure 
provisions of Section 951 of the MMA. Section 951 will provide 
hospitals with a data set that will span the 2 Federal Fiscal Years 
that encompass the hospital's cost reporting period. This modification 
will carry out the purposes of the MEDPAR

[[Page 17471]]

and enable hospitals to calculate and verify their Supplemental 
Security Income (SSI) ratio without the need for additional processing 
on the part of CMS. This new routine use will be published at routine 
use number 3.
    We are modifying the language in some of the remaining routine uses 
to provide clarity to CMS' intention to disclose individual-specific 
information contained in this system. The routine uses will then be 
prioritized and reordered according to their usage. We will also take 
the opportunity to update any sections of the system that were affected 
by recent reorganizations and to update language in the administrative 
sections to correspond with language used in other CMS SORs.
    The primary purpose of the system is to collect and maintain 
information for all services rendered during Medicare beneficiary stays 
in an inpatient hospital and/or Skilled Nursing Facilities (SNF), so as 
to enable CMS and its contractors to facilitate research on the quality 
and effectiveness of care provided, update annual hospital Inpatient 
Prospective Payment System (IPPS) rates, and to calculate Supplemental 
Security Income (SSI) ratios for hospitals that are paid under the 
hospital IPPS and serve a disproportionate share of low-income patients 
(hospitals that serve a disproportionate share of low-income patients 
are entitled to increased reimbursement under the IPPS). Information 
retrieved from 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) provide system data to a 
hospital that has an appeal properly pending before the Provider 
Reimbursement Review Board (PRRB) or before an intermediary; (3) 
provide system data when all requirements have been met to a hospital 
that may be entitled to disproportioned share hospital payments and 
makes a request in accordance with section 951 of the MMA; (4) assist 
another Federal or state agency with information to enable such agency 
to administer a Federal health benefits program, or 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; (5) support constituent requests made to a Congressional 
representative; (6) support litigation involving the agency; (7) 
facilitate research on the quality and effectiveness of care provided; 
and (8) combat fraud and abuse in certain Federally-funded health 
benefits programs. We have provided background information about the 
modified system in the ``Supplementary Information'' section below. 
Although the Privacy Act requires only that CMS provide an opportunity 
for interested persons to comment on the proposed routine uses, CMS 
invites comments on all portions of this notice. See ``Effective 
Dates'' section for comment period.

DATES: Effective 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 Homeland Security & 
Governmental Affairs, and the Administrator, Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB) on 3/30/2006. 
To ensure that all parties have adequate time in which to comment, the 
modified system, including routine uses, will become effective 30 days 
from the publication of the notice, or 40 days from the date it was 
submitted to OMB and Congress, whichever is later, unless CMS receives 
comments that require alterations to this notice.

ADDRESSES: The public should address comments to: CMS Privacy Officer, 
Division of Privacy Compliance Data Development, 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 time zone.

FOR FURTHER INFORMATION CONTACT: Molly Smith, Division of Acute Care, 
Hospital and Ambulatory Provider Group, Center for Medicare Management, 
CMS, Room C4-08-06, 7500 Security Boulevard, Baltimore, Maryland 21244-
1850. The telephone number is (410) 786-8354; she can also be reached 
via e-mail at Molly.Smith@cms.hhs.gov.

SUPPLEMENTARY INFORMATION: Notice of this system was last published at 
65 FR 50548 (August 18, 2000). The MEDPAR contains a summary of all 
services rendered to a Medicare beneficiary, from the time of admission 
through discharge, for a stay in an inpatient hospital and/or SNF, SSI 
eligibility information that CMS receives from the Social Security 
Administration (SSA) on Medicare beneficiaries who have had stays in 
inpatient hospitals and SNF, and enrollment data on Medicare 
beneficiaries.
    Under section 1886 (d)(5)(F)(vi)(I) of the Social Security Act, 42 
U.S.C. 1395ww(d)(5)(F)(vi)(I), hospitals that are paid under the IPPS 
and serve a disproportionate share of low-income patients may be 
entitled to increased reimbursement under Part A of the Medicare 
program. Such disproportionate share hospital payments, which became 
effective for discharges occurring on or after May 1, 1986, depend in 
part on a hospital's ``SSI ratio.'' CMS determines a hospital's SSI 
ratio by comparing, for the same period, (1) the hospital's total 
number of its Medicare inpatient days to (2) the hospital's ``Medicare/
SSI days,'' i.e., inpatient days attributable to Medicare patients who 
for such days were eligible for SSI payments under Title XVI of the 
Act. In determining a hospital's SSI ratio, CMS uses information from 
the National Claims History (CMS System No. 09-70-0005), in conjunction 
with SSI eligibility information that CMS receives from SSA. CMS 
notifies each hospital of the total number of its Medicare/SSI days for 
a given Federal fiscal year, or cost reporting period, but does not 
identify which of the hospital's Medicare patients had Medicare/SSI 
days.
    Section 951 of the MMA requires the Secretary of HHS to arrange to 
furnish the data necessary for hospitals to compute the number of 
patient days used in calculating their disproportionate patient 
percentage. Beginning with cost reporting periods that include December 
8, 2004, CMS will arrange to furnish, consistent with the Privacy Act, 
the MEDPAR limited data set data for a hospital's Medicare patients at 
the hospital's request, regardless of whether there is a properly 
pending appeal relating to disproportionate share hospital payments. We 
will make the information available for either the Federal fiscal year 
or, if the hospital's fiscal year differs from the Federal fiscal year, 
for the months included in the 2 Federal fiscal years that encompass 
the hospital's cost reporting period. Under this provision, the 
hospital will be able to use these data to calculate and verify its SSI 
ratio, and to decide whether it prefers to have the fraction determined 
on the basis of its fiscal year rather than a Federal fiscal year.

I. Description of the Modified or Altered System of Records

A. Statutory and Regulatory Basis for System of Records

    Authority for maintenance of this system is given under sections 
1102(a), 1871, and 1886(d)(5)(F) of the Social Security Act, (Title 42 
United States Code (U.S.C.) Sec. Sec.  1302(a), 1395hh, and 
1395ww(d)(5)(F)). Authority is also given under section 951 of the 
Medicare Prescription Drug, Improvement, and

[[Page 17472]]

Modernization Act of 2003 (Pub. L. 108-173).

B. Scope of the Data Collected

    The MEDPAR contains a summary of all services rendered to a 
Medicare beneficiary, from the time of admission through discharge, for 
a stay in an inpatient hospital and/or SNF, SSI entitlement information 
that CMS receives from SSA on Medicare beneficiaries who have had stays 
at inpatient hospitals and SNF, and enrollment data on Medicare 
beneficiaries. The MEDPAR contains information necessary for 
appropriate Medicare claim processing. It also contains, but is not 
limited to, the Medicare health insurance claim number, gender, race, 
age (no date of birth), zip code, state and county for Medicare 
beneficiaries who have received inpatient hospital and SNF services.

II. Collection and Maintenance of Data in the System

A. 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 MEDPAR 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 MEDPAR. CMS has the following policies and procedures 
concerning disclosures of information that will be maintained in the 
system. Disclosure of information from this system 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 that the data is being collected, e.g., to collect and maintain 
information for all services rendered during Medicare beneficiary stays 
in an inpatient hospital and/or SNF, so as to enable CMS and its 
contractors to facilitate research on the quality and effectiveness of 
care provided, update annual hospital IPPS rates, and to calculate SSI 
ratios for hospitals that are paid under the hospital IPPS and serve a 
disproportionate share of low-income patients.
    2. Determines:
    a. That the purpose for which the disclosure is to be made can only 
be accomplished if the record is provided in individually identifiable 
form;
    b. That the purpose for which the disclosure is to be made is of 
sufficient importance to warrant the potential effect and/or risk on 
the privacy of the individual that additional exposure of the record 
might bring; and
    c. That 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; and
    b. Remove or destroy at the earliest time all patient-identifiable 
information.
    4. Determines that the data are valid and reliable.

III. Proposed Routine Use Disclosures of Data in the System

    A. The Privacy Act allows 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 compatible use of data is known as a ``routine 
use.'' The proposed routine uses in this system meet the compatibility 
requirement of the Privacy Act. We are proposing to establish the 
following routine use disclosures of information maintained in the 
system:
    1. To agency contractors, or consultants who have been engaged by 
the agency to assist in the performance of a service related to this 
system of records and who need to have access to the records in order 
to perform the activity.
    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 CMS function 
relating to purposes for this system.
    CMS occasionally contracts out some of its functions when doing so 
would contribute to more 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 a hospital that has an appeal properly pending before the 
Provider Reimbursement Review Board, or before an intermediary, on the 
issue of whether it is entitled to disproportionate share hospital 
payments, or the amount of such payments. As a condition of disclosure 
under this routine use, CMS will require the recipient of the 
information to:
    a. Establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized access, use, or disclosure of the 
record or any part thereof;
    b. Remove or destroy the information that allows the subject 
individual(s) to be identified at the earliest time at which removal or 
destruction can be accomplished consistent with the purpose of the 
request;
    c. Refrain from using or disclosing the information for any purpose 
other than the stated purpose under which the information was 
disclosed; and
    d. Attest in writing that it understands the foregoing provisions, 
and is willing to abide by the foregoing provisions and any additional 
provisions that CMS deems appropriate in the particular circumstances.
    Disclosure under this routine use shall be for the purpose of 
assisting the hospital to verify or challenge CMS' determination of the 
hospital's SSI ratio (i.e., the total number of Medicare days compared 
to the number of Medicare/SSI days). Disclosure shall be limited to 
data concerning the total number of patient days, the number of SSI/
Medicare days, if any, and the number of Medicare covered days, if any, 
associated with each stay at the hospital's facility during the cost 
reporting period under appeal or, where the hospital does not report on 
a Federal Fiscal Years basis, during the 2 Federal Fiscal Years in 
which the hospital's cost reporting period falls. The data disclosed 
will relate to stays at the hospital's IPPS units as well as any IPPS-
excluded units in order to assist the hospital in verifying that all 
qualifying stays (i.e., those in the IPPS units) were included in CMS' 
determination of the hospital's SSI ratio. The routine use would permit 
disclosure only to a hospital that has a proper appeal pending before 
the PRRB or before an intermediary. This routine use is applicable to 
appeals of determinations of a hospital's SSI ratio for cost reporting 
periods ending prior to December 8, 2004.
    3. To a hospital that may be entitled to disproportionate share 
hospital

[[Page 17473]]

payments, or the amount of such payments, for cost reporting periods 
that span December 8, 2004, and beyond. As a condition of disclosure 
under this routine use, CMS will require the recipient of the 
information to:
    a. Establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized access, use or disclosure of the 
record or any part thereof;
    b. Remove or destroy the information that allows the subject 
individual(s) to be identified at the earliest time at which removal or 
destruction can be accomplished consistent with the purpose of the 
request;
    c. Refrain from using or disclosing the information for any purpose 
other than the stated purpose under which the information was 
disclosed; and
    d. Attest in writing that it understands the foregoing provisions, 
and is willing to abide by the foregoing provisions and any additional 
provisions that CMS deems appropriate in the particular circumstances.
    Disclosure under this routine use shall be for the purpose of 
assisting the hospital to verify or challenge CMS' determination of the 
hospital's SSI ratio (i.e., the total number of Medicare days compared 
to the number of Medicare/SSI days). Disclosure shall be limited to 
data concerning the total number of patient days, the number of SSI/
Medicare days, if any, and the number of Medicare covered days, if any, 
associated with each stay at the hospital's facility during the cost 
reporting period for which the hospital has requested the data, or, 
where the hospital does not report on a Federal Fiscal Years basis, 
during the 2 Federal Fiscal Years in which the hospital's cost 
reporting period falls. The data disclosed will relate to stays at the 
hospital's IPPS units as well as any IPPS-excluded units in order to 
assist the hospital in verifying that all qualifying stays (i.e., those 
in the IPPS units) were included in CMS' determination of the 
hospital's SSI ratio. This routine use is applicable for cost reporting 
periods ending on or after December 8, 2004.
    4. To another Federal or state agency to:
    a. Contribute to the accuracy of CMS' proper payment of Medicare 
benefits, and/or
    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.
    Other Federal or state agencies in their administration of a 
Federal health program may require MEDPAR information in order to 
support evaluations and monitoring of Medicare claims information of 
beneficiaries who have had stays at inpatient hospitals and SNF, 
including proper reimbursement for services provided. In addition, 
other state agencies in their administration of a Federal health 
program may require MEDPAR information for the purpose of determining, 
evaluating and/or assessing cost effectiveness, and/or the quality of 
health care services provided in the state.
    5. To an individual or organization for research, evaluation, or 
epidemiological projects related to the prevention of disease or 
disability, or the restoration or maintenance of health, and for 
payment related projects.
    The MEDPAR data will provide the research, evaluation and 
epidemiological projects a broader, longitudinal, national perspective 
of the MEDPAR and inpatient data. CMS anticipates that many researchers 
will have legitimate requests to use these data in projects that could 
ultimately improve the care provided to Medicare patients and the 
policy that governs the care.
    6. To a member of Congress or to 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 sometimes request the help of a member of Congress in 
resolving an issue relating to a matter before CMS. The member of 
Congress then writes CMS, and CMS must be able to give sufficient 
information to be responsive to the inquiry.
    7. 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 and that 
the use of such records by the DOJ, court or adjudicatory body is 
compatible with the purpose for which the agency collected the records.
    Whenever CMS is involved in litigation, and occasionally when 
another party is involved in litigation and CMS' 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.
    8. To a CMS contractor (including, but not necessarily limited to 
fiscal intermediaries 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 program.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual relationship 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 and makes 
grants 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.
    9. 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 MEDPAR information for the purpose of 
combating fraud and abuse in such Federally-funded programs.

B. Additional Provisions Affecting Routine Use Disclosures

    To the extent this system contains Protected Health Information 
(PHI) as defined by HHS regulation ``Standards for Privacy of 
Individually Identifiable Health Information'' (45 CFR Parts 160

[[Page 17474]]

and 164, Subparts A and E) 65 FR 82462 (12-28-00). Disclosures of such 
PHI that are otherwise 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.'' (See 45 CFR 164-512 
(a)(1)).
    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 may apply 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 National 
Institute of Standards and Technology publications; the HHS Information 
Systems Program Handbook and the CMS Information Security Handbook.

V. Effects of the Modified or Altered System of Records 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 take precautionary measures to minimize the risks of 
unauthorized access to the records and the potential harm to individual 
privacy or other personal or property rights of patients whose data are 
maintained in the system. CMS will collect only that information 
necessary to perform the system's functions. In addition, CMS will make 
disclosure from the proposed 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: March 29, 2006.
Charlene Fizzera,
Acting Chief Operating Officer, Centers for Medicare & Medicaid 
Services.
SYSTEM NO. 09-70-0514

SYSTEM NAME:
    ``Medicare Provider Analysis and Review (MEDPAR) HHS/CMS/OIS.''

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive Data.

SYSTEM LOCATION:
    Centers for Medicare & Medicaid Services (CMS) Data Center, 7500 
Security Boulevard, North Building, First Floor, Baltimore, Maryland 
21244-1850.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    The MEDPAR contains a summary of all services rendered to a 
Medicare beneficiary, from the time of admission through discharge, for 
a stay in an inpatient hospital and/or Skilled Nursing Facilities 
(SNF), Supplemental Security Income (SSI) entitlement information that 
CMS receives from the Social Security Administration on Medicare 
beneficiaries who have had stays at inpatient hospitals and SNF, and 
enrollment data on Medicare beneficiaries.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The MEDPAR contains information necessary for appropriate Medicare 
claim processing. It also contains, but is not limited to, the Medicare 
health insurance claim number (HICN), gender, race, age (no date of 
birth), zip code, state and county for Medicare beneficiaries who have 
received inpatient hospital and SNF services.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of this system is given under sections 
1102(a), 1871, and 1886(d)(5)(F) of the Social Security Act, (Title 42 
United States Code (U.S.C.) Sec. Sec.  1302(a), 1395hh, and 
1395ww(d)(5)(F)). Authority is also given under section 951 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Pub. L. 108-173).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of the system is to collect and maintain 
information for all services rendered during Medicare beneficiary stays 
in an inpatient hospital and/or Skilled Nursing Facilities, so as to 
enable CMS and its contractors to facilitate research on the quality 
and effectiveness of care provided, update annual hospital Inpatient 
Prospective Payment System (IPPS) rates, and to calculate Supplemental 
Security Income ratios for hospitals that are paid under the hospital 
IPPS and serve a disproportionate share of low-income patients, 
(hospitals that serve a disproportionate share of low-income patients 
are entitled to increased reimbursement under the IPPS). Information 
retrieved from 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) provide system data to a 
hospital that has an appeal properly pending before the Provider 
Reimbursement Review Board (PRRB) or before an intermediary; (3) 
provide system data when all requirements have been met to a hospital 
that may be entitled to disproportioned share hospital payments and 
makes a requests in accordance with section 951 of the MMA; (4) assist 
another Federal or state agency with information to enable such agency 
to administer a Federal health benefits program, or 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; (5) support constituent requests made to a Congressional 
representative; (6) support litigation involving the

[[Page 17475]]

agency; (7) facilitate research on the quality and effectiveness of 
care provided; and, (8) combat fraud and abuse in certain Federally-
funded health benefits programs.

Routine Uses of Records Maintained in the System, Including Categories 
or Users and the Purposes of Such Uses:
    A. The Privacy Act allows 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 compatible use of data is known as a ``routine 
use.'' The proposed routine uses in this system meet the compatibility 
requirement of the Privacy Act. We are proposing to establish the 
following routine use disclosures of information maintained in the 
system:
    1. To agency contractors, or consultants who have been engaged by 
the agency to assist in the performance of a service related to this 
system of records and who need to have access to the records in order 
to perform the activity.
    2. To a hospital that has an appeal properly pending before the 
Provider Reimbursement Review Board, or before an intermediary, on the 
issue of whether it is entitled to disproportionate share hospital 
payments, or the amount of such payments. As a condition of disclosure 
under this routine use, CMS will require the recipient of the 
information to:
    a. Establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized access, use, or disclosure of the 
record or any part thereof;
    b. Remove or destroy the information that allows the subject 
individual(s) to be identified at the earliest time at which removal or 
destruction can be accomplished consistent with the purpose of the 
request;
    c. Refrain from using or disclosing the information for any purpose 
other than the stated purpose under which the information was 
disclosed; and
    d. Attest in writing that it understands the foregoing provisions, 
and is willing to abide by the foregoing provisions and any additional 
provisions that CMS deems appropriate in the particular circumstances.
    3. To a hospital that may be entitled to disproportionate share 
hospital payments, or the amount of such payments, for cost reporting 
periods that span December 8, 2004, and beyond. As a condition of 
disclosure under this routine use, CMS will require the recipient of 
the information to:
    a. Establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized access, use or disclosure of the 
record or any part thereof;
    b. Remove or destroy the information that allows the subject 
individual(s) to be identified at the earliest time at which removal or 
destruction can be accomplished consistent with the purpose of the 
request;
    c. Refrain from using or disclosing the information for any purpose 
other than the stated purpose under which the information was 
disclosed; and
    d. Attest in writing that it understands the foregoing provisions, 
and is willing to abide by the foregoing provisions and any additional 
provisions that CMS deems appropriate in the particular circumstances.
    4. To another Federal or state agency to:
    a. Contribute to the accuracy of CMS' proper payment of Medicare 
benefits, and/or
    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.
    5. To an individual or organization for research, evaluation, or 
epidemiological projects related to the prevention of disease or 
disability, or the restoration or maintenance of health, and for 
payment related projects.
    6. To a member of Congress or to 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.
    7. 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 and that 
the use of such records by the DOJ, court or adjudicatory body is 
compatible with the purpose for which the agency collected the records.
    8. To a CMS contractor (including, but not necessarily limited to 
fiscal intermediaries 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 program.
    9. 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 Provisions Affecting Routine Use Disclosures
    To the extent this system contains Protected Health Information 
(PHI) as defined by HHS regulation ``Standards for Privacy of 
Individually Identifiable Health Information'' (45 CFR Parts 160 and 
164, Subparts A and E) 65 FR 82462 (12-28-00). Disclosures of such PHI 
that are otherwise 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.'' (See 45 CFR 164-512 (a) 
(1)).
    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:
    All records are stored on magnetic media.

RETRIEVABILITY:
    The Medicare records are retrieved by HICN 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

[[Page 17476]]

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 may apply 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 National 
Institute of Standards and Technology publications; the HHS Information 
Systems Program Handbook and the CMS Information Security Handbook.

RETENTION AND DISPOSAL:
    CMS will retain identifiable MEDPAR data for a total period not to 
exceed 25 years. All claims-related records are encompassed by the 
document preservation order and will be retained until notification is 
received from DOJ.

SYSTEM MANAGER AND ADDRESS:
    Director, Division of Acute Care, Hospital and Ambulatory Provider 
Group, Center for Medicare Management, CMS, Room C4-08-06, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850.

NOTIFICATION PROCEDURE:
    For purpose of access, the subject individual should write to the 
system manager who will require the system name, HICN, address, age, 
gender, and for verification purposes, the subject individual's name 
(woman's maiden name, if applicable) and social security number (SSN). 
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:
    CMS's National Claims History system of records, enrollment data on 
Medicare beneficiaries, and SSI eligibility information from the Social 
Security Administration.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
 [FR Doc. E6-4953 Filed 4-5-06; 8:45 am]
BILLING CODE 4120-01-P