Privacy Act of 1974; Report of Modified or Altered System, 47190-47196 [2011-19803]

Agencies

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

[Federal Register Volume 76, Number 150 (Thursday, August 4, 2011)]
[Notices]
[Pages 47190-47196]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19803]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Privacy Act of 1974; Report of Modified or Altered System

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

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

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, we are proposing to modify or alter a SOR titled, ``Medicare 
Advantage Prescription Drug (MARx) System, No. 09-70-4001,'' last 
modified at 70 FR 60530 (October 18, 2005). CMS proposes to broaden the 
data collected and stored by this system as part of a redesign and 
modernization of the MARx System. On December 8, 2003, Congress passed 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) (Pub. L. 108-173). MMA amended the Social Security Act (the 
Act) by adding the Medicare Part D Program under Title XVIII and 
mandated that CMS establish a voluntary Medicare prescription drug 
benefit program effective January 1, 2006. Under the Medicare Part D 
benefit, the Act allows Medicare payment to plans that contract with 
CMS to provide qualified Part D prescription drug coverage as described 
in 42 Code of Federal Regulations (CFR) 423.401. The MARx System 
processes all enrollment/disenrollment transactions associated with the 
Part D program.
    The modified MARx System will accept and store Health Plan-supplied 
beneficiary residence addresses on an initial Part C and/or Part D 
enrollment or a subsequent record update transaction from the Plan. The 
main source of beneficiary residence address is the Social Security 
Administration (SSA). The address SSA provides, however, may not be the 
beneficiary's residence address. Beneficiary addresses are initially 
provided by SSA from the beneficiary's enrollment in Part A and/or Part 
B, and frequently reflect an address of a representative payee or a 
Post Office (P.O.) Box, not the residence of the beneficiary. This 
limits the effectiveness of geographically-sensitive Plan payment 
decisions. Plans have more accurate beneficiary address information, 
which is updated on a case-by-case basis. CMS wishes to allow this data 
to be transmitted in initial enrollment and subsequent record update 
transactions from the Plans, and additionally translated into valid 
residence address State and County Codes for subsequent use in service 
area determination. Support for Plan-supplied residence address will 
improve the accurate application of geographically sensitive rates in 
Plan payment calculation. The Plan-supplied beneficiary residence 
address will be updated and saved with the beneficiary's enrollment 
data in the MARx System. The residence address provided by the Plan 
will only apply to periods when the beneficiary is enrolled in that 
Plan.
    We propose to modify existing routine use number 1 that permits 
disclosure to agency contractors and consultants to include disclosure 
to CMS grantees who perform a task for the agency. CMS grantees, 
charges with completing projects or activities that require CMS data to 
carry out that activity, are classified separate from CMS contractors 
and/or consultants. The modified routine use will remain as routine use 
number 1. We will delete routine use number 7 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.
    We will broaden the scope of published routine uses number 8 and 9, 
authorizing disclosures to combat fraud and abuse in the Medicare and 
Medicaid programs to include combating ``waste'' which refers to 
specific beneficiary/recipient practices that result in unnecessary 
cost to all Federally-funded health benefit programs. We will add a new 
routine use authorizing disclosure of individually identifiable 
information to assist in efforts to respond to a suspected or confirmed 
breach of the security or confidentiality of information maintained in 
these systems of records.
    We are modifying the language in the remaining routine uses to 
provide a proper explanation as to the need for the routine use and to 
provide clarity to CMS's intention to disclose individual-specific 
information contained in this system. The routine uses will then be 
prioritized and reordered according to their usage. We will also take 
the opportunity to update language in the administrative sections to 
correspond with language used in other CMS SORs. 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 information in the Health 
Care Financing Administration systems of records. The new assigned 
identifying number for this system should read: System No. 09-70-0588.
    The primary purpose of the SOR is to maintain a master file of 
Medicare Advantage (MA) and Medicare Advantage Prescription Drug (MA-
PD) plan members for accounting and payment control; expedite the 
exchange of data with MA and MA-PD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled

[[Page 47191]]

MA members; and track participation of the prescription drug benefits 
provided under prescription drug plans (PDPs) and Medicare employer 
plans. Information in this system is disclosed to: (1) Support 
regulatory, reimbursement, and policy functions performed by a 
contractor, consultant, or CMS grantee contracted by the Agency; (2) 
support another Federal or State agency, agency of a state government, 
an agency established by state law, or its fiscal agent; (3) assist 
providers and suppliers of service directly or dealing through 
contractors, fiscal intermediaries (FI) or carriers for the 
administration of Title XVIII Medicaid state agency; (4) assist third 
party contacts 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; (5) assist insurance companies, third party 
administrators, employers, self-insurers, managed care organizations, 
and other supplemental insurers; (6) facilitate research on the quality 
and effectiveness of care provided, as well as payment-related 
projects; (7) support litigation involving the Agency; (8) combat fraud 
and abuse in certain health benefits programs, and (9) assist in a 
response to a suspected or confirmed breach of the security or 
confidentiality of information. CMS has 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 Governmental Affairs, 
and the Administrator, Office of Information and Regulatory Affairs, 
Office of Management and Budget (OMB) on July 28, 2011. To ensure that 
all parties have adequate time in which to comment, the modified or 
altered SOR, including routine uses, will become effective 40 days from 
the publication of the notice, or from the date it was submitted to OMB 
and the Congress, whichever is later, unless CMS receives comments that 
require alterations to this notice.

ADDRESSES: The public should address comments to: CMS Privacy Officer, 
Division of Information Security & Privacy Management (DISPM), CMS, 
Room N1-24-08, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. 
Comments received will be available for review at this location, by 
appointment, during regular business hours, Monday through Friday from 
9 a.m.-3 p.m., Eastern daylight time.

FOR FURTHER INFORMATION CONTACT: Ronald Graham, Director, Division of 
MA & Part D Application Analysis, Information Services Design and 
Development Group, Office of Information Services, CMS, Room N3-18-07, 
7500 Security Boulevard, Baltimore, Maryland 21244-1850. The telephone 
number is 410-786-1513.

SUPPLEMENTARY INFORMATION: CMS will redesign and modernize the MARx 
System to simplify the data model, modernize the design to build 
independent component services, and align the system processes to the 
business cycle. Taking a business-centric approach to the design of 
this system will better meet customer and CMS needs while reducing 
maintenance costs. This will provide CMS with a more flexible system 
able to respond to changing and evolving programmatic needs with 
greater immediacy than is possible today with the legacy MARx design.
    The redesign and modernization of the MARx System will provide 
enhanced Medicare Part C and Part D functionality to improve processing 
efficiencies and better support current and future business needs to: 
(1) Receive, validate and disseminate data for beneficiary membership 
in Part C and Part D Plans; (2) Calculate and disseminate beneficiary 
premium amounts, including dissemination to premium withholding 
agencies; and (3) Calculate and disseminate Plan payment amounts.

I. Description of the Modified System of Records

A. Statutory and Regulatory Basis for the System

    Authority for maintenance of the system is given under Section 101 
of the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (MMA) (Pub. L. 108-173) amended the Title XVIII of the Social 
Security Act. Authority for maintenance of the system is also given 
under the provisions of Sec. Sec.  1833(a)(1)(A), 1860, 1866, and 1876 
of Title XVIII of the Act (42 U.S.C. 1395(A)(1)(a), 1395cc, and 
1395mm).

B. Collection and Maintenance of Data in the System

    The system includes information on recipients of Medicare hospital 
insurance (Part A), Medicare medical insurance (Part B), and recipients 
of the Prescription Drug Benefits Program (Part D) enrolled in the 
Medicare Advantage (MA) Program (Part C). The system also includes 
information about a beneficiary's entitlement to Medicare benefits and 
enrollment in Medicare Programs, prescription drug coverage and 
supplementary medical claims information. The system collects 
identifying information such as beneficiary name, health insurance 
claim number (HICN), social security number, and other demographic 
information such as residence address.

II. Agency Policies, Procedures, and Restrictions on Routine Uses

    A. 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 MARx 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.
    CMS will only collect the minimum personal data necessary to 
achieve the purpose of MARx. CMS has the following policies and 
procedures concerning disclosures of information that will be 
maintained in the system. Disclosure of information from the SOR will 
be approved only to the extent necessary to accomplish the purpose of 
the disclosure and only after CMS:
    1. Determines that the use or disclosure is consistent with the 
reason data is being collected; e.g., maintain a master file of MA and 
MA-PD plan members for accounting and payment control; expedite the 
exchange of data with MA and MA-PD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled MA members; and 
track participation of the prescription drug benefits provided under 
private prescription drug plans and Medicare employer plans.
    2. Determines that the purpose for which the disclosure is to be 
made can only be accomplished if the record is provided in individually 
identifiable form;
    a. The purpose for which the disclosure is to be made is of 
sufficient importance to warrant the effect and/or risk on the privacy 
of the individual that additional exposure of the record might bring; 
and

[[Page 47192]]

    b. There is a strong probability that the proposed use of the data 
would in fact accomplish the stated purpose(s).
    3. Requires the information recipient to:
    a. Establish administrative, technical, and physical safeguards to 
prevent unauthorized use of disclosure of the record;
    b. Remove or destroy at the earliest time all patient-identifiable 
information; and
    c. Agree to not use or disclose the information for any purpose 
other than the stated purpose under which the information was 
disclosed.
    4. Determines that the data are valid and reliable.

III. Proposed Routine Use Disclosures of Data in the System

A. Entities Who May Receive Disclosures Under Routine Use

    These routine uses specify circumstances, in addition to those 
provided by statute in the Privacy Act of 1974, under which CMS may 
release information from the MARx without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected. CMS is not proposing 
to establish any new or modify any of the following existing routine 
use disclosures of information maintained in the system as part of the 
redesign and modernization of the MARx System:
    1. To Agency contractors, consultants, or CMS grantees that have 
been contracted by the Agency to assist in accomplishment of a CMS 
function relating to the purposes for this system and who need access 
to the records in order to assist CMS.
    CMS contemplates disclosing information under this routine use only 
in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing a CMS function 
relating to purposes for this system.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor, consultant, or CMS grantees 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, consultant, or CMS grantees from 
using or disclosing the information for any purpose other than that 
described in the contract and requires the contractor, consultant, or 
CMS grantees to return or destroy all information at the completion of 
the contract.
    2. To another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    Other Federal or state agencies in their administration of a 
Federal health program may require MARx information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    Disclosure under this routine use shall be used by state Medicaid 
agencies pursuant to agreements with the HHS for determining Medicaid 
and Medicare eligibility, for quality control studies, for determining 
eligibility of recipients of assistance under Titles IV, XVIII, and XIX 
of the Act, and for the administration of the Medicaid program. Data 
will be released to the state only on those individuals who are 
patients under the services of a Medicaid program within the state or 
who are residents of that state.
    CMS also contemplates disclosing information under this routine use 
in situations in which state auditing agencies require MARx information 
for auditing state Medicaid eligibility considerations. CMS may enter 
into an agreement with state auditing agencies to assist in 
accomplishing functions relating to purposes for this system to 
providers and suppliers of services directly or through fiscal 
intermediaries or carriers for the administration of Title XVIII of the 
Act.
    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 MARx 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 third party contacts 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 exist, or the custodian 
of the information will not, as a matter of policy, provide it to the 
individual), or
    b. The data are needed to establish the validity of evidence or to 
verify the accuracy of information presented by the individual, and it 
concerns one or more of the following: The individual's entitlement to 
benefits under the Medicare program, the amount of reimbursement, and 
in cases in which the evidence is being reviewed as a result of 
suspected fraud and abuse, program integrity, quality appraisal, or 
evaluation and measurement of activities.
    Third party contacts require MARx information in order to provide 
support for the individual's entitlement to benefits under the Medicare 
program; to establish the validity of evidence or to verify the 
accuracy of information presented by the individual, and assist in the 
monitoring of Medicare claims information of beneficiaries, including 
proper reimbursement of services provided.
    5. To insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations 
(HMOs) or a competitive medical plan with a Medicare contract, or a 
Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be

[[Page 47193]]

limited to Medicare entitlement data. In order to receive the 
information, they must agree to:
    a. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    b. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    Other insurers, TPAs, HMOs, and HCPPs may require MARx information 
in order to support evaluations and monitoring of Medicare claims 
information of beneficiaries, including proper reimbursement for 
services provided.
    6. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    MARx data will provide for research, evaluation, and 
epidemiological projects, a broader, longitudinal, national perspective 
of the status of Medicare beneficiaries. CMS anticipates that many 
researchers will have legitimate requests to use these data in projects 
that could ultimately improve the care provided to Medicare 
beneficiaries and the policy that governs the care.
    7. To 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, or occasionally when 
another party is involved in litigation and CMS's policies or 
operations could be affected by the outcome of the litigation, CMS 
would be able to disclose information to the DOJ, court, or 
adjudicatory body involved.
    8. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a CMS grantee of a CMS-administered 
grant program, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    CMS contemplates disclosing information under this routine use only 
in situations in which CMS may enter into a contract or grant with a 
third party to assist in accomplishing CMS functions relating to the 
purpose of combating fraud and abuse.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor or CMS grantee whatever information is 
necessary for the contractor or CMS grantee to fulfill its duties. In 
these situations, safeguards are provided in the contract prohibiting 
the contractor or CMS grantee from using or disclosing the information 
for any purpose other than that described in the contract and requiring 
the contractor or CMS 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 MARx information for the purpose of 
combating fraud and abuse in such Federally-funded programs.
    10. To appropriate Federal agencies, Department officials and 
Agency contractors that need access to identifiable information to 
provide assistance to the Department's efforts to respond to a 
suspected or confirmed breach of the security or confidentiality of 
information. In order to receive the information, CMS must:
    a. Determines that the use or disclosure does not violate legal 
limitations under which the record was provided, collected, or 
obtained;
    b. Determines that the purpose for which the disclosure is to be 
made:
    (1) Cannot be reasonably accomplished unless the record is provided 
in individually identifiable form,
    (2) 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
    (3) There is reasonable probability that the objective for the use 
would be accomplished;
    c. Requires the recipient of the information to:
    (1) establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized use or disclosure of the record, and
    (2) remove or destroy the information that allows the individual to 
be identified at the earliest time at which removal or destruction can 
be accomplished consistent with the purpose of the disclosure, and
    (3) Make no further use or disclosure of the record except:
    (a) In emergency circumstances affecting the health or safety of 
any individual, or
    (b) When required by law;
    d. Secures a written statement attesting to the information 
recipient's understanding of and willingness to abide by these 
provisions and complete a Data Use Agreement (CMS Form 0235) in 
accordance with current CMS policies.
    Other Federal agencies and contractors may require MARx information 
for the purpose of assisting in a respond to a suspected or confirmed 
breach of the security or confidentiality of information.

B. Additional Circumstances Affecting Routine Use Disclosures

    This system contains Protected Health Information as defined by HHS 
regulation ``Standards for Privacy of Individually Identifiable Health 
Information'' (45 CFR parts 160 and 164, 65 FR 82462 (12-28-00), 
Subparts A and E. The protected health information is collected from 
the Plan during the enrollment process and passed onto the Medicare 
Beneficiary Database. These elements include the Beneficiary Name, Sex, 
Date of Birth, and Health Insurance Claim Number. Disclosures of 
Protected Health Information authorized by these routine uses may only 
be made if, and as, permitted or required by the ``Standards for 
Privacy of Individually Identifiable Health Information.''
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if CMS determines 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

[[Page 47194]]

enrollees could, because of the small size, use this information to 
deduce the identity of the beneficiary).

IV. Safeguards

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

V. Effects of the Modified System 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. CMS will only 
disclose the minimum personal data necessary to achieve the purpose of 
MARx. Disclosure of information from the system will be approved only 
to the extent necessary to accomplish the purpose of the disclosure. 
CMS has assigned a higher level of security clearance for the 
information maintained in this system in an effort to provide added 
security and protection of data in this system.
    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. 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: July 28, 2011.
Michelle Snyder,
Deputy Chief Operating Officer, Centers for Medicare & Medicaid 
Services.
SYSTEM NO. 09-70-0588

SYSTEM NAME:
    ``Medicare Advantage Prescription Drug (MARx)'' System HHS/CMS/CM.

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive.

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

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    The system includes information on recipients of Medicare hospital 
insurance (Part A) and Medicare medical insurance (Part B), and 
recipients of the Prescription Drug Benefits Program (Part D) enrolled 
in the Medicare Advantage (MA) Program .

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system includes information about a beneficiary's entitlement 
to Medicare benefits and enrollment in Medicare Programs, prescription 
drug coverage and supplementary medical claims information. The system 
contains identifying information such as beneficiary name, health 
insurance claim number, social security number, and other demographic 
information.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under Section 101 
of the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (MMA) (Pub. L. 108-173), which amended the Title XVIII of the 
Social Security Act. Authority for maintenance of the system is also 
given under the provisions of Sec. Sec.  1833(a)(1)(A), 1860D-1 to D-
43, 1866, and 1876 of Title XVIII of the Act (42 U.S.C. 1395(A)(1)(a), 
1395w-101 to 1395w-153, 1395cc, and 1395mm).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of the SOR is to maintain a master file of 
Medicare Advantage (MA) and Medicare Advantage Prescription Drug (MA-
PD) plan members for accounting and payment control; expedite the 
exchange of data with MA and MA-PD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled MA members; and 
track participation of the prescription drug benefits provided under 
prescription drug plans (PDPs) and Medicare employer plans.. 
Information in this system is disclosed to: (1) Support regulatory, 
reimbursement, and policy functions performed by a contractor, 
consultant, or CMS grantee contracted by the Agency; (2) support 
another Federal or State agency, agency of a state government, an 
agency established by state law, or its fiscal agent; (3) assist 
providers and suppliers of service directly or dealing through 
contractors, fiscal intermediaries (FI) or carriers for the 
administration of Title XVIII (4) assist third party contacts 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; (5) assist insurance companies, third party administrators, 
employers, self-insurers, managed care organizations, and other 
supplemental insurers; (6) facilitate research on the quality and 
effectiveness of care provided, as well as payment-related projects; 
(7) support litigation involving the Agency; (8) combat fraud, waste, 
and abuse in certain health benefits programs, and (9) assist in a 
response to a suspected or confirmed breach of the security or 
confidentiality of information.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OR USERS AND THE PURPOSES OF SUCH USES:
    B. Entities Who May Receive Disclosures Under Routine Use.
    These routine uses specify circumstances, in addition to those 
provided by statute in the Privacy Act of 1974, under which CMS may 
release information from the MARx without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected.
    1. To Agency contractors, consultants, or CMS grantees that have 
been contracted by the Agency to assist in

[[Page 47195]]

accomplishment of a CMS function relating to the purposes for this 
system and who need access to the records in order to assist CMS.
    5. To another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    6. To assist providers and suppliers of services directly or 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    7. To third party contacts 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,
    b. 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
    d. 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.
    6. To insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations 
(HMOs) or a competitive medical plan with a Medicare contract, or a 
Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be limited to Medicare 
entitlement data. In order to receive the information, they must agree 
to:
    e. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    f. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    g. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    11. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    12. 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.
    13. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a CMS 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 programs.
    14. 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.
    15. To assist appropriate Federal agencies and Department 
contractors that have a need to know the information for the purpose of 
assisting the Department's efforts to respond to a suspected or 
confirmed breach of the security or confidentiality of information 
maintained in this system of records, and the information disclosed is 
relevant and necessary for the assistance. In order to receive the 
information, CMS must:
    a. Determines that the use or disclosure does not violate legal 
limitations under which the record was provided, collected, or 
obtained;
    b. Determines that the purpose for which the disclosure is to be 
made:
    (1) Cannot be reasonably accomplished unless the record is provided 
in individually identifiable form,
    (2) 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
    (3) there is reasonable probability that the objective for the use 
would be accomplished;
    c. Require the recipient of the information to:
    (1) establish reasonable administrative, technical, and physical 
safeguards to prevent unauthorized use or disclosure of the record, and
    (2) remove or destroy the information that allows the individual to 
be identified at the earliest time at which removal or destruction can 
be accomplished consistent with the purpose of the disclosure, and
    (3) Make no further use or disclosure of the record except:
    (a) In emergency circumstances affecting the health or safety of 
any individual, or
    (b) When required by law.
    d. Secure a written statement attesting to the information 
recipient's understanding of and willingness to abide by these 
provisions and complete a Data Use Agreement (CMS Form 0235) in 
accordance with current CMS policies.

C. Additional Circumstances Affecting Routine Use Disclosures
    This system contains Protected Health Information as defined by HHS

[[Page 47196]]

regulation ``Standards for Privacy of Individually Identifiable Health 
Information'' (45 CFR Parts 160 and 164, 65 Fed. Reg. 82462 (12-28-00), 
Subparts A and E. The protected health information is collected from 
the Plan during the enrollment process and passed onto the Medicare 
Beneficiary Database. These elements include the Beneficiary Name, Sex, 
Date of Birth, and Health Insurance Claim Number. Disclosures of 
Protected Health Information authorized by these routine uses may only 
be made if, and as, permitted or required by the ``Standards for 
Privacy of Individually Identifiable Health Information.''
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if CMS determines 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:
    Magnetic storage media.

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

SAFEGUARDS:
    CMS has safeguards in place for authorized users and monitors such 
users to ensure against excessive or unauthorized use. Personnel having 
access to the system have been trained in the Privacy Act and 
information security requirements. Employees who maintain records in 
this system are instructed not to release data until the intended 
recipient agrees to implement appropriate management, operational and 
technical safeguards sufficient to protect the confidentiality, 
integrity and availability of the information and information systems 
and to prevent unauthorized access.
    This system will conform to all applicable Federal laws and 
regulations and Federal, HHS, and CMS policies and standards as they 
relate to information security and data privacy. These laws and 
regulations include but are not limited to: The Privacy Act of 1974; 
the Federal Information Security Management Act of 2002; the Computer 
Fraud and Abuse Act of 1986; the Health Insurance Portability and 
Accountability Act of 1996; the E-Government Act of 2002, the Clinger-
Cohen Act of 1996; the Medicare Modernization Act of 2003, and the 
corresponding implementing regulations. OMB Circular A-130, Management 
of Federal Resources, Appendix III, Security of Federal Automated 
Information Resources also applies. Federal, HHS, and CMS policies and 
standards include but are not limited to: All pertinent 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 with identifiers for all transactions after 
they are entered into the system for a period of 6 years and 3 months. 
Records are housed in both active and archival files. All claims-
related records are encompassed by the document preservation order and 
will be retained until notification is received from the Department of 
Justice.

SYSTEM MANAGER AND ADDRESS:
    Director, Division of MA & Part D Application Analysis, Information 
Services Design and Development Group, Office of Information Services, 
CMS.

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

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

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

RECORD SOURCE CATEGORIES:
    Data for this system is collected from MAs, MA-PDs, and PDPs (which 
obtained the data from the individuals concerned); Social Security 
Administration; and the Medicare Beneficiary Database, 1-800 Medicare 
Choice, and Health Plan Management System.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. 2011-19803 Filed 8-3-11; 8:45 am]
BILLING CODE 4120-03-P