[Federal Register Volume 67, Number 15 (Wednesday, January 23, 2002)]
[Notices]
[Pages 3203-3210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1526]


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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 (CMS) (formerly the 
Health Care Financing Administration), 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, CMS is proposing to modify or alter an SOR, ``Health Insurance 
Master Record (HIMR),'' System No. 09-70-0502. CMS is reorganizing its 
databases because of the amount of information it collects to 
administer the Medicare program. We are proposing to amend the purpose 
of the HIMR to include maintaining enrollment data without utilization 
data and change the name from the HIMR to read the ``Enrollment 
Database (EDB)'' to reflect this amended purpose. The only data in the 
HIMR, which are not in the EDB, are the utilization and bill processing 
data. Since the EDB will now maintain enrollment-related data, all 
utilization data for bill payment record processing will now be 
maintained in the ``Common Working File (CWF),'' System No. 09-70-0526. 
With this reorganization of databases, CMS is deleting, in a separate 
notice, the following SOR: ``Medicare Enrollment Records Statistics 
(MERS),'' System No. 09-70-0006, and the ``Health Insurance Enrollment 
Statistics, General Enrollment Period (HIES),'' System No. 09-70-0007. 
These 2 systems are being deleted because their enrollment purpose is 
being subsumed into the EDB. The EDB does maintain data regarding 
direct billing for Medicare premiums.
    The security classification previously reported as ``None'' will be 
modified to reflect that data in this system are considered to be 
``Level Three Privacy Act Sensitive.'' We propose to delete published 
routine uses number 1 authorizing disclosures to the Railroad 
Retirement Board (RRB), number 2 authorizing disclosures to state 
welfare departments, number 3 authorizing disclosures to state audit 
agencies, number 8 authorizing disclosure to contractors, number 9 
authorizing disclosures to state welfare agencies, number 12 
authorizing disclosures to contractors, number 13 authorizing 
disclosures to agencies of a state government, number 14 authorizing 
disclosures to group health plans, number 15 authorizing disclosures to 
contractors, number 16 authorizing disclosures for Medicare Secondary 
Payer (MSP) utilization purposes, number 17 authorizing disclosures to 
the Internal Revenue Service (IRS), and an unnumbered routine use 
authorizing disclosure to the Social Security Administration (SSA).
    Disclosures allowed by routine uses number 1, 2, 3, 13, 17, and to 
the SSA will be covered by a new routine use to permit release of 
information to ``another Federal and/or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent.'' 
The proposed routine use for contractors and consultants makes material 
changes to published routine uses number 8, 12, and 15, and as proposed 
should be treated as a new routine use. The proposed routine use for 
``other insurers and group health plans'' makes material changes to 
published routine uses number 11, and 14, and as proposed should be 
treated as a new routine use. Routine use number 9 is being deleted 
because the information pertaining to Beneficiary State File and 
Carrier Alphabetical State File, is no longer maintained in the EDB. 
Routine use number 16 is also being deleted because the information 
listed in the routine use as being releasable for MSP utilization 
purposes is not maintained in the EDB.
    We are modifying the language in the remaining routine uses to 
provide clarity to CMS intention to disclose individual-specific 
information contained in this system. The routine uses will then be 
prioritized and reordered according to their usage. We will also take 
this opportunity to update any sections of this SOR that were affected 
by the recent reorganization and to modify language in the 
administrative sections to correspond with language used in other CMS 
SORs.
    The primary purpose of the SOR is to maintain information on 
Medicare enrollment for the administration of the Medicare program, 
including the following functions: ensuring proper Medicare enrollment, 
claims payment,

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Medicare premium billing and collection, coordination of benefits by 
validating and verifying the enrollment status of beneficiaries, and 
validating and studying the characteristics of persons enrolled in the 
Medicare program including their requirements for information. 
Information retrieved from this SOR will also be disclosed to: (1) 
Support regulatory, reimbursement, and policy functions performed 
within the Agency or by a contractor or consultant; (2) another Federal 
or state agency, agency of a state government, an agency established by 
state law, or its fiscal agent; (3) providers and suppliers of services 
for administration of Title XVIII of the Act; (4) third parties where 
the contact is expected to have information relating to the 
individual's capacity to manage his or her own affairs; (5) Peer Review 
Organizations; (6) other insurers for processing individual insurance 
claims; (7) facilitate research on the quality and effectiveness of 
care provided, as well as payment-related and epidemiological projects; 
(8) support constituent requests made to a congressional 
representative; (9) support litigation involving the Agency; and (10) 
combat fraud 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 proposed routine uses, CMS invites comments on all 
portions of this notice. See ``Effective Dates'' section for comment 
period.

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 Governmental Affairs, and the 
Administrator, Office of Information and Regulatory Affairs, Office of 
Management and Budget (OMB) on January 15, 2002. We will not disclose 
any information under a routine use until 30 days after publication. We 
may defer implementation of this SOR 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: Director, Division of 
Data Liaison and Distribution, CMS, Mail-stop N2-04-27, 7500 Security 
Boulevard, Baltimore, Maryland 21244-1850. Comments received will be 
available for review at this location, by appointment, during regular 
business hours, Monday through Friday from 9 a.m. -3 p.m., eastern 
daylight time.

FOR FURTHER INFORMATION CONTACT: Bob Donnelly, Director, Health Plan 
Policy Group, Center for Beneficiary Choices, CMS, 7500 Security 
Boulevard, Mail Stop C4-25-02, Baltimore, Maryland 21244-1850. The 
telephone number is (410) 786-0629.

SUPPLEMENTARY INFORMATION:

I. Description of the Modified System

A. Background

    The HIMR, which will be renamed the EDB, was established in 1965 to 
maintain accurate and complete data on Medicare enrollment, 
entitlement, and utilization. Notice of the modification to this 
system, HIMR, was published in the Federal Register (FR) at 55 FR 
37549, (Dec. 18, 1990); 61 FR 6645 (Feb. 21, 1996) (added unnumbered 
social security use); 63 FR 38414 (July 16, 1998) (added three fraud 
and abuse uses); and 65 FR 50552 (Aug. 18, 2000) (deleted one and 
modified two fraud and abuse uses). MERS, was established to study the 
characteristics of persons enrolled in the Medicare program and 
establish the basis for Medicare services utilization rates. MERS is 
being deleted and the EDB will take over its enrollment purpose. HIES, 
was established to contact persons eligible for Part B benefits who had 
refused or withdrawn coverage of these benefits, for purposes of re-
enrollment for Part B coverage and to evaluate results of such 
contacts. This system is also being deleted, and its enrollment purpose 
is being subsumed by the EDB. Utilization data from both will continue 
to be maintained in the CWF.
    Since these systems were established, the amount of enrollment 
information CMS collects to administer the Medicare program has vastly 
increased. To be of maximum use, the data must be organized and 
categorized into a comprehensive system. This redesign of CMS's 
databases will result in changes to the collection, aggregation, and 
analysis of Medicare information. Changes in the way CMS processes its 
enrollment data are being dramatically affected by the database 
redesign activity. These changes are necessary to accomplish two major 
initiatives:
     Enrollment-related data will be processed at the CMS Data 
Center and not at the SSA National Computer Center;
     Enrollment-related data will be consolidated in one file 
from various sources.
    The EDB is being created to serve as a shared data resource by all 
CMS information systems. Once the EDB is established, it will be the 
authoritative source of Medicare enrollment related information. It 
will identify, in the same manner as the HIMR did, each person 
currently or previously entitled to Medicare benefits based upon age, 
disability, or end-stage Renal Disease (ESRD) under Title XVIII of the 
Act or under provisions of the Railroad Retirement Act, and will also 
identify whether a person is currently covered or was previously 
covered for hospital insurance benefits (Part A), medical insurance 
benefits (Part B), or both.
    Given these changes, the purpose statement of the EDB system must 
be amended to reflect its current function of maintaining enrollment 
data without utilization data. The amended purpose of the EDB will read 
as follows: ``To maintain information on Medicare enrollment for the 
administration of the Medicare program, including the following 
functions: ensuring proper Medicare enrollment, claims payment, 
Medicare premium billing and collection, coordination of benefits by 
validating and verifying the enrollment status of beneficiaries, and 
validating and studying the characteristics of persons enrolled in the 
Medicare program.''

B. Statutory and Regulatory Basis for SOR

    Authority for maintenance of the system is given under sections 
226, 226A, 1811, 1818, 1818A, 1831, 1836, 1837, 1838, 1843, 1876, and 
1881 of the Social Security Act (the Act) and Title 42 Code of Federal 
Regulations (CFR), parts 406, 407, 408, 411 and 424.
    Authority for maintenance of the system section 1862 of the Act was 
a published authority in the published SOR. We included section 1862 in 
the modified SOR since we do maintain a limited number of data elements 
in the EDB pertaining to MSP.
    Authority for maintenance of the system section 1870 of the Act was 
included in the modified system since the EDB does maintain data 
regarding direct billing for Medicare premiums. Section 1870 (g) 
describes refunding these premiums.

II. Collection and Maintenance of Date in the System

A. Scope of the Data Collected

    The system contains information related to Medicare enrollment and 
entitlement and MSP data containing other party liability insurance 
information necessary for appropriate Medicare claim payment. It 
contains hospice election, premium billing and collection, direct 
billing information, and group health plan enrollment data. The system 
also contains the

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individual's health insurance numbers, name, geographic location, race/
ethnicity, sex, and date of birth.
    Information is collected on individuals age 65 or over who have 
been, or currently are, entitled to health insurance (Medicare) 
benefits under Title XVIII of 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 than 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 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 of their being disabled.

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

    The Privacy Act permits us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such disclosure of data is known as a ``routine use.'' 
The government will only release EDB 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 disclose the minimum personal data necessary to 
achieve the purpose of EDB. 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., ensuring proper enrollment, 
establishing the validity of individual's entitlement to benefits, 
verifying the accuracy of information presented by the individual, 
insuring proper reimbursement for services provided, claims payment, 
and coordination of benefits provided to patients.
    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. 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 EDB without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected. We are proposing to 
establish or modify the following routine use disclosures of 
information maintained in the system:
    1. To Agency contractors, or consultants who have been contracted 
by the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this SOR and who need to have access to the records in 
order to assist CMS.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing a CMS function 
relating to purposes for this SOR.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor or consultant whatever information is 
necessary for the contractor or consultant to fulfill its duties. In 
these situations, safeguards are provided in the contract prohibiting 
the contractor or consultant from using or disclosing the information 
for any purpose other than that described in the contract and requires 
the contractor or consultant to return or destroy all information at 
the completion of the contract.
    2. To 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 EDB information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided;
    The IRS may require EDB 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 EDB information for the purposes of 
determining, evaluating and/or assessing cost, effectiveness, and /or 
the quality of health care services provided in the state;
    The RRB requires EDB information to administer provisions of the 
Railroad Retirement Act relating to railroad employment and/or the 
administration of the Medicare program;
    SSA requires EDB data 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 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;

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    We also contemplate disclosing information under this routine use 
in situations in which state auditing agencies require EDB 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 SOR.
    3. To providers and suppliers of services directly or through 
fiscal intermediaries (FIs) or carriers for the administration of Title 
XVIII of the Act.
    Providers and suppliers of services require EDB 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 parties contacts require EDB 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 Peer Review Organizations (PROs) 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.
    PROs will work to implement quality improvement programs, provide 
consultation to CMS, its contractors, and to state agencies. The PROs 
will assist the 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 insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations 
(HMOs) or a competitive medical plan (CMP) with a Medicare contract, or 
a Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be limited to Medicare 
entitlement data. In order to receive the information, they must agree 
to:
    a. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    b. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    Other insurers, TPAs, HMOs, and HCPPs may require EDB information 
in order to support evaluations and monitoring of Medicare claims 
information of beneficiaries, including proper reimbursement for 
services provided.
    7. 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.
    EDB 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.
    8. To a Member of Congress or to a congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    Beneficiaries sometimes request the help of a Member of Congress in 
resolving an issue relating to a matter before CMS. The Member of 
Congress then writes CMS, and CMS must be able to give sufficient 
information to be responsive to the inquiry.
    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
    c. Any employee of the Agency in his or her individual capacity 
where the DOJ has agreed to represent the employee, or
    d. The United States Government,

is a party to litigation or has an interest in such litigation, and by 
careful review, CMS determines that the records are both relevant and 
necessary to the litigation.
    Whenever CMS is involved in litigation, or occasionally when 
another party is involved in litigation and CMS's policies or 
operations could be affected by the outcome of the litigation, CMS 
would be able to disclose information to the DOJ, court, or 
adjudicatory body involved.
    10. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a grantee of a CMS-administered grant 
program, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contract or grant with a 
third party to assist in accomplishing CMS functions relating to the 
purpose of combating fraud and abuse.
    CMS occasionally contracts out certain of its functions when doing 
so

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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 
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 EDB information for the purpose of 
combating fraud and abuse in such Federally funded programs. Additional 
Circumstances Affecting Routine Use Disclosure

B. Additional Circumstances Affecting Routine Use Disclosures

    This SOR 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), as 
amended by 66 FR 12434 (2-26-01)). 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 non-
identifiable data, except pursuant to one of the routine uses, if there 
is a possibility that an individual can be identified through implicit 
deduction based on small cell sizes (instances where the patient 
population is so small that individuals who are familiar with the 
enrollees could, because of the small size, use this information to 
deduce the identity of the beneficiary).

IV. Safeguards

A. Administrative Safeguards

    The EDB system will conform to applicable law and policy governing 
the privacy and security of Federal automated information systems. 
These include but are not limited to: the Privacy Act of 1984, Computer 
Security Act of 1987, the Paperwork Reduction Act of 1995, the Clinger-
Cohen Act of 1996, and the Office and Management and Budget (OMB) 
Circular A-130, Appendix III, ``Security of Federal Automated 
Information Resources.'' CMS has prepared a comprehensive system 
security plan as required by OMB Circular A-130, Appendix III. This 
plan conforms fully to guidance issued by the National Institute for 
Standards and Technology (NIST) in NIST Special Publication 800-18, 
``Guide for Developing Security Plans for Information Technology 
Systems. Paragraphs A-C of this section highlight some of the specific 
methods that CMS is using to ensure the security of this system and the 
information within it.
    Authorized users: Personnel having access to the system have been 
trained in Privacy Act and systems security requirements. Employees and 
contractors who maintain records in the system are instructed not to 
release any data until the intended recipient agrees to implement 
appropriate administrative, technical, procedural, and physical 
safeguards sufficient to protect the confidentiality of the data and to 
prevent unauthorized access to the data. In addition, CMS is monitoring 
the authorized users to ensure against excessive or unauthorized use. 
Records are used in a designated work area or workstation and the 
system location is attended at all times during working hours.
    To insure security of the data, the proper level of class user is 
assigned for each individual user as determined at the Agency level. 
This prevents unauthorized users from accessing and modifying critical 
data. The system database configuration includes five classes of 
database users:
     Database Administrator class owns the database objects; 
e.g., tables, triggers, indexes, stored procedures, packages, and has 
database administration privileges to these objects;
     Quality Control Administrator class has read and write 
access to key fields in the database;
     Quality Indicator Report Generator class has read-only 
access to all fields and tables;
     Policy Research class has query access to tables, but are 
not allowed to access confidential patient identification information; 
and
     Submitter class has read and write access to database 
objects, but no database administration privileges.

B. Physical Safeguards

    All server sites have implemented the following minimum 
requirements to assist in reducing the exposure of computer equipment 
and thus achieve an optimum level of protection and security for the 
EDB system:
    Access to all servers is controlled, with access limited to only 
those support personnel with a demonstrated need for access. Servers 
are to be kept in a locked room accessible only by specified management 
and system support personnel. Each server requires a specific log-on 
process. All entrance doors are identified and marked. A log is kept of 
all personnel who were issued a security card, key and/or combination 
that grants access to the room housing the server, and all visitors are 
escorted while in this room. All servers are housed in an area where 
appropriate environmental security controls are implemented, which 
include measures implemented to mitigate damage to Automated 
Information System resources caused by fire, electricity, water and 
inadequate climate controls.
    Protection applied to the workstations, servers and databases 
include:
     User Log on--Authentication is performed by the Primary 
Domain Controller/Backup Domain Controller of the log-on domain.
     Workstation Names--Workstation naming conventions may be 
defined and implemented at the Agency level.
     Hours of Operation--May be restricted by Windows NT. When 
activated all applicable processes will automatically shut down at a 
specific time and not be permitted to resume until the predetermined 
time. The appropriate hours of operation are determined and implemented 
at the Agency level.
     Inactivity Log-out--Access to the NT workstation is 
automatically logged out after a specified period of inactivity.
     Warnings--Legal notices and security warnings display on 
all servers and workstations.
     Remote Access Services (RAS)--Windows NT RAS security 
handles resource access control. Access to NT resources is controlled 
for remote users in the same manner as local users, by utilizing 
Windows NT file and sharing permissions. Dial-in access can be granted 
or restricted on a user-by-user basis through the Windows NT RAS 
administration tool.

C. Procedural Safeguards

    All automated systems must comply with Federal laws, guidance, and 
policies for information systems

[[Page 3208]]

security as stated previously in this section. Each automated 
information system should ensure a level of security commensurate with 
the level of sensitivity of the data, risk, and magnitude of the harm 
that may result from the loss, misuse, disclosure, or modification of 
the information contained in the system.

V. Effect 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. We will only 
disclose the minimum personal data necessary to achieve the purpose of 
EDB. Disclosure of information from the SOR 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 
in this system 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: January 14, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
09-70-0502

SYSTEM NAME:
    Enrollment Database (EDB), HHS/CMS/CBC.

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive Data.

SYSTEM LOCATION:
    CMS Data Center, 7500 Security Boulevard, North Building, First 
Floor, Baltimore, Maryland 21244-1850, and at various other remote 
locations.

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 Title XVIII of 
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 than 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 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 of their being 
disabled.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system contains information related to Medicare enrollment and 
entitlement and MSP data containing other party liability insurance 
information necessary for appropriate Medicare claim payment. It 
contains hospice election, Group Health Organization Insurance health 
plan election, premium billing and collection, direct billing 
information, and group health plan enrollment data. The system also 
contains the individual's health insurance numbers, name, geographic 
location, race/ethnicity, sex, and date of birth.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under sections 
226, 226A, 1811, 1818, 1818A, 1831, 1836, 1837, 1838, 1843, 1876, and 
1881 of the Act and Title 42 Code of Federal Regulations (CFR), parts 
406, 407, 408, 411 and 424.
    Authority for maintenance of the system section 1862 of the Act was 
a published authority in the published SOR. We included section 1862 in 
the modified SOR since we do maintain a limited number of data elements 
in the EDB pertaining to MSP.
    Authority for maintenance of the system section 1870 of the Act was 
included in the modified system since the EDB does maintain data 
regarding direct billing for Medicare premiums. Section 1870 (g) 
describes refunding these premiums.

PURPOSE(S):
    The primary purpose of the SOR is to maintain information on 
Medicare enrollment for the administration of the Medicare program, 
including the following functions: ensuring proper Medicare enrollment, 
claims payment, Medicare premium billing and collection, coordination 
of benefits by validating and verifying the enrollment status of 
beneficiaries, and validating and studying the characteristics of 
persons enrolled in the Medicare program including their requirements 
for information. Information retrieved from this SOR will also be 
disclosed to: (1) Support regulatory, reimbursement, and policy 
functions performed within the Agency or by a contractor or consultant; 
(2) another Federal or state agency, agency of a state government, an 
agency established by state law, or its fiscal agent; (3) providers and 
suppliers of services for administration of Title XVIII of the Act; (4) 
third parties where the contact is expected to have information 
relating to the individuals capacity to manage his or her own affairs; 
(5) Peer Review Organizations; (6) other insurers for processing 
individual insurance claims; (7) facilitate research on the quality and 
effectiveness of care provided, as well as payment-related and 
epidemiological projects; (8) support constituent requests made to a 
congressional representative; (9) support litigation involving the 
Agency; and (10) combat fraud and abuse in certain health benefits 
programs.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OR USERS AND THE PURPOSES OF SUCH USES:
    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 EDB 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. In addition, our 
policy will be to prohibit release even of non-identifiable data, 
except pursuant to one of the routine uses, if 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).
    This SOR contains Protected Health Information as defined by HHS 
regulation ``Standards for Privacy of

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Individually Identifiable Health Information'' (45 CFR parts 160 and 
164, 65 FR 82462 (12-28-00), as amended by 66 FR 12434 (2-26-01)). 
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.'' We are proposing to establish or modify the following 
routine use disclosures of information maintained in the system:
    1. To Agency contractors, or consultants who have been contracted 
by the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this SOR and who need to have access to the records in 
order to assist CMS.
    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.
    3. To providers and suppliers of services directly or through 
fiscal intermediaries (FIs) or carriers for the administration of Title 
XVIII of the Act.
    4. To 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.
    5. To Peer Review Organizations (PRO) 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.
    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 
(HMO) or a competitive medical plan (CMP) with a Medicare contract, or 
a Medicare-approved health care prepayment plan (HCPP)), directly or 
through a contractor, and other groups providing protection for their 
enrollees. Information to be disclosed shall be limited to Medicare 
entitlement data. In order to receive the information, they must agree 
to:
    a. Certify that the individual about whom the information is being 
provided is one of its insured or employees, or is insured and/or 
employed by another entity for whom they serve as a TPA;
    b. Utilize the information solely for the purpose of processing the 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    7. 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.
    8. To a Member of Congress or to a congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    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
    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.
    10. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program, or to a grantee of a CMS-administered grant 
program, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    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 
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.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    All records are stored on magnetic media.

RETRIEVABILITY:
    All Medicare records are accessible by HIC number or alpha (name) 
search. This system supports both on-line and batch access.

SAFEGUARDS:
    CMS has safeguards 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 systems security 
requirements. Employees who maintain records in the system are 
instructed not to release any data until the intended recipient agrees 
to implement appropriate administrative, technical, procedural, and 
physical safeguards sufficient to protect the confidentiality of the 
data and to prevent unauthorized access to the data.
    In addition, CMS has physical safeguards in place to reduce the

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exposure of computer equipment and thus achieve an optimum level of 
protection and security for the EDB system. For computerized records, 
safeguards have been established in accordance with the Department of 
Health and Human Services (HHS) standards and National Institute of 
Standards and Technology guidelines, e.g., security codes will be used, 
limiting access to authorized personnel. System securities are 
established in accordance with HHS, Information Resource Management 
(IRM) Circular #10, Automated Information Systems Security Program; CMS 
Automated Information Systems (AIS) Guide, Systems Securities Policies, 
and OMB Circular No. A-130 (revised), Appendix III.

RETENTION AND DISPOSAL:
    Records are maintained for a period of 15 years.

SYSTEM MANAGERS AND ADDRESS:
    Director, Health Plan Policy Group, Center for Beneficiary Choices, 
CMS, 7500 Security Boulevard, S1-05-06, 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, health insurance claim 
number, address, date of birth, and sex, and for verification purposes, 
the subject individual's name (woman's maiden name, if applicable), and 
social security number (SSN). Furnishing the SSN is voluntary, but it 
may make searching for a record easier and prevent delay.

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

CONTESTING RECORD PROCEDURES:
    The subject individual should contact the systems 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:
    The data contained in these records are furnished by the 
individual, or in the case of some MSP situations, through third party 
contacts. There are cases, however, in which the identifying 
information is provided to the physician by the individual; the 
physician then adds the medical information and submits the bill to the 
carrier for payment. Updating information is also obtained from the 
Railroad Retirement Board, and the Master Beneficiary Record maintained 
by the SSA.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. 02-1526 Filed 1-22-02; 8:45 am]
BILLING CODE 4120-03-P