[Federal Register Volume 71, Number 199 (Monday, October 16, 2006)]
[Notices]
[Pages 60726-60730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17058]


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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, ``Person-Level Medicaid Data System 
(PMDS),'' System No. 09-70-0033, established at 49 Federal Register 
(FR) 47573 (December 5, 1984) and last modified at 65 FR 37792 (June 
16, 2000). 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. 09-70-0507.
    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 3 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 propose to broaden the scope of the disclosure provisions of 
this system by adding a routine use to permit the release of 
information to other Federal and State agencies to: (1) Contribute to 
the accuracy of CMS' proper payment of Medicare benefits; and (2) 
enable such agency to administer a Federal health benefits program, 
and/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.
    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 individually-identifiable data to study Medicaid use and 
expenditures in order to increase CMS' understanding of the Medicaid 
and Medicare programs and to improve CMS' ability to conduct program 
evaluation, strengthen program management, evaluate policy 
alternatives, conduct and evaluate demonstration projects, and advise 
States in the area of Medicaid financing. 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 grantee; (2) assist another 
Federal and/or State agency; (3) support an individual or organization 
for research, evaluation or epidemiological 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 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

[[Page 60727]]

October 6, 2006. To ensure that all parties have adequate time in which 
to comment, the modified 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 the CMS Privacy 
Officer, Division of Privacy Compliance, Enterprise Architecture and 
Strategy Group, Office of Information Services, 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: Dave Baugh, Division of State Program 
and Research, Research and Evaluation Group, Office of Research, 
Development and Information, CMS, Mail Stop C3-20-17, 7500 Security 
Boulevard, Baltimore, Maryland 21244-1850. He can also be reached by 
telephone at 410-786-7716, or via e-mail at [email protected].

SUPPLEMENTARY INFORMATION: Enacted under the authority of section 
1902(a)(6) of the Social Security Act (the Act) (42 United States Code 
(U.S.C.) 1396(a)(6)), this section provides that a State plan for 
medical assistance must provide that the State agency will make such 
report, in such form and containing such information, as the Secretary 
may from time to time require, and comply with such provisions as the 
Secretary may from time to time find necessary to assure the 
correctness and verification of such reports. To this end we have 
created a records system using Medicaid data which has greatly improved 
CMS' ability to conduct program evaluation and has strengthened program 
management.

 I. Description of the Modified or Altered System of Records

A. Statutory and Regulatory Basis for SOR

    Authority for maintenance of the system is given under Sec.  
1902(a)(6) of the Act (42 U.S.C. 1396(a)(6)).

 B. Collection and Maintenance of Data in the System

    PMDS contains information on persons enrolled in the Medicaid 
program under either Federal or State provisions. Information collected 
includes but is not limited to data from 5 State Medicaid agencies 
(California, Georgia, Michigan, New York, and Tennessee) showing claims 
submitted for covered medical services, provider characteristics, name, 
address, phone number, date of birth, social security number, health 
insurance claim number, gender and ethnicity.

 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 PMDS 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 PMDS. 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 study Medicaid use 
and expenditures in order to increase CMS' understanding of the 
Medicaid and Medicare programs and to improve CMS' ability to conduct 
program evaluation, strengthen program management, evaluate policy 
alternatives, conduct and evaluate demonstration projects, and advise 
States in the area of Medicaid financing.
    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 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 assist another Federal or State agency:
    a. To contribute to the accuracy of CMS's proper payment of 
Medicare benefits,
    b. To 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

[[Page 60728]]

implements a health benefits program funded in whole or in part with 
Federal funds.
    Other Federal or State agencies in their administration of a 
Federal health program may require PMDS information in order to support 
evaluations and monitoring of reimbursement for services provided.
    3. To assist an individual or organization for research, evaluation 
or epidemiological projects related to the prevention of disease or 
disability, or the restoration or maintenance of health, and for 
payment related projects.
    The collected data will provide the research, evaluation and 
epidemiological projects a broader, longitudinal, national perspective 
of the data. CMS anticipates that many researchers will have legitimate 
requests to use these data in projects that could ultimately improve 
the care provided to Medicare patients and the policy that governs the 
care. CMS understands the concerns about the privacy and 
confidentiality of the release of data for a research use. Disclosure 
of data for research and evaluation purposes may involve aggregate data 
rather than individual-specific data.
    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 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 (see item IV above) 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. 09-70-0507

SYSTEM NAME:
    ``Person-Level Medicaid Data System (PMDS),'' 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.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    PMDS contains information on persons enrolled in the Medicaid 
program under either Federal or State provisions, as well as health 
care providers.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Information collected includes but is not limited to data from 5 
State Medicaid agencies (California, Georgia, Michigan, New York, and 
Tennessee) showing claims submitted for covered medical services, 
provider characteristics, name, address, phone number, date of birth, 
social security number (SSN), health insurance claim number (HICN), 
unique provider identification number, gender and ethnicity.

[[Page 60729]]

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under section 
1902(a)(6) of the Social Security Act (42 United States Code 
1396(a)(6)).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of this modified system is to collect and 
maintain individually-identifiable data to study Medicaid use and 
expenditures in order to increase CMS' understanding of the Medicaid 
and Medicare programs and to improve CMS' ability to conduct program 
evaluation, strengthen program management, evaluate policy 
alternatives, conduct and evaluate demonstration projects, and advise 
States in the area of Medicaid financing. 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 grantee; (2) assist another 
Federal and/or State agency; (3) support an individual or organization 
for research, evaluation or epidemiological 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:
    5. 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.
    6. To assist another Federal or State agency:
    a. To contribute to the accuracy of CMS's proper payment of 
Medicare benefits,
    b. To 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.
    7. To assist an individual or organization for research, evaluation 
or epidemiological projects related to the prevention of disease or 
disability, or the restoration or maintenance of health, and for 
payment related projects.
    8. 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 magnetic tape and computer disk.

RETRIEVABILITY:
    Enrollment records are retrieved by Medicaid and Medicare 
identification numbers. Provider records are retrieved by Medicaid and 
Medicare provider identification numbers. Claims records contain both 
enrollee and provider identification numbers.

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.

RETENTION AND DISPOSAL:
    CMS will retain information for a total period of 6 years and 3 
months. 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 C3-20-11, 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

[[Page 60730]]

may make searching for a record easier and prevent delay.

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

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

RECORDS SOURCE CATEGORIES:
    Medicaid and Medicare enrollment, claims, and provider records.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. E6-17058 Filed 10-13-06; 8:45 am]
BILLING CODE 4120-03-P