[Federal Register Volume 71, Number 223 (Monday, November 20, 2006)]
[Notices]
[Pages 67137-67142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19505]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


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

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

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

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SUMMARY: In accordance with the Privacy Act of 1974, we are proposing 
to modify or alter an existing SOR, ``National Claims History (NCH),'' 
System No. 09-70-0005, last published at 67 FR 57015 (September 6, 
2002). 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. 09-70-0558.
    We propose to modify existing routine use number one 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 remain as routine use 
number one. We will broaden the scope of routine uses number 8 and 9, 
authorizing disclosures to combat fraud and abuse in the Medicare and 
Medicaid programs to include combating ``waste'' which refers to 
specific beneficiary/recipient practices that result in unnecessary 
cost to all Federally-funded health benefit programs.
    We will delete routine use number six 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 billing and utilization data on Medicare beneficiaries 
enrolled in hospital insurance (Part A) or medical insurance (Part B) 
of the Medicare program for statistical and research purposes related 
to evaluating and studying the operation and effectiveness of the 
Medicare program. 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 or state agency, 
agency of a state government, an agency established by state law, or 
its fiscal agent; (3)support providers and suppliers of services for 
administration of Title XVIII; (4) assist third parties where the 
contact is expected to have information relating to the individual's 
capacity to manage his or her own affairs; (5) assist QIOs; (6) process 
individual insurance claims by other insurers; (7) facilitate research 
on the quality and effectiveness of care provided, as well as payment-
related projects; (8) support litigation involving the agency; and (9) 
combat fraud, waste, and abuse in Federally-funded 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 modified or altered routine uses, 
CMS invites comments on all portions of this notice. See ``Effective 
Dates'' section for comment period.

[[Page 67138]]


DATES: Effective Dates: CMS filed a modified or altered system report 
with the Chair of the House Committee on Government Reform and 
Oversight, the Chair of the Senate Committee on Homeland Security & 
Governmental Affairs, and the Administrator, Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB) on November 
14, 2006. To ensure that all parties have adequate time in which to 
comment, the modified system, including routine uses, will become 
effective 30 days from the publication of the notice, or 40 days from 
the date it was submitted to OMB and Congress, whichever is later, 
unless CMS receives comments that require alterations to this notice.

ADDRESSES: The public should address comments to: CMS Privacy Officer, 
Division of Privacy Compliance, Enterprise Architecture and Strategy 
Group, Office of Information Services, CMS, Room N2-04-27, 7500 
Security Boulevard, Baltimore, MD 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: John Evangelist, Director, Division of 
Integrated Data Program Management, Enterprise Databases Group, Office 
of Information Services, CMS, Mail Stop N2-17-07, 7500 Security 
Boulevard, Baltimore, MD 21244-1850. He can also be reached by 
telephone at 410-786-2885, or via e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Description of the Modified or Altered System of Records

A. Statutory and Regulatory Basis for SOR

    Authority for maintenance of the system is given under Sec. Sec.  
1874 (a) and 1875 of the Social Security Act (the Act) and Title 42 
United States Code (U.S.C.) section 1395kk(a) and 1395ll.

B. Collection and Maintenance of Data in the System

    NCH contains billing and utilization information on Medicare 
beneficiaries enrolled in hospital insurance (Part A) or medical 
insurance (Part B) of the Medicare program. Information maintained in 
this system includes, but is not limited to Medicare billing and 
utilization data, name, health insurance claim number, ethnicity, 
gender, date of birth, state and county code, zip code, as well as the 
basis for the beneficiary's Medicare entitlement. The system also 
contains provider characteristics, assigned provider number (facility, 
referring/servicing physician), admission date, service dates, 
diagnosis and procedural codes, total charges, Medicare payment amount, 
and beneficiary's liability.

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

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 NCH 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 NCH. 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 collect and maintain 
billing and utilization data on Medicare beneficiaries enrolled in 
hospital insurance (Part A) or medical insurance (Part B) of the 
Medicare program for statistical and research purposes related to 
evaluating and studying the operation and effectiveness of the Medicare 
program.
    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 contracted by the Agency to assist in accomplishment of a CMS 
function relating to the purposes for this system and who need to have 
access to the records in order to assist CMS.
    We contemplate disclosing this information under this routine use 
only in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing a CMS function 
relating to purposes for this system.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor, consultant or grantee whatever information 
is necessary for the contractor, consultant or grantee 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 and/or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS' proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or

[[Page 67139]]

    c. Assist Federal/state Medicaid programs within the state.
    Other Federal or state agencies in their administration of a 
Federal health program may require NCH information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    The Internal Revenue Service may require NCH 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, state agencies in their administration of a Federal 
health program may require NCH information for the purpose of 
determining, evaluating and/or assessing cost, effectiveness, and/or 
the quality of health care services provided in the state.
    The Railroad Retirement Board requires NCH information to enable 
them to assist in the implementation and maintenance of the Medicare 
program. The Social Security Administration requires NCH data to enable 
them to assist in the implementation and maintenance of the Medicare 
program.
    Disclosure under this routine use shall be used by state Medicaid 
agencies pursuant to agreements with HHS for determining Medicaid and 
Medicaid 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.
    We also contemplate disclosing information under this routine use 
in situations in which state auditing agencies require NCH information 
for auditing state Medicaid eligibility considerations. CMS may enter 
into an agreement with state auditing agencies to assist in 
accomplishing functions relating to purposes for this system.
    3. To support providers and suppliers of services directly or 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    Providers and suppliers of services require NCH information in 
order to establish the validity of evidence or to verify the accuracy 
of information presented by the individual, as it concerns the 
individual's entitlement to benefits under the Medicare program, 
including proper reimbursement for services provided.
    4. To assist third party contact in situations where the party to 
be contacted has, or is expected to have information relating to the 
individual's capacity to manage his or her affairs or to his or her 
eligibility for, or an entitlement to, benefits under the Medicare 
program and;
    a. The individual is unable to provide the information being sought 
(an individual is considered to be unable to provide certain types of 
information when any of the following conditions exists: the individual 
is confined to a mental institution, a court of competent jurisdiction 
has appointed a guardian to manage the affairs of that individual, a 
court of competent jurisdiction has declared the individual to be 
mentally incompetent, or the individual's attending physician has 
certified that the individual is not sufficiently mentally competent to 
manage his or her own affairs or to provide the information being 
sought, the individual cannot read or write, cannot afford the cost of 
obtaining the information, a language barrier 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 NCH information in order to provide 
support for the individual's entitlement to benefits under the Medicare 
program; to establish the validity of evidence or to verify the 
accuracy of information presented by the individual, and assist in the 
monitoring of Medicare claims information of beneficiaries, including 
proper reimbursement of services provided.
    5. To support Quality Improvement Organizations (QIO) in order to 
assist the QIO to perform Title XI and Title XVIII functions relating 
to assessing and improving quality of care.
    The QIO will work to implement quality improvement programs, 
provide consultation to CMS, its contractors, and to state agencies. 
The QIO will assist state agencies in related monitoring and 
enforcement efforts, assist CMS and intermediaries in program integrity 
assessment, and prepare summary information for release to CMS.
    6. To assist insurance companies, underwriters, third party 
administrators (TPA), employers, self-insurers, group health plans, 
health maintenance organizations (HMO), health and welfare benefit 
funds, managed care organizations, other supplemental insurers, non-
coordinating insurers, multiple employer trusts, other groups providing 
protection against medical expenses of their enrollees without the 
beneficiary's authorization, and any entity having knowledge of the 
occurrence of any event affecting: (a) An individual's right to any 
such benefit or payment, or (b) the initial right to any such benefit 
or payment, for the purpose of coordination of benefits with the 
Medicare program and implementation of the Medicare Secondary Payer 
(MSP) provision at 42 U.S.C. 1395y (b). Information to be disclosed 
shall be limited to Medicare utilization data necessary to perform that 
specific function. 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 
individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    Other insurers may require NCH information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    7. To assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    The NCH 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.
    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

[[Page 67140]]

    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.
    9. To assist a CMS contractor (including, but not necessarily 
limited to, fiscal intermediaries and carriers) that assists in the 
administration of a CMS-administered health benefits program, or to a 
grantee of a CMS-administered grant program, when disclosure is deemed 
reasonably necessary by CMS to prevent, deter, discover, detect, 
investigate, examine, prosecute, sue with respect to, defend against, 
correct, remedy, or otherwise combat fraud, waste, or abuse in such 
program.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual, grantee, 
cooperative agreement or consultant relationship 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 or makes grants or cooperative agreements when doing so 
would contribute to effective and efficient operations. CMS must be 
able to give a contractor, grantee, consultant or other legal agent 
whatever information is necessary for the agent to fulfill its duties. 
In these situations, safeguards are provided in the contract 
prohibiting the agent from using or disclosing the information for any 
purpose other than that described in the contract and requiring the 
agent to return or destroy all information.
    10. To assist another Federal agency or to an instrumentality of 
any governmental jurisdiction within or under the control of the United 
States (including any State or local governmental agency), that 
administers, or that has the authority to investigate potential fraud, 
waste, or abuse in, a health benefits program funded in whole or in 
part by Federal funds, when disclosure is deemed reasonably necessary 
by CMS to prevent, deter, discover, detect, investigate, examine, 
prosecute, sue with respect to, defend against, correct, remedy, or 
otherwise combat fraud, waste, or abuse in such programs.
    Other agencies may require NCH information for the purpose of 
combating fraud, waste, and abuse in such federally-funded programs.

B. Additional Provisions Affecting Routine Use Disclosures

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

IV. Safeguards

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

V. Effects of the 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 to minimize the risks of 
unauthorized access to the records and the potential harm to individual 
privacy or other personal or property rights of patients whose data are 
maintained in the system. CMS will collect only that information 
necessary to perform the system's functions. In addition, CMS will make 
disclosure from the proposed system only with consent of the subject 
individual, or his/her legal representative, or in accordance with an 
applicable exception provision of the Privacy Act. CMS, therefore, does 
not anticipate an unfavorable effect on individual privacy as a result 
of information relating to individuals.

    Dated: November 8, 2006.
John R. Dyer,
Chief Operating Officer, Centers for Medicare & Medicaid Services.
SYSTEM NO. 09-70-0558

SYSTEM NAME:
    ``National Claims History (NCH),'' HHS/CMS/OIS.

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, MD 
21244-1850 and at various contractor sites and at CMS Regional Offices.

[[Page 67141]]

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    NCH contains billing and utilization information on Medicare 
beneficiaries enrolled in hospital insurance (Part A) or medical 
insurance (Part B) of the Medicare program.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Information maintained in this system includes, but is not limited 
to Medicare billing and utilization data, name, health insurance claim 
number, ethnicity, gender, date of birth, state and county code, zip 
code, as well as the basis for the beneficiary's Medicare entitlement. 
The system also contains provider characteristics, assigned provider 
number (facility, referring/servicing physician), admission date, 
service dates, diagnosis and procedural codes, total charges, Medicare 
payment amount, and beneficiary's liability.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under Sec. Sec.  
1874(a) and 1875 of the Social Security Act (the Act) and Title 42 
United States Code (U.S.C.) section 1395kk(a) and 1395ll.

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of this modified system is to collect and 
maintain billing and utilization data on Medicare beneficiaries 
enrolled in hospital insurance (Part A) or medical insurance (Part B) 
of the Medicare program for statistical and research purposes related 
to evaluating and studying the operation and effectiveness of the 
Medicare program. 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 or state agency, 
agency of a state government, an agency established by state law, or 
its fiscal agent; (3) support providers and suppliers of services for 
administration of Title XVIII; (4) assist third parties where the 
contact is expected to have information relating to the individual's 
capacity to manage his or her own affairs; (5) assist QIOs; (6) process 
individual insurance claims by other insurers; (7) facilitate research 
on the quality and effectiveness of care provided, as well as payment-
related projects; (8) support litigation involving the agency; and (9) 
combat fraud, waste, and abuse in federally-funded health benefits 
programs.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OR USERS AND THE PURPOSES OF SUCH USES:
    A. The Privacy Act allows us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such compatible use of data is known as a ``routine 
use.'' The proposed routine uses in this system meet the compatibility 
requirement of the Privacy Act. We are 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 contracted by the Agency to assist in accomplishment of a CMS 
function relating to the purposes for this system and who need to have 
access to the records in order to assist CMS.
    2. To assist another Federal and/or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent to:
    a. Contribute to the accuracy of CMS' proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    3. To support providers and suppliers of services directly or 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    4. To assist third party contact in situations where the party to 
be contacted has, or is expected to have information relating to the 
individual's capacity to manage his or her affairs or to his or her 
eligibility for, or an entitlement to, benefits under the Medicare 
program and;
    a. The individual is unable to provide the information being sought 
(an individual is considered to be unable to provide certain types of 
information when any of the following conditions exists: the individual 
is confined to a mental institution, a court of competent jurisdiction 
has appointed a guardian to manage the affairs of that individual, a 
court of competent jurisdiction has declared the individual to be 
mentally incompetent, or the individual's attending physician has 
certified that the individual is not sufficiently mentally competent to 
manage his or her own affairs or to provide the information being 
sought, the individual cannot read or write, cannot afford the cost of 
obtaining the information, a language barrier 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 support Quality Improvement Organizations (QIO) in order to 
assist the QIO to perform Title XI and Title XVIII functions relating 
to assessing and improving quality of care.
    6. To facilitate insurance companies, underwriters, third party 
administrators (TPA), employers, self-insurers, group health plans, 
health maintenance organizations (HMO), health and welfare benefit 
funds, managed care organizations, other supplemental insurers, non-
coordinating insurers, multiple employer trusts, other groups providing 
protection against medical expenses of their enrollees without the 
beneficiary's authorization, and any entity having knowledge of the 
occurrence of any event affecting: (a) An individual's right to any 
such benefit or payment, or (b) the initial right to any such benefit 
or payment, for the purpose of coordination of benefits with the 
Medicare program and implementation of the Medicare Secondary Payer 
(MSP) provision at 42 U.S.C. 1395y (b). Information to be disclosed 
shall be limited to Medicare utilization data necessary to perform that 
specific function. 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 
individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    7. To assist an individual or organization for a research project 
or in support of an evaluation project related to the prevention of 
disease or disability, the restoration or maintenance of health, or 
payment related projects.
    8. To support the Department of Justice (DOJ), court or 
adjudicatory body when:

[[Page 67142]]

    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.
    9. To assist a CMS contractor (including, but not necessarily 
limited to, fiscal intermediaries and carriers) that assists in the 
administration of a CMS-administered health benefits program, or to a 
grantee of a CMS-administered grant program, when disclosure is deemed 
reasonably necessary by CMS to prevent, deter, discover, detect, 
investigate, examine, prosecute, sue with respect to, defend against, 
correct, remedy, or otherwise combat fraud, waste, or abuse in such 
program.
    10. To assist another Federal agency or to an instrumentality of 
any governmental jurisdiction within or under the control of the United 
States (including any State or local governmental agency), that 
administers, or that has the authority to investigate potential fraud, 
waste, or abuse in, a health benefits program funded in whole or in 
part by Federal funds, when disclosure is deemed reasonably necessary 
by CMS to prevent, deter, discover, detect, investigate, examine, 
prosecute, sue with respect to, defend against, correct, remedy, or 
otherwise combat fraud, waste, or abuse in such programs.
    B. Additional Provisions Affecting Routine Use Disclosures. To the 
extent this system contains Protected Health Information (PHI) as 
defined by HHS regulation ``Standards for Privacy of Individually 
Identifiable Health Information'' (45 CFR parts 160 and 164, subparts A 
and E) 65 FR 82462 (12-28-00). Disclosures of such PHI that are 
otherwise authorized by these routine uses may only be made if, and as, 
permitted or required by the ``Standards for Privacy of Individually 
Identifiable Health Information.'' (See 45 CFR 164-512(a)(1)).
    In addition, our policy will be to prohibit release even of data 
not directly identifiable, except pursuant to one of the routine uses 
or if required by law, if we determine there is a possibility that an 
individual can be identified through implicit deduction based on small 
cell sizes (instances where the patient population is so small that 
individuals could, because of the small size, use this information to 
deduce the identity of the beneficiary).

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    All records are stored on both magnetic storage media and in a DB2 
relational database management environment (DASD data storage media).

RETRIEVABILITY:
    Information in this system is retrieved by HICN, provider number 
(facility, physician, supplier Ids), service dates, type of bill, 
Medicare status code, diagnosis, procedural codes, and beneficiary 
state code.

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

RETENTION AND DISPOSAL:
    Records will be retained and disposed of in accordance with the 
National Archives and Records Administration guidelines. Records are 
housed in both active and archival files. All claims-related records 
are encompassed by the document preservation order and will be retained 
until notification is received from DOJ.

SYSTEM MANAGER(S) AND ADDRESS:
    Director, Division of Integrated Data Program Management, 
Enterprise Databases Group, Office of Information Services, CMS, Mail 
Stop N2-17-07, 7500 Security Boulevard, Baltimore, MD 21244-1850.

NOTIFICATION PROCEDURE:
    For purpose of notification, the subject individual should write to 
the system manager who will require the system name, and the retrieval 
selection criteria (e.g., HIC, facility ID, physician/supplier number, 
service dates, type of bill, etc.).

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

RECORDS SOURCE CATEGORIES:
    Fee-for-Service (FFS) billing and utilization information contained 
in this records system is obtained from the Common Working File.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
[FR Doc. E6-19505 Filed 11-17-06; 8:45 am]
BILLING CODE 4120-03-P