Privacy Act of 1974; Report of a Modified or Altered System of Records, 70396-70403 [E6-20408]

Agencies

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

[Federal Register Volume 71, Number 232 (Monday, December 4, 2006)]
[Notices]
[Pages 70396-70403]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20408]


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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 of 
Records

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 
Beneficiary Database (MBD),'' System No. 09-70-0536, established at 66 
Federal Register (FR) 63392 (December 6, 2001), and modified at 71 FR 
11420 (March 7, 2006). The Medicare Prescription Drug, Improvement, and 
Modernization Act (MMA) authorizes Medicare payment to Part D sponsors 
(including Medicare Advantage prescription drug plan sponsors) that 
contract with CMS to provide qualified Part D prescription drug 
coverage as described in 42 CFR Parts 417, 422 and 423. The MBD will 
include data necessary to process certain activities associated with 
the new Part D benefit including, but not limited to, the following 
activities: (1) Determination of the status of Medicare beneficiaries 
who are eligible for the Low Income Subsidy Program (LIS) and are 
deemed to receive certain drug benefits; and (2) auto-assignment/auto-
enrollment of beneficiaries as required by the MMA, and regulation, to 
include all LIS and deemed individuals who are not voluntarily enrolled 
in a drug plan, will automatically be assigned to a Prescription Drug 
Plan (PDP) or Medicare Advantage (MA) Prescription Drug Plan (MA-PD).
    We propose to broaden the scope of the disclosure provisions of 
this system by adding a new routine use to permit the release of Part D 
enrollment data maintained in the MBD to support Patient Assistance 
Programs (PAP) and other groups providing pharmaceutical assistance to 
the Medicare beneficiary. The new routine use will be published as 
routine use number 8. Specifically, the new routine use will facilitate 
the sharing of information between PAPs and Part D plans to meet the 
MMA provisions for drug utilization reviews, drug medication therapy 
management, and quality of care that can only be addressed through the 
cooperation between the PAP and the Part D Plan. Information may be 
released to these organizations upon a specific request, and only if 
the requester meets the following requirements. They must (1) Provide 
an attestation or other qualifying information that they are providing 
pharmaceutical assistance to Medicare beneficiaries; (2) submit a 
finder file identifying Medicare beneficiaries receiving pharmaceutical 
assistance and/or services; (3) safeguard the confidentiality of any 
CMS data received and prevent unauthorized access; and, (4) complete a 
written statement attesting to the information recipient's 
understanding of and willingness to abide by CMS provisions regarding 
Privacy protections and information security. Recipients of CMS data 
must complete the Coordination of Benefits PAP Data Sharing Agreement 
prior to the release of CMS data. The finder file submitted by the PAP 
must provide the following data elements: (a) First initial of the 
first name, (b) first 6 letters of the last name, (c) social security 
number or health insurance claims number, (d) date of birth, and (e) 
sex. Part D data maintained in the MBD that will be released to a PAP 
or a group providing pharmaceutical assistance will consist of the 
verification of Medicare status and the identification of the current 
Part D Plan selected by the Medicare beneficiary.
    We will delete published routine use number 8 authorizing 
disclosure to support constituent requests made to a congressional 
representative. If an authorization for the disclosure has been 
obtained from the data subject, then no routine use is needed. The 
Privacy Act allows for disclosures with the ``prior written consent'' 
of the data subject. We will broaden the scope of published routine 
uses number 10 and 11 authorizing disclosures to combat fraud and abuse 
in the Medicare and Medicaid programs to include combating ``waste'' 
which shall refer to specific beneficiary/recipient practices that 
result in unnecessary cost to all federally-funded health benefit 
programs.
    The primary purpose of this modified system is to provide CMS with 
a singular, authoritative, database of comprehensive enrollment data on 
individuals in the Medicare program to support ongoing and expanded 
program administration, service delivery modalities, and payment 
coverage options. This collection will contain a complete ``beneficiary 
insurance profile'' that reflects the individual's Medicare health 
insurance coverage and Medicare health plan and demonstration 
enrollment. Information retrieved from this system of records will also 
be disclosed to: (1) Support regulatory, reimbursement, and policy 
functions performed within the agency or by a contractor, consultant or 
a CMS grantee; (2) assist another Federal or State agency, agency of a 
State government, an agency established by State law, or its fiscal 
agent; (3) support providers and suppliers of services for 
administration of Title XVIII; (4) assist third parties where the 
contact is expected to have information relating to the individual's 
capacity to manage his or her own affairs; (5) support Quality 
Improvement Organizations (QIO); (6) assist other insurers for 
processing individual insurance claims; (7) facilitate research on the 
quality and effectiveness of care provided, as well as payment related 
projects; (8) support Patient Assistance Programs and other groups 
providing pharmaceutical assistance or services to Medicare 
beneficiaries; (9) support litigation involving the agency; and (10) 
combat fraud, waste, and abuse in certain 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 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 SOR 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 11/28/2006. To ensure 
that all parties have adequate time in which to comment, the new system 
will become effective 30 days from the publication of the notice, or 40 
days from the date it was submitted to OMB and the Congress, whichever 
is later. We may defer implementation of this system or one or more of 
the routine use statements listed below if we receive comments that 
persuade us to defer implementation.

ADDRESSES: The public should address comments to: CMS Privacy Officer, 
Division of Privacy Compliance, Enterprise Architecture and Strategy 
Group, Office of Information Services, CMS, Room N2-04-27, 7500 
Security

[[Page 70397]]

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: Danielle Moon, Director, Division of 
Enrollment and Eligibility Policy, Medicare Enrollment and Appeals 
Group, Center for Beneficiary Choices, CMS, Mail Stop S1-05-06, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850. Her telephone 
number is 410-786-5724, and via e-mail at Danielle.Moon@cms.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Description of the Modified or Altered System of Records

A. Statutory and Regulatory Basis for SOR

    Authority for maintenance of the system is given under Sec. Sec.  
226, 226A, 1811, 1818, 1818A, 1831, 1833(a)(1)(A), 1836, 1837, 1838, 
1843, 1866, 1876, 1881, and 1902(a)(6) of the Act and Title 42 United 
States Code (U.S.C.) 426, 426-1, 1395c, 1395cc, 1395i-2, 1395i-2a, 
1395j, 13951, 1395mm, 1395o, 1395p, 1395q, 1395rr, 1395v, 1396a, and 
Section 101 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Pub. L. 108-173) (Regulations at 42 CFR 
Parts 403, 411, 417 and 423).

B. Collection and Maintenance of Data in the System

    This system contains information on individuals age 65 or over who 
have been, or currently are, entitled to health insurance (Medicare) 
benefits under Title XVIII of the Social Security Act (the Act) or 
under provisions of the Railroad Retirement Act; individuals under age 
65 who have been, or currently are, entitled to such benefits on the 
basis of having been entitled for not less that 24 months to disability 
benefits under Title II of the Act or under the Railroad Retirement 
Act; individuals who have been, or currently are, entitled to such 
benefits because they have End-Stage Renal Disease (ESRD); individuals 
age 64 and 8 months or over who are likely to become entitled to health 
insurance (Medicare) benefits upon attaining age 65, and individuals 
under age 65 who have at least 21 months of disability benefits who are 
likely to become entitled to Medicare upon the 25th month or 
entitlement to such benefits and those populations that are dually 
eligible for both Medicare and Medicaid (Title XIX of the Act).
    Information maintained in the system include, but are not limited 
to: Standard data for identification such as health insurance claim 
number, social security number, gender, race/ethnicity, date of birth, 
geographic location, Medicare enrollment and entitlement information, 
MSP data necessary for appropriate Medicare claim payment, hospice 
election, MA plan elections and enrollment, End Stage Renal Disease 
(ESRD) entitlement, historic and current listing of residences, and 
Medicare eligibility and Managed Care institutional status.

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

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 MBD 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 MBD. 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 provide CMS with a 
singular, authoritative, database of comprehensive data on individuals 
in the Medicare program to support ongoing and expanded program 
administration, service delivery modalities, and payment coverage 
options.
    2. Determines that:
    a. The purpose for which the disclosure is to be made can only be 
accomplished if the record is provided in individually identifiable 
form;
    b. 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
    c. 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. Modified 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 modifying/altering the routine 
use disclosures of information maintained in the system so that the 
routine uses include the following:
    1. To support agency contractors, consultants or grantees who have 
been engaged by the agency to assist in the performance of a service 
related to this system 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 certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor, consultant or grantee whatever information 
is necessary for the contractors, consultants or grantees to fulfill 
its duties. In these situations, safeguards are provided in the 
contract prohibiting the contractor, consultant or grantee from using 
or disclosing the information for any purpose other than that described 
in the contract and requires the contractor, consultant or grantee to 
return or destroy all information at the completion of the contract.
    2. To assist another Federal or State agency, agency of a State 
government,

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an agency established by State law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS' 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 MBD information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    The Internal Revenue Service may require MBD data for the 
application of tax penalties against employers and employee 
organizations that contribute to Employer Group Health Plan or Large 
Group Health Plans that are not in compliance with 42 U.S.C. 1395y(b).
    In addition, other State agencies in their administration of a 
Federal health program may require MBD information for the purpose of 
determining, evaluating and/or assessing cost effectiveness, and/or the 
quality of health care services provided in the State.
    The Railroad Retirement Board requires MBD information to 
administer provisions of the Railroad Retirement Act and Social 
Security Act relating to railroad employment and/or the administration 
of the Medicare program.
    The Social Security Administration requires MBD data to enable them 
to assist in the implementation and maintenance of the Medicare 
program.
    Disclosure under this routine use shall be used by State Medicaid 
agencies pursuant to agreements with 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 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 who 
are residents of that State.
    3. To assist providers and suppliers of services directly or 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    Providers and suppliers of services require MBD 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, 
including proper reimbursement for services provided.
    4. To assist third party contact in situations where the party to 
be contacted has, or is expected to have 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, cannot afford the cost of 
obtaining the information, 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.
    Third parties contacts require MBD 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 support Quality Improvement Organizations (QIO) in connection 
with review of claims, or in connection with studies or other review 
activities conducted pursuant to Part B of Title XI of the Act, and in 
performing affirmative outreach activities to individuals for the 
purpose of establishing and maintaining their entitlement to Medicare 
benefits or health insurance plans. As established by the Part D 
Program, QIOs will conduct reviews of prescription drug events data, or 
in connection with studies or other review activities conducted 
pursuant to Part D of Title XVIII of the Act.
    QIOs will work to implement quality improvement programs, provide 
consultation to CMS, MA-PD, PDPs, and State agencies, to assist CMS in 
prescription drug event assessments, and prepare summary information 
for release to CMS.
    QIOs will work to implement quality improvement programs, provide 
consultation to CMS, its contractors, and to State agencies. QIOs will 
assist State agencies in related monitoring and enforcement efforts, 
assist CMS and intermediaries in program integrity assessment, and 
prepare summary information for release to CMS.
    6. To other insurers, underwriters, third party administrators 
(TPAs), self-insurers, group health plans, employers, health 
maintenance organizations, health and welfare benefit funds, Federal 
agencies, a State or local government or political subdivision of 
either (when the organization has assumed the role of an insurer, 
underwriter, or third party administrator, or in the case of a State 
that assumes the liabilities of an insolvent insurers pool or fund), 
multiple-employers trusts, no-fault medical, automobile insurers, 
workers' compensation carriers plans, liability insurers, and other 
groups providing protection against medical expenses who are primary 
payers to Medicare in accordance with 42 U.S.C. 1395y(b), or any entity 
having knowledge of the occurrence of any event affecting:
    a. An individual's right to any such benefit or payment, or
    b. The initial or continued right to any such benefit or payment 
(for example, a State Medicaid Agency, State Workers' Compensation 
Board, or Department of Motor Vehicles) for the purpose of coordination 
of benefits with the Medicare program and implementation of the MSP 
provisions at 42 U.S.C. 1395y(b). The information CMS may disclose will 
be:
     Beneficiary Name
     Beneficiary Address
     Beneficiary Health Insurance Claim Number
     Beneficiary Social Security Number
     Beneficiary Gender
     Beneficiary Date of Birth
     Amount of Medicare Conditional Payment
     Provider Name and Number
     Physician Name and Number
     Supplier Name and Number
     Dates of Service

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     Nature of Service
     Diagnosis
    To administer the MSP provision at 42 U.S.C. 1395y(b) (2), (3), and 
(4) more effectively, CMS would receive (to the extent that it is 
available) and may disclose the following types of information from 
insurers, underwriters, third party administrator, self-insurers, etc.:
     Subscriber Name and Address
     Subscriber Date of Birth
     Subscriber Social Security number
     Dependent Name
     Dependent Date of Birth
     Dependent Social Security Number
     Dependent Relationship to Subscriber
     Insurer/Underwriter/TPA Name and Address
     Insurer/Underwriter/TPA Group Number
     Insurer/Underwriter/Group Name
     Prescription Drug Coverage
     Policy Number
     Effective Date of Coverage
     Employer Name, Employer Identification Number (EIN) and 
Address
     Employment Status
     Amounts of Payment
    To administer the MSP provision at 42 U.S.C. 1395y(b)(1) more 
effectively for entities such as Workers' Compensation carriers or 
boards, liability insurers, no-fault and automobile medical policies or 
plans, CMS would receive (to the extent that it is available) and may 
disclose the following information:
     Beneficiary's Name and Address
     Beneficiary's Date of Birth
     Beneficiary's Social Security Number
     Name of Insured
     Insurer Name and Address
     Type of coverage; automobile medical, no-fault, liability 
payment, or workers' compensation settlement
     Insured's Policy Number
     Effective Date of Coverage
     Date of accident, injury or illness
     Amount of payment under liability, no-fault, or automobile 
medical policies, plans, and workers' compensation settlements
     Employer Name and Address (Workers' Compensation Only)
     Name of insured could be the driver of the car, a 
business, the beneficiary (i.e., the name of the individual or entity 
which carries the insurance policy or plan)
    In order to receive this information the entity must agree to the 
following conditions:
    c. To utilize the information solely for the purpose of 
coordination of benefits with the Medicare program and other third 
party payer in accordance with Title 42 U.S.C. 1395y(b);
    d. To safeguard the confidentiality of the data and to prevent 
unauthorized access to it; and,
    e. To prohibit the use of beneficiary-specific data for the 
purposes other than for the coordination of benefits among third party 
payers and the Medicare program.
    This agreement would allow the entities to use the information to 
determine cases where they or other third party payers have primary 
responsibility for payment. Examples of prohibited uses would include 
but are not limited to: creation of a mailing list, sale or transfer of 
data.
    To administer the MSP provisions more effectively, CMS may receive 
or disclose the following types of information from or to entities 
including insurers, underwriters, TPAs, and self-insured plans, 
concerning potentially affected individuals:
     Subscriber HICN
     Dependent Name
     Funding arrangements of employer group health plans, for 
example, contributory or non-contributory plan, self-insured, re-
insured, HMO, TPA insurance
     Claims payment information, for example, the amount paid, 
the date of payment, the name of the insurers or payer
     Dates of employment including termination date, if 
appropriate
     Number of full and/or part-time employees in the current 
and preceding calendar years
     Employment status of subscriber, for example, full or part 
time or self-employed
    Other insurers, HMO, and Health Care Prepayment Plans may require 
MBD information in order to support evaluations and monitoring of 
Medicare claims information of beneficiaries, including proper 
reimbursement for services provided.
    1860D-23 and 1860D-24 of the Act require that the Secretary 
establish requirements for prescription drug plans (Part D plans) to 
ensure the effective coordination between a Part D plan and a State 
Pharmaceutical Assistance Program (SPAP), as well as other payers of 
prescription drug benefits, including enrollment file sharing. CMS, 
using its coordination of benefits contractor, allows this to happen by 
having payers that will be secondary to Part D submit their enrollment 
data in exchange for Part D enrollment data. The data shared is mainly 
enrollment information (date of enrollment into Part D, what Part D 
plan they are enrolled with). SPAPs, but not other payers, will also 
receive data indicating whether the beneficiary qualifies for a low-
income subsidy to pay for drug costs.
    7. To assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    The MBD data will provide for research or in support of evaluation 
projects, a broader, longitudinal, national perspective of the status 
of Medicare beneficiaries. CMS anticipates that many researchers will 
have legitimate requests to use this data in projects that could 
ultimately improve the care provided to Medicare beneficiaries and the 
policy that governs the care.
    8. To support Patient Assistance Programs and other groups 
providing pharmaceutical assistance to a Medicare beneficiary. Medicare 
Part D enrollment information may be released to these organizations 
upon specific request, and then only if they meet the following 
requirements, they must:
    a. Provide an attestation or other qualifying information that they 
are providing pharmaceutical assistance to Medicare beneficiaries;
    b. Submit a finder file to CMS to identify Medicare beneficiaries 
receiving pharmaceutical assistance and/or services consisting of the 
following data elements:
    (1) First initial of the first name,
    (2) First 6 letters of the last name,
    (3) Social security number or health insurance claims number,
    (4) Date of birth, and
    (5) Sex;
    c. Safeguard the confidentiality of any data received and prevent 
unauthorized access to the data; and,
    d. Complete a written statement attesting to the information 
recipient's understanding of and willingness to abide by CMS provisions 
regarding Privacy protections and information security. Recipients of 
CMS data must complete the PAP Data Sharing Agreement prior to the 
release of CMS data.
    Part D data maintained in the MBD that will be released to PAPs or 
a group providing pharmaceutical assistance will consist of the 
verification of Medicare status and the name of the current Part D Plan 
selected by the Medicare beneficiary.
    9. 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

[[Page 70400]]

    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.
    10. 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, waste 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, waste or 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.
    11. 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, 
waste 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, waste or abuse in such programs.
    Other agencies may require MBD information for the purpose of 
combating fraud, waste or 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 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 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 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 System of Records on Individual Rights

    CMS proposes to modify 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 information relating to individuals.

    Dated: November 24, 2006.
John R. Dyer,
Chief Operating Officer, Centers for Medicare & Medicaid Services.
System No. 09-70-0536

SYSTEM NAME:
    ``Medicare Beneficiary Database (MBD), HHS/CMS/CBC.''

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive Data.

SYSTEM LOCATION:
    The 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:
    Individuals age 65 or over who have been, or currently are, 
entitled to health insurance (Medicare) benefits under

[[Page 70401]]

Title XVIII of the Social Security Act (the Act) or under provisions of 
the Railroad Retirement Act; individuals under age 65 who have been, or 
currently are, entitled to such benefits on the basis of having been 
entitled for not less that 24 months to disability benefits under Title 
II of the Act or under the Railroad Retirement Act; individuals who 
have been, or currently are, entitled to such benefits because they 
have End-Stage Renal Disease (ESRD); individuals age 64 and 8 months or 
over who are likely to become entitled to health insurance (Medicare) 
benefits upon attaining age 65, and individuals under age 65 who have 
at least 21 months of disability benefits who are likely to become 
entitled to Medicare upon the 25th month or entitlement to such 
benefits and those populations that are dually eligible for both 
Medicare and Medicaid (Title XIX of the Act).

CATEGORIES OF RECORDS IN THE SYSTEM:
    Information maintained in the system include, but are not limited 
to: Standard data for identification such as health insurance claim 
number, social security number, gender, race/ethnicity, date of birth, 
geographic location, Medicare enrollment and entitlement information, 
MSP data necessary for appropriate Medicare claim payment, hospice 
election, MA plan elections and enrollment, End Stage Renal Disease 
(ESRD) entitlement, historic and current listing of residences, and 
Medicare eligibility and Managed Care institutional status.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM
    Authority for maintenance of the system is given under Sec. Sec.  
226, 226A, 1811, 1818, 1818A, 1831, 1833(a)(1)(A), 1836, 1837, 1838, 
1843, 1866, 1876, 1881, and 1902(a)(6) of the Act and Title 42 United 
States Code (U.S.C.) 426, 426-1, 1395c, 1395cc, 1395i-2, 1395i-2a, 
1395j, 13951, 1395mm, 1395o, 1395p, 1395q, 1395rr, 1395v, 1396a, and 
Section 101 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Pub. L. 108-173) (Regulations at 42 CFR 
Parts 403, 411, 417 and 423).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of this modified system is to provide CMS with 
a singular, authoritative, database of comprehensive enrollment data on 
individuals in the Medicare program to support ongoing and expanded 
program administration, service delivery modalities, and payment 
coverage options. This collection will contain a complete ``beneficiary 
insurance profile'' that reflects the individual's Medicare health 
insurance coverage and Medicare health plan and demonstration 
enrollment. Information retrieved from this system of records will also 
be disclosed to: (1) Support regulatory, reimbursement, and policy 
functions performed within the agency or by a contractor, consultant or 
a CMS grantee; (2) assist another Federal or State agency, agency of a 
State government, an agency established by State law, or its fiscal 
agent; (3) support providers and suppliers of services for 
administration of Title XVIII; (4) assist third parties where the 
contact is expected to have information relating to the individual's 
capacity to manage his or her own affairs; (5) support Quality 
Improvement Organizations (QIO); (6) assist other insurers for 
processing individual insurance claims; (7) facilitate research on the 
quality and effectiveness of care provided, as well as payment related 
projects; (8) support Patient Assistance Programs and other groups 
providing pharmaceutical assistance or services to Medicare 
beneficiaries; (9) support litigation involving the agency; and (10) 
combat fraud, waste, 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. 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 modifying/altering the routine 
use disclosures of information maintained in the system so that the 
routine uses include the following:
    1. To support agency contractors, consultants or grantees who have 
been engaged by the agency to assist in the performance of a service 
related to this system and who need to have access to the records in 
order to perform the activity.
    2. To assist 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' 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 assist providers and suppliers of services directly or 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    4. To assist third party contact in situations where the party to 
be contacted has, or is expected to have 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, cannot afford the cost of 
obtaining the information, 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 support Quality Improvement Organizations (QIO) in connection 
with review of claims, or in connection with studies or other review 
activities conducted pursuant to Part B of Title XI of the Act, and in 
performing affirmative outreach activities to individuals for the 
purpose of establishing and maintaining their entitlement to Medicare 
benefits or health insurance plans. As established by the Part D 
Program, QIOs will conduct reviews of prescription drug events data, or 
in connection with studies or other review activities conducted 
pursuant to Part D of Title XVIII of the Act.

[[Page 70402]]

    6. To other insurers, underwriters, third party administrators 
(TPAs), self-insurers, group health plans, employers, health 
maintenance organizations, health and welfare benefit funds, Federal 
agencies, a State or local government or political subdivision of 
either (when the organization has assumed the role of an insurer, 
underwriter, or third party administrator, or in the case of a State 
that assumes the liabilities of an insolvent insurers pool or fund), 
multiple-employers trusts, no-fault medical, automobile insurers, 
workers' compensation carriers plans, liability insurers, and other 
groups providing protection against medical expenses who are primary 
payers to Medicare in accordance with 42 U.S.C. 1395y(b), or any entity 
having knowledge of the occurrence of any event affecting;
    a. An individual's right to any such benefit or payment, or
    b. The initial or continued right to any such benefit or payment 
(for example, a State Medicaid Agency, State Workers' Compensation 
Board, or Department of Motor Vehicles) for the purpose of coordination 
of benefits with the Medicare program and implementation of the MSP 
provisions at 42 U.S.C. 1395 y(b). The information CMS may disclose 
will be:
     Beneficiary Name
     Beneficiary Address
     Beneficiary Health Insurance Claim Number
     Beneficiary Social Security Number
     Beneficiary Gender
     Beneficiary Date of Birth
     Amount of Medicare Conditional Payment
     Provider Name and Number
     Physician Name and Number
     Supplier Name and Number
     Dates of Service
     Nature of Service
     Diagnosis
    To administer the MSP provision at 42 U.S.C. 1395 y(b)(2), (3), and 
(4) more effectively, CMS would receive (to the extent that it is 
available) and may disclose the following types of information from 
insurers, underwriters, third party administrator, self-insurers, etc.:
     Subscriber Name and Address
     Subscriber Date of Birth
     Subscriber Social Security number
     Dependent Name
     Dependent Date of Birth
     Dependent Social Security Number
     Dependent Relationship to Subscriber
     Insurer/Underwriter/TPA Name and Address
     Insurer/Underwriter/TPA Group Number
     Insurer/Underwriter/Group Name
     Prescription Drug Coverage
     Policy Number
     Effective Date of Coverage
     Employer Name, Employer Identification Number (EIN) and 
Address
     Employment Status
     Amounts of Payment
    To administer the MSP provision at 42 U.S.C. 1395y(b)(1) more 
effectively for entities such as Workers' Compensation carriers or 
boards, liability insurers, no-fault and automobile medical policies or 
plans, CMS would receive (to the extent that it is available) and may 
disclose the following information:
     Beneficiary's Name and Address
     Beneficiary's Date of Birth
     Beneficiary's Social Security number
     Name of Insured
     Insurer Name and Address
     Type of coverage; automobile medical, no-fault, liability 
payment, or workers' compensation settlement
     Insured's Policy Number
     Effective Date of Coverage
     Date of accident, injury or illness
     Amount of payment under liability, no-fault, or automobile 
medical policies, plans, and workers' compensation settlements
     Employer Name and Address (Workers' Compensation Only)
     Name of insured could be the driver of the car, a 
business, the beneficiary (i.e., the name of the individual or entity 
which carries the insurance policy or plan)
    In order to receive this information the entity must agree to the 
following conditions;
    c. To utilize the information solely for the purpose of 
coordination of benefits with the Medicare program and other third 
party payer in accordance with Title 42 U.S.C. 1395y(b);
    d. To safeguard the confidentiality of the data and to prevent 
unauthorized access to it; and
    e. To prohibit the use of beneficiary-specific data for the 
purposes other than for the coordination of benefits among third party 
payers and the Medicare program. This agreement would allow the 
entities to use the information to determine cases where they or other 
third party payers have primary responsibility for payment. Examples of 
prohibited uses would include but are not limited to; creation of a 
mailing list, sale or transfer of data.
    To administer the MSP provisions more effectively, CMS may receive 
or disclose the following types of information from or to entities 
including insurers, underwriters, TPAs, and self-insured plans, 
concerning potentially affected individuals:
     Subscriber HICN
     Dependent Name
     Funding arrangements of employer group health plans, for 
example, contributory or non-contributory plan, self-insured, re-
insured, HMO, TPA insurance
     Claims payment information, for example, the amount paid, 
the date of payment, the name of the insurers or payer
     Dates of employment including termination date, if 
appropriate
     Number of full and/or part-time employees in the current 
and preceding calendar years
     Employment status of subscriber, for example, full or part 
time or self-employed
    7. To assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    8. To support Patient Assistance Programs and other groups 
providing pharmaceutical assistance to a Medicare beneficiary. Medicare 
Part D enrollment information may be released to these organizations 
upon specific request, and then only if they meet the following 
requirements, they must:
    a. Provide an attestation or other qualifying information that they 
are providing pharmaceutical assistance to Medicare beneficiaries;
    b. Submit a finder file to CMS to identify Medicare beneficiaries 
receiving pharmaceutical assistance and/or services consisting of the 
following data elements:
    (1) First initial of the first name,
    (2) First 6 letters of the last name,
    (3) Social security number or health insurance claims number,
    (4) Date of birth,
    (5) Sex;
    c. Safeguard the confidentiality of any data received and prevent 
unauthorized access to the data; and
    d. Complete a written statement attesting to the information 
recipient's understanding of and willingness to abide by CMS provisions 
regarding Privacy protections and information security. Recipients of 
CMS data must complete the PAP Data Sharing Agreement prior to the 
release of CMS data.
    9. 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

[[Page 70403]]

    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.
    10. 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, waste or abuse in such program.
    11. 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, 
waste 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, waste 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 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 electronically.

RETRIEVABILITY:
    All Medicare records are accessible by HICN, and SSN search. This 
system supports both on-line and batch access.

SAFEGUARDS:
    CMS has safeguards in place for authorized users and monitors such 
users to ensure against 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.

RETENTION AND DISPOSAL:
    Records are maintained in the active files for a period of 15 
years. The records are then retired to archival files maintained at the 
Health Care Data Center. 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 Enrollment and Eligibility Policy, Medicare 
Enrollment and Appeals Group, Center for Beneficiary Choices, CMS, Mail 
Stop S1-05-06, 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, date of 
birth, and gender, and for verification purposes, the subject 
individual's name (woman's maiden name, if applicable), and 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 specify the 
record contents being sought. (These procedures are in accordance with 
department regulation 45 CFR 5b.5(a)(2).)

CONTESTING RECORDS PROCEDURES:
    The subject individual should contact the system manager named 
above, and reasonably identify the records 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.)

RECORDS SOURCE CATEGORIES:
    The data contained in this system of records are extracted from 
other CMS systems of records: Enrollment Database, Medicare Advantage 
Prescription Drug System, and the Medicaid Statistical Information 
System. Information will also be provided from the application 
submitted by the individual through State Medicaid agencies, the Social 
Security Administration and through other entities assisting 
beneficiaries.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
 [FR Doc. E6-20408 Filed 12-1-06; 8:45 am]
BILLING CODE 4120-03-P