[Federal Register Volume 71, Number 232 (Monday, December 4, 2006)]
[Notices]
[Pages 70404-70407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-20409]



[[Page 70404]]

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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, ``Medicare Supplier Identification 
File (MSIF),'' System No. 09-70-0530, last published at 67 Federal 
Register 48184 (July 23, 2002). The system will facilitate the 
identification of business owners who have been sanctioned by the 
Office of Inspector General and/or have questionable business practices 
within the Medicare program. The carriers will be able to review 
questionable claims before payment that has been found to be more 
effective than post-payment reviews. We propose to modify existing 
routine use number 1 that permits disclosure to agency contractors and 
consultants to include disclosure to CMS grantees who perform a task 
for the agency. CMS grantees, 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 1.
    We will delete routine use number 2 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 
will broaden the scope of routine uses number 4 and 5, 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 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 identify supplier 
businesses that are eligible to receive Medicare payments for items and 
services furnished to Medicare beneficiaries as well as owners, 
managing employees, and subcontractors in those suppliers. 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) support litigation involving the agency; and (3) 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.

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 
28, 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, 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: Barry Bromberg, Division of Provider/
Supplier Enrollment, Program Integrity Group, Office of Financial 
Management, CMS, Mail Stop N3-02-16, 7500 Security Boulevard, 
Baltimore, Maryland 21244-1850. He can also be reached by telephone at 
410-786-9953, or via e-mail at [email protected].

SUPPLEMENTARY INFORMATION: CMS established a new SOR, in 1992, under 
the authority of sections 1124, 1124A, 1126, and 1833(e) of Title XVIII 
of the Social Security Act (the Act) (Title 42 United States Code 
(U.S.C.) Sec. Sec.  405, 426, 1395c, and 1395k). Notice of this system, 
MSIF, was most recently published in the Federal Register (Fed. Reg.) 
67 FR 48184 (July 23, 2002), deleting 2 routine uses and updating the 
security classification, two fraud and abuse routine uses were revised 
and one deleted at 65 FR 50552 (August 18, 2000), one routine use was 
added at 61 FR 6645 (February 21, 1996), and at 57 FR 23420 (June 3, 
1992).

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 sections 
1124, 1124A, 1126, and 1833(e) of the Social Security Act (Title 42 
United States Code (U.S.C.) Sec. Sec.  1320a-3, 1320a-3a, 1320a-5, and 
13951(e)).

B. Collection and Maintenance of Data in the System

    MSIF contains information on owners and managing employees of 
suppliers of Durable Medicare Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS), which provide service or supplies to Medicare 
beneficiaries. The system contains, but is not limited to: Business 
names and addresses, owner's name, owner's social security number, 
Unique Physician/Practitioner Identification Number, managing 
employee's name, employer identification number or other tax reporting 
number, and the carrier assigned billing numbers.

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

[[Page 70405]]

purpose(s) for which the information was collected. Any such disclosure 
of data is known as a ``routine use.'' The government will only release 
MSIF 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 MSIF. 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 identify supplier 
businesses that are eligible to receive Medicare payments for items and 
services furnished to Medicare beneficiaries as well as owners, 
managing employees, and subcontractors in those suppliers.
    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 agency contractors, or consultants, or to a grantee of a CMS-
administered grant program who have been engaged by the agency to 
assist in the 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 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.
    3. To 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 relationship or 
grant with a third party to assist in accomplishing CMS functions 
relating to the purpose of combating fraud, waste, and abuse.
    CMS occasionally contracts out certain of its functions and makes 
grants when doing so would contribute to effective and efficient 
operations. CMS must be able to give a contractor or grantee whatever 
information is necessary for the contractor or grantee to fulfill its 
duties. In these situations, safeguards are provided in the contract 
prohibiting the contractor or grantee from using or disclosing the 
information for any purpose other than that described in the contract 
and requiring the contractor or grantee to return or destroy all 
information.
    4. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any State or local governmental agency), that 
administers, or that has the authority to investigate potential fraud, 
waste, or abuse in, a health benefits program funded in whole or in 
part by Federal funds, when disclosure is deemed reasonably necessary 
by CMS to prevent, deter, discover, detect, investigate, examine, 
prosecute, sue with respect to, defend against, correct, remedy, or 
otherwise combat fraud, waste, or abuse in such programs.
    Other agencies may require MSIF 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)).

[[Page 70406]]

    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 an 
individual 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 24, 2006.
John R. Dyer,
Chief Operating Officer, Centers for Medicare & Medicaid Services.
SYSTEM NO. 09-70-0530

SYSTEM NAME:
    ``Medicare Supplier Identification File (MSIF),'' HHS/CMS/OFM

SECURITY CLASSIFICATION:
    Level Three Privacy Act Sensitive Data

SYSTEM LOCATION:
    National Supplier Clearing House, Palmetto Government Benefits 
Administrators, Interstate 20 at Alpine Road, Columbia, South Carolina 
29219.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    MSIF contains information on owners and managing employees of 
suppliers of Durable Medicare Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS), which provide service or supplies to Medicare 
beneficiaries.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system contains, but is not limited to: business names and 
addresses, owner's name, owner's social security number (SSN), Unique 
Physician/Practitioner Identification Number (UPIN), managing 
employee's name, employer identification number or other tax reporting 
number, and the carrier assigned billing numbers.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under sections 
1124, 1124A, 1126, and 1833(e) of the Social Security Act (Title 42, 
United States Code (U.S.C.) Sec. Sec.  1320a-3, 1320a-3a, 1320a-5, and 
13951(e)).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of this modified system is to identify supplier 
businesses that are eligible to receive Medicare payments for items and 
services furnished to Medicare beneficiaries as well as owners, 
managing employees, and subcontractors in those suppliers. 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) support litigation involving the agency; and (3) 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:
    B. 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 agency contractors, or consultants, or to a grantee of a CMS-
administered grant program who have been engaged by the agency to 
assist in the 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 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.
    3. To 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,

[[Page 70407]]

investigate, examine, prosecute, sue with respect to, defend against, 
correct, remedy, or otherwise combat fraud, waste, or abuse in such 
program.
    4. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any State or local governmental agency), that 
administers, or that has the authority to investigate potential fraud, 
waste, or abuse in, a health benefits program funded in whole or in 
part by Federal funds, when disclosure is deemed reasonably necessary 
by CMS to prevent, deter, discover, detect, investigate, examine, 
prosecute, sue with respect to, defend against, correct, remedy, or 
otherwise combat fraud, waste, or abuse in such programs.
    C. 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 an 
individual 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 business names and addresses, 
owner's name, owner's SSN, UPIN, managing employee's name, employer 
identification number or other tax reporting number, and the Medicare 
contractor assigned billing numbers.

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 are maintained by CMS for a period not to exceed 15 years. 
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 Provider/Supplier Enrollment, Program 
Integrity Group, Office of Financial Management, CMS, Mail Stop C3-02-
16, 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, 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.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:
    Sources of information contained in this records system include 
data collected from the application which the supplier completes to 
obtain Medicare billing numbers. (CMS Form 192--prior to August 1996, 
CMS Form 888--April 1996 through May 1997, and CMS Form 855S--after May 
1997).

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. E6-20409 Filed 12-1-06; 8:45 am]
BILLING CODE 4120-01-P