[Federal Register Volume 71, Number 199 (Monday, October 16, 2006)]
[Notices]
[Pages 60722-60726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17057]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Privacy Act of 1974; Report of a Modified or Altered System of 
Records

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

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

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SUMMARY: In accordance with the Privacy Act of 1974, we are proposing 
to modify or alter an existing SOR, ``Medicare Current Beneficiary 
Survey (MCBS),'' System No. 09-70-6002, last published at 66 Federal 
Register 15496 (March 19, 2001). 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 of the Health Care Financing Administration that 
maintained the system of records. The new assigned identifying number 
for this system should read: System No. 09-70-0519.
    We propose to modify existing routine use number 2 that permits 
disclosure to agency contractors and consultants to include disclosure 
to CMS grantees who perform a task for the agency. CMS grantees, 
charged 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 be renumbered as 
routine use number 1.
    We will delete routine use number 4 authorizing disclosure to 
support constituent requests made to a congressional representative. If 
an authorization for the disclosure has been obtained from the data 
subject, then no routine use is needed. The Privacy Act allows for 
disclosures with the ``prior written consent'' of the data subject.
    We 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 any sections of the system that were affected 
by the recent reorganization or because of the impact of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) 
(Pub. L. 108-173) provisions and to update language in the 
administrative sections to correspond with language used in other CMS 
SORs.
    The primary purpose of this modified system is to collect and 
maintain a research database for CMS and other researchers that is 
capable of producing data sets suitable for both longitudinal and 
cross-sectional analysis to be used to: (1) Produce projections for 
current programs and proposed program changes, (2) produce national 
level estimates of health care expenditures by the aged and disabled, 
and (3) provide a research database that can be used to provide 
guidance to program management and policies. The information retrieved 
from this system of records will also be disclosed to: (1) Support 
regulatory, reimbursement, and policy functions performed within the 
agency or by a contractor, consultant, or a CMS grantee; (2) assist 
another Federal or State agency with information to contribute to the 
accuracy of CMS's proper payment of Medicare benefits, enable such 
agency to administer a Federal health benefits program, or to enable 
such agency to fulfill a requirement of Federal statute or regulation 
that implements a health benefits program funded in whole or in part 
with Federal funds; (3) assist an individual or organization for a 
research project or in support of an evaluation project related to the 
prevention of disease or disability, the restoration or maintenance of 
health, or payment related projects; and (4) support litigation 
involving the agency. 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 modified or altered routine 
uses, CMS invites comments on all portions of this notice. See 
EFFECTIVE DATE section for comment period.

EFFECTIVE DATE: CMS filed a modified or altered SOR report with the 
Chair of the

[[Page 60723]]

House Committee on Government Reform and Oversight, the Chair of the 
Senate Committee on Homeland Security & Governmental Affairs, and the 
Administrator, Office of Information and Regulatory Affairs, Office of 
Management and Budget (OMB) on October 6, 2006. To ensure that all 
parties have adequate time in which to comment, the new system will 
become effective 30 days from the publication of the notice, or 40 days 
from the date it was submitted to OMB and the Congress, whichever is 
later. We may defer implementation of this system or one or more of the 
routine use statements listed below if we receive comments that 
persuade us to defer implementation.

ADDRESSES: The public should address comments to: CMS Privacy Officer, 
Division of Privacy Compliance, Enterprise Architecture and Strategy 
Group, Office of Information Services, CMS, Room N2-04-27, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850. Comments received 
will be available for review at this location, by appointment, during 
regular business hours, Monday through Friday from 9 a.m.-3 p.m., 
eastern time zone.

FOR FURTHER INFORMATION CONTACT: William Long, Social Science Research 
Analyst, Division of Survey Management and Data Release, Information 
and Methods Group, Office of Research, Development and Information, 
CMS, Mail Stop C3-20-11, 7500 Security Boulevard, Baltimore, Maryland 
21244-1850. He can also be reached by telephone at 410-786-7927, or via 
e-mail at [email protected].

SUPPLEMENTARY INFORMATION: CMS has previously published SOR notice on 
this system at 66 Federal Register (FR) 15496 (March 19, 2001), and 55 
FR 35957 (September 4, 1990). MCBS is an ongoing, multi-purpose survey 
for use by all components of CMS, by the Department, and by others 
concerned with Medicare policy. The core of the MCBS concept is a 
series of interviews of a representative sample of the Medicare 
population regarding: their patterns of use and cost of health services 
over time; their sources of coverage and payment; their assets and 
income; their demographic characteristics; their health and functional 
status; their health and work history; and their family support. The 
same beneficiaries will be interviewed repeatedly over several years to 
observe changes in health care use with changes in coverage, and to 
observe processes that occur over time, such as institutionalization or 
spending down of assets.

I. Description of the Modified or Altered System of Records

A. Statutory and Regulatory Basis for SOR

    Authority for maintenance of the system is given under section 1875 
of the Social Security Act (42 United States Code 1395ll).

B. Collection and Maintenance of Data in the System

    Records in this system will be maintained on a random sample of 
persons enrolled for hospital insurance and/or supplemental medical 
benefits under the Medicare program. Records in this system will 
include, but are not limited to, name, social security number, health 
insurance claim number, age, gender, ethnicity, education, military 
service history, income data, marital status, medical utilization and 
cost data, prescription drug usage and cost data, health and functional 
status, health insurance coverage, medical condition status, household 
composition data, and medical provider names.

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

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

    The Privacy Act permits us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such disclosure of data is known as a ``routine use.'' 
The government will only release MCBS information that can be 
associated with an individual as provided for under ``Section III. 
Proposed Routine Use Disclosures of Data in the System.'' Both 
identifiable and non-identifiable data may be disclosed under a routine 
use.
    We will only collect the minimum personal data necessary to achieve 
the purpose of MCBS. CMS has the following policies and procedures 
concerning disclosures of information that will be maintained in the 
system. Disclosure of information from this system will be approved 
only to the extent necessary to accomplish the purpose of the 
disclosure and only after CMS:
    1. Determines that the use or disclosure is consistent with the 
reason that the data is being collected, e.g., to maintain a research 
database for CMS and other researchers that is capable of producing 
data sets suitable for both longitudinal and cross-sectional analysis 
to be used to: (1) Produce projections for current programs and 
proposed program changes, (2) produce national level estimates of 
health care expenditures by the aged and disabled, and (3) provide a 
research database that can be used to provide guidance to program 
management and policies.
    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. The Privacy Act allows us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such compatible use of data is known as a ``routine 
use.'' The proposed routine uses in this system meet the compatibility 
requirement of the Privacy Act. We are proposing to establish the 
following routine use disclosures of information maintained in the 
system:
    1. To support agency contractors, consultants, or grantees, who 
have been engaged by the agency to assist in the performance of a 
service related to this collection and who need to have access to the 
records in order to perform the activity.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing CMS function 
relating to purposes for this system.
    CMS occasionally contracts out certain of its functions when doing 
so

[[Page 60724]]

would contribute to effective and efficient operations. CMS must be 
able to give a contractor, consultant or grantee 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 grantee from using or disclosing the 
information for any purpose other than that described in the contract 
and requires the contractor, consultant or grantee to return or destroy 
all information at the completion of the contract.
    2. To another Federal or State agency 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 MCBS information in order to 
support evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    3. To assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    The MCBS data will provide for research or in support of evaluation 
projects, a broader, 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.
    4. To support the Department of Justice (DOJ), court or 
adjudicatory body when:
    a. The agency or any component thereof, or
    b. Any employee of the agency in his or her official capacity, or
    c. Any employee of the agency in his or her individual capacity 
where the DOJ has agreed to represent the employee, or
    d. The United States Government is a party to litigation or has an 
interest in such litigation, and by careful review, CMS determines that 
the records are both relevant and necessary to the litigation and that 
the use of such records by the DOJ, court or adjudicatory body is 
compatible with the purpose for which the agency collected the records.
    Whenever CMS is involved in litigation, and occasionally when 
another party is involved in litigation and CMS' policies or operations 
could be affected by the outcome of the litigation, CMS would be able 
to disclose information to the DOJ, court or adjudicatory body 
involved.

B. Additional Provisions Affecting Routine Use Disclosures

    To the extent this system contains Protected Health Information 
(PHI) as defined by HHS regulation ``Standards for Privacy of 
Individually Identifiable Health Information'' (45 CFR Parts 160 and 
164, Subparts A and E) 65 FR 82462 (12-28-00). Disclosures of such PHI 
that are otherwise authorized by these routine uses may only be made 
if, and as, permitted or required by the ``Standards for Privacy of 
Individually Identifiable Health Information.'' (See 45 CFR 164-512 (a) 
(1)).
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if we determine there is a possibility that an 
individual can be identified through implicit deduction based on small 
cell sizes (instances where the patient population is so small that 
individuals could, because of the small size, use this information to 
deduce the identity of the beneficiary).

 IV. Safeguards

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

 V. Effects of the Modified or Altered System of Records on Individual 
Rights

    CMS proposes to modify this system in accordance with the 
principles and requirements of the Privacy Act and will collect, use, 
and disseminate information only as prescribed therein. Data in this 
system will be subject to the authorized releases in accordance with 
the routine uses identified in this system of records.
    CMS will take precautionary measures to minimize the risks of 
unauthorized access to the records and the potential harm to individual 
privacy or other personal or property rights of patients whose data are 
maintained in the system. CMS will collect only that information 
necessary to perform the system's functions. In addition, CMS will make 
disclosure from the proposed system only with consent of the subject 
individual, or his/her legal representative, or in accordance with an 
applicable exception provision of the Privacy Act. CMS, therefore, does 
not anticipate an unfavorable effect on individual privacy as a result 
of information relating to individuals.

    Dated: October 4, 2006.
Charlene Frizzera,
Acting Chief Operating Officer, Centers for Medicare & Medicaid 
Services.
SYSTEM NO. 09-70-0519

SYSTEM NAME:
    ``Medicare Current Beneficiary Survey (MCBS),'' HHS/CMS/ORDI.

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive Data.

SYSTEM LOCATION:
    The Centers for Medicare & Medicaid Services (CMS) Data Center, 
7500 Security Boulevard, North Building, First Floor, Baltimore, 
Maryland 21244-1850 and at various contractor sites and at CMS Regional 
Offices.

[[Page 60725]]

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Records in this system will be maintained on a random sample of 
persons enrolled for hospital insurance and/or supplemental medical 
benefits under the Medicare program.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Records in this system will include, but are not limited to, name, 
social security number (SSN), health insurance claim number (HICN), 
age, gender, ethnicity, education, military service history, income 
data, marital status, medical utilization and cost data, prescription 
drug usage and cost data, health and functional status, health 
insurance coverage, medical condition status, household composition 
data, and medical provider names.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under section 1875 
of the Social Security Act (42 United States Code 1395ll).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of this modified system is to collect and 
maintain a research database for CMS and other researchers that is 
capable of producing data sets suitable for both longitudinal and 
cross-sectional analysis to be used to: (1) Produce projections for 
current programs and proposed program changes, (2) produce national 
level estimates of health care expenditures by the aged and disabled, 
and (3) provide a research database that can be used to provide 
guidance to program management and policies. The information retrieved 
from this system of records will also be disclosed to: (1) Support 
regulatory, reimbursement, and policy functions performed within the 
agency or by a contractor, consultant, or a CMS grantee; (2) assist 
another Federal or State agency with information to contribute to the 
accuracy of CMS's proper payment of Medicare benefits, enable such 
agency to administer a Federal health benefits program, or to enable 
such agency to fulfill a requirement of Federal statute or regulation 
that implements a health benefits program funded in whole or in part 
with Federal funds; (3) assist an individual or organization for a 
research project or in support of an evaluation project related to the 
prevention of disease or disability, the restoration or maintenance of 
health, or payment related projects; and (4) support litigation 
involving the agency.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OR USERS AND THE PURPOSES OF SUCH USES:
    A. The Privacy Act allows us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such compatible use of data is known as a ``routine 
use.'' The proposed routine uses in this system meet the compatibility 
requirement of the Privacy Act. We are proposing to establish the 
following routine use disclosures of information maintained in the 
system:
    1. To support agency contractors, consultants, or grantees, who 
have been engaged by the agency to assist in the performance of a 
service related to this collection and who need to have access to the 
records in order to perform the activity.
    2. To another Federal or State agency 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 assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    4. To support 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.
    B. Additional Provisions Affecting Routine Use Disclosures.
    To the extent this system contains Protected Health Information 
(PHI) as defined by HHS regulation ``Standards for Privacy of 
Individually Identifiable Health Information'' (45 CFR Parts 160 and 
164, Subparts A and E) 65 FR 82462 (12-28-00). Disclosures of such PHI 
that are otherwise authorized by these routine uses may only be made 
if, and as, permitted or required by the ``Standards for Privacy of 
Individually Identifiable Health Information.'' (See 45 CFR 164-
512(a)(1)).
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if we determine there is a possibility that an 
individual can be identified through implicit deduction based on small 
cell sizes (instances where the patient population is so small that 
individuals could, because of the small size, use this information to 
deduce the identity of the beneficiary).

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

RETRIEVABILITY:
    Information can be retrieved by the name and HICN of the 
beneficiary.

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

[[Page 60726]]

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 will be maintained for 10 years after the final action of 
the research project is complete. All claims-related records are 
encompassed by the document preservation order and will be retained 
until notification is received from DOJ.

SYSTEM MANAGER(S) AND ADDRESS:
    Deputy Director, Office of Research, Development and Information, 
CMS, Mail Stop C3-20-01, 7500 Security Boulevard, Baltimore, Maryland 
21244-1850.

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

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

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

RECORDS SOURCE CATEGORIES:
    Information contained in these records will be obtained from the 
Medicare enrollment records, Medicare bill records, Medicare provider 
records, Medicare beneficiaries and/or their representatives, and 
Medicare carriers and intermediaries.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

 [FR Doc. E6-17057 Filed 10-13-06; 8:45 am]
BILLING CODE 4120-03-P