[Federal Register: September 6, 2002 (Volume 67, Number 173)]
[Notices]               
[Page 57015-57020]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06se02-73]                         


[[Page 57015]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

 
Privacy Act of 1974; Report of Modified or Altered System

AGENCY: Department of Health and Human Services (HHS), Centers for 
Medicare & Medicaid Services (CMS) (formerly known as the Health Care 
Financing Administration).

ACTION: Notice of modified or altered System of Records (SOR).

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, CMS is proposing to modify or alter an SOR, ``National Claims 
History (NCH),'' System No. 09-70-0005. We propose to modify the 
purpose of this system by deleting from the NCH, a sub-file titled 
``Expanded Modified Medicare Provider Analysis and Review File.'' This 
sub-file is used for statistical analyses bearing on Medicare payment 
policies for inpatient hospital services and skilled nursing 
facilities. To accomplish this activity, we propose to establish in a 
separate notice, a new SOR, ``Medicare Provider Analysis and Review 
(MEDPAR) System No. 09-70-0009.'' We propose to further reduce the 
scope of activities covered by the NCH with the deletion of two 
additional sub-files, derived from the Expanded Modified MEDPAR file, 
known as: ``Quality of Care MEDPAR File (QC/MEDPAR),'' and the 
``Medicare Mortality Information File (MMIF).'' The QC/MEDPAR data were 
initially developed for the purpose of conducting research and 
effectiveness of care provided in hospitals. The MMIF includes 
mortality predictors that have been statistically derived by CMS from 
data provided by the hospital, national data, and the number of 
previous hospitalizations in all hospitals.
    CMS proposes to delete published routine use number 2 authorizing 
disclosures to the Bureau of the Census; number 5 authorizing 
disclosures for statistical analysis of inpatient hospital services, 
number 7 authorizing disclosures to conduct research on QC/MEDPAR data, 
number 8 authorizing disclosures to an agency of a state government, 
number 9 authorizing disclosure of data derived from the MMIF, number 
10 authorizing disclosures to the Railroad Retirement Board (RRB), 
number 12 authorizing disclosures to other insurers, number 13 
authorizing disclosures to another Federal agency, number 14 
authorizing disclosures to states for administration of health care 
programs, and an unnumbered routine use authorizing disclosure to the 
Social Security Administration (SSA).
    Published routine use number 2 is being deleted because it 
unnecessarily duplicates Exception 4 of the Privacy Act, allowing 
release of data to the Bureau of the Census. Routine uses number 5, 7, 
and 9 are no longer needed because they authorize disclosures from the 
MEDPAR subfiles that are being removed from this system. Disclosures 
permitted under routine use number 8, 10, 13, 14, and to SSA will be 
made a part of proposed routine use number 2. Proposed routine use 
number 2 will allow for release of information to ``another Federal 
and/or state agency, agency of a state government, an agency 
established by state law, or its fiscal agent.'' Disclosures authorized 
under published routine use number 12 will be combined with published 
routine use number 11, which authorizes disclosures to insurance 
companies. These disclosures to insurance companies will now be covered 
under proposed routine use number 4.
    The security classification previously reported as ``None'' will be 
modified to reflect that the data in this system is considered to be 
``Level Three Privacy Act Sensitive.'' We are modifying the language in 
the remaining routine uses 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 and to update 
language in the administrative sections to correspond with language 
used in other CMS SORs.
    The primary purpose of the SOR 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. 
Information in this system will also be used to: (1) Support 
regulatory, reimbursement, and policy functions performed within the 
Agency or by a contractor or consultant, (2) another Federal or state 
agency, agency of a state government, an agency established by state 
law, or its fiscal agent, (3) quality Improvement Organizations (QIO), 
(4) other insurers for processing individual insurance claims, (5) 
facilitate research on the quality and effectiveness of care provided, 
as well as payment-related projects, (6) support constituent requests 
made to a congressional representative, (7) support litigation 
involving the Agency, and (8) combat fraud and abuse in certain health 
benefits programs. We have provided background information about the 
modified system in the ``Supplementary Information'' section below. 
Although the Privacy Act requires only that CMS provide an opportunity 
for interested persons to comment on the proposed routine uses, CMS 
invites comments on all portions of this notice. See EFFECTIVE DATES 
section for comment period.

EFFECTIVE DATES: CMS filed a modified or altered system report with the 
Chair of the House Committee on Government Reform and Oversight, the 
Chair of the Senate Committee on Governmental Affairs, and the 
Administrator, Office of Information and Regulatory Affairs, Office of 
Management and Budget (OMB) on August 2, 2002. To ensure that all 
parties have adequate time in which to comment, the modified or altered 
SOR will become effective 30 days from the publication of the notice, 
or from the date it was submitted to OMB and the congress, whichever is 
later, unless CMS receives comments that require alterations to this 
notice.

ADDRESSES: The public should address comments to: Director, Division of 
Data Liaison and Distribution, 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 
daylight time.

FOR FURTHER INFORMATION CONTACT: Michael Rappaport, Director, Division 
of Enrollment and Utilization Data Development, Enterprise Databases 
Group, Office of Information Services, CMS, Room N3-16-28, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850. The telephone 
number is 410-786-6759.

SUPPLEMENTARY INFORMATION:

I. Description of the Modified System

A. Background

    In 1989, CMS established an SOR titled ``National Claims History, 
System No. 09-70-0005.'' This system is published at 54 FR 32482 (Aug. 
8, 1989). The latest publication of this system was at 59 FR 19181 
(April 22, 1994), an unnumbered routine use was added for the Social 
Security Administration (SSA) at 61 FR 6645 (Feb. 21, 1996), three new 
fraud and abuse routine uses were added at 63 FR 38414 (July 16, 1998), 
and at 65 FR 50552 (August 18, 2000), two of the fraud and abuse 
routine uses were revised and a third deleted.

[[Page 57016]]

B. Statutory and Regulatory Basis for System

    Authority for maintenance of this SOR is given under the authority 
of sections 1874(a) and 1875 of the Social Security Act (the Act) and 
Title 42 United States Code (U.S.C.) 1395(ll).

II. Collection and Maintenance of Data in the System.

A. Scope of the Data Collected

    The system contains billing and utilization information on Medicare 
beneficiaries enrolled in hospital insurance or medical insurance parts 
of the Medicare program, as well as provider specific information. This 
system contains name of the beneficiary, residence address, state and 
county code, mailing zip code, health insurance claim (HIC) number, 
diagnosis and procedural codes, race, sex, date of birth, as well as 
the basis for the beneficiary's Medicare entitlement. The system 
contains provider characteristics and an assigned provider number 
(facility, referring/servicing physician), admission date, service 
dates, diagnosis and procedure codes, total charges, Medicare payment 
amount, and beneficiary's liability.

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

    The Privacy Act permits us to disclose information without an 
individual's consent if the information is to be used for a purpose 
that is compatible with the purpose(s) for which the information was 
collected. Any such disclosure of data is known as a ``routine use.'' 
The government will only release 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 disclose 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. In general, disclosure of information from 
the SOR will be approved only for the minimum information 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 assist in a variety 
of health care initiatives with other entities related to the 
evaluation and study of 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 individually-
identifiable information; and
    c. Agree to not use or disclose the information for any purpose 
other than the stated purpose under which the information was 
disclosed.
    4. Determines that the data are valid and reliable.

III. Proposed Routine Use Disclosures of Data in the System

A. Entities Who May Receive Disclosures Under Routine Use

    These routine uses specify circumstances, in addition to those 
provided by statute in the Privacy Act of 1974, under which CMS may 
release information from the NCH without the consent of the individual 
to whom such information pertains. Each proposed disclosure of 
information under these routine uses will be evaluated to ensure that 
the disclosure is legally permissible, including but not limited to 
ensuring that the purpose of the disclosure is compatible with the 
purpose for which the information was collected. We propose to 
establish or modify the following routine use disclosures of 
information maintained in the system:
    1. To Agency contractors or consultants who have been contracted by 
the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this SOR and who need to have access to the records in 
order to assist CMS.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contractual or similar 
agreement with a third party to assist in accomplishing a CMS function 
relating to purposes for this SOR.
    CMS occasionally contracts out certain of its functions when doing 
so would contribute to effective and efficient operations. CMS must be 
able to give a contractor or consultant whatever information is 
necessary for the contractor or consultant to fulfill its duties. In 
these situations, safeguards are provided in the contract prohibiting 
the contractor or consultant from using or disclosing the information 
for any purpose other than that described in the contract and requires 
the contractor or consultant to return or destroy all information at 
the completion of the contract.
    2. To another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent 
pursuant to agreements with CMS to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits; and/or
    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.
    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 purposes of 
determining, evaluating and/or assessing cost, effectiveness, and /or 
the quality of health care services provided in the state.
    The RRB requires NCH information to enable them to assist in the 
implementation and maintenance of the Medicare program.
    SSA 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 the HHS for determining Medicaid 
and Medicare eligibility, for quality control studies, for determining 
eligibility of recipients of assistance under Titles IV, XVIII, and XIX 
of the Act, and for the

[[Page 57017]]

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 SOR.
    3. To Quality Improvement Organization (QIO) in connection with 
review of claims, or in connection with studies or other review 
activities conducted pursuant to Part B of Title XI of the Act and in 
performing affirmative outreach activities to individuals for the 
purpose of establishing and maintaining their entitlement to Medicare 
benefits or health insurance plans.
    QIOs will work to implement quality improvement programs, provide 
consultation to CMS, its contractors, and to state agencies. QIOs will 
assist the state agencies in related monitoring and enforcement 
efforts, assist CMS and intermediaries in program integrity assessment, 
and prepare summary information for release to CMS.
    4. To 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.
    5. To an individual or organization for research, evaluation, or 
epidemiological projects related to the prevention of disease or 
disability, and the restoration or maintenance of health, or payment 
related projects.
    NCH data will provide for research, evaluations and epidemiological 
projects, a broader, longitudinal, national perspective of the status 
of Medicare beneficiaries. CMS anticipates that many researchers will 
have legitimate requests to use these data in projects that could 
ultimately improve the care provided to Medicare beneficiaries and the 
policy that governs the care.
    6. To a Member of Congress or congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    Beneficiaries often request the help of a Member of Congress in 
resolving an issue relating to a matter before CMS. The Member of 
Congress then writes CMS, and CMS must be able to give sufficient 
information to be responsive to the inquiry.
    7. To the Department of Justice (DOJ), court, or adjudicatory body 
when:
    a. The Agency or any component thereof, or
    b. Any employee of the Agency in his or her official capacity, or
    c. Any employee of the Agency in his or her individual capacity 
where the DOJ has agreed to represent the employee, or
    d. The United States Government,

is a party to litigation or has an interest in such litigation, and by 
careful review, CMS determines that the records are both relevant and 
necessary to the litigation.
    Whenever CMS is involved in litigation, or occasionally when 
another party is involved in litigation and CMS's policies or 
operations could be affected by the outcome of the litigation, CMS 
would be able to disclose information to the DOJ, court, or 
adjudicatory body involved.
    8. To a CMS contractor (including, but not 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 or abuse in such program.
    We contemplate disclosing information under this routine use only 
in situations in which CMS may enter into a contract or grant with a 
third party to assist in accomplishing CMS functions relating to the 
purpose of combating fraud and abuse.
    CMS occasionally contracts out certain of its functions when doing 
so 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.
    9. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any state or local governmental agency), that 
administers, or that has the authority to investigate potential fraud 
or abuse in, a health benefits program funded in whole or in part by 
Federal funds, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.
    Other agencies may require NCH information for the purpose of 
combating fraud and abuse in such Federally funded programs.

B. Additional Circumstances Affecting Routine Use Disclosures

    This SOR contains Protected Health Information as defined by HHS 
regulation ``Standards for Privacy of Individually Identifiable Health 
Information'' (45 CFR parts 160 and 164, 65 FR 82462 (Dec. 28, 00), as 
amended by 66 FR 12434 (Feb. 26, 01)). Disclosures of Protected Health 
Information authorized by these routine uses may only be made if, and 
as, permitted or required by the ``Standards for Privacy of 
Individually Identifiable Health Information.''
    In addition, our policy will be to prohibit release even of non-
identifiable data, except pursuant to one of the routine uses, if there 
is a possibility that an individual can be identified through implicit 
deduction based on small cell

[[Page 57018]]

sizes (instances where the patient population is so small that 
individuals who are familiar with the enrollees could, because of the 
small size, use this information to deduce the identity of the 
beneficiary).

IV. Safeguards

A. Administrative Safeguards

    The NCH system will conform to applicable law and policy governing 
the privacy and security of Federal automated information systems. 
These include but are not limited to: the Privacy Act of 1974, Computer 
Security Act of 1987, the Paperwork Reduction Act of 1995, the Clinger-
Cohen Act of 1996, and the Office and Management and Budget (OMB) 
Circular A-130, Appendix III, ``Security of Federal Automated 
Information Resources.'' CMS has prepared a comprehensive system 
security plan as required by OMB Circular A-130. This plan conforms 
fully to guidance issued by the National Institute for Standards and 
Technology (NIST) in NIST Special Publication 800-18, ``Guide for 
Developing Security Plans for Information Technology Systems.'' 
Paragraphs A-C of this section highlight some of the specific methods 
that CMS is using to ensure the security of this system and the 
information within it.
    Authorized users: Personnel having access to the system have been 
trained in Privacy Act and systems security requirements. Employees and 
contractors who maintain records in the system are instructed not to 
release any data until the intended recipient agrees to implement 
appropriate administrative, technical, procedural, and physical 
safeguards sufficient to protect the confidentiality of the data and to 
prevent unauthorized access to the data. In addition, CMS is monitoring 
the authorized users to ensure against excessive or unauthorized use. 
Records are used in a designated work area or workstation and the 
system location is attended at all times during working hours.
    To assure security of the data, the proper level of class user is 
assigned for each individual user as determined at the Agency level. 
This prevents unauthorized users from accessing and modifying critical 
data. The system database configuration includes five classes of 
database users:
    [sbull] Database Administrator class owns the database objects; 
e.g., tables, triggers, indexes, stored procedures, packages, and has 
database administration privileges to these objects;
    [sbull] Quality Control Administrator class has read and write 
access to key fields in the database;
    [sbull] Quality Indicator Report Generator class has read-only 
access to all fields and tables;
    [sbull] Policy Research class has query access to tables, but are 
not allowed to access confidential individual identification 
information; and
    [sbull] Submitter class has read and write access to database 
objects, but no database administration privileges.

B. Physical Safeguards

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

C. Procedural Safeguards

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

V. Effect of the Modified System on Individual Rights

    CMS proposes to establish this system in accordance with the 
principles and requirements of the Privacy Act and will collect, use, 
and disseminate information only as prescribed therein.
    We will only disclose the minimum personal data necessary to 
achieve the purpose of NCH. Disclosure of information from the SOR will 
be approved only to the extent necessary to accomplish the purpose of 
the disclosure. CMS has assigned a higher level of security clearance 
for the information maintained in this system in an effort to provide 
added security and protection of data in this system.
    CMS will take precautionary measures to minimize the risks of 
unauthorized access to the records and the potential harm to individual 
privacy or other personal or property rights. CMS will collect only 
that information necessary to perform the system's functions. In 
addition, CMS will make disclosure from the proposed system only with 
consent of the subject individual, or his/her legal representative, or 
in accordance with an applicable exception provision of the Privacy 
Act.
    CMS, therefore, does not anticipate an unfavorable effect on 
individual privacy as a result of the disclosure of information 
relating to individuals.

Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
09-70-0005

System Name:
    National Claims History, HHS/CMS/OIS.

[[Page 57019]]

Security Classification:
    Level Three Privacy Act Sensitive.

System Location:
    CMS Data Center, 7500 Security Boulevard, North Building, First 
Floor, Baltimore, Maryland 21244-1850.

Categories of Individuals Covered by the System:
    The system 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:
    This system contains Medicare billing and utilization data, name of 
the beneficiary, health insurance claim (HIC) number, diagnosis and 
procedural codes, race, sex, date of birth, residence address, state 
and county code, mailing zip code, as well as the basis for the 
beneficiary's Medicare entitlement. The system contains provider 
characteristics, assigned provider number (facility, referring/
servicing physician), admission date, service dates, diagnosis and 
procedure 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 the 
authority of sections 1874(a) and 1875 of the Act and Title 42 United 
States Code (U.S.C.), section 1395 (ll).

Purpose(s)
    The primary purpose of the SOR 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. 
Information in this system will also be used to: (1) Support 
regulatory, reimbursement, and policy functions performed within the 
Agency or by a contractor or consultant, (2) another Federal or state 
agency, agency of a state government, an agency established by state 
law, or its fiscal agent, (3) Quality Improvement Organizations (QIO), 
(4) other insurers for processing individual insurance claims, (5) 
facilitate research on the quality and effectiveness of care provided, 
as well as payment-related projects, (6) support constituent requests 
made to a congressional representative, (7) support litigation 
involving the Agency, and (8) combat fraud and abuse in certain health 
benefits programs.

Routine Uses of Records Maintained in the System, Including Categories 
or Users and the Purposes of Such Uses:
    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 use in this system meets the compatibility 
requirement of the Privacy Act. In addition, this SOR contains 
Protected Health Information as defined by HHS regulation ``Standards 
for Privacy of Individually Identifiable Health Information'' (45 CFR 
parts 160 and 164, 65 FR 82462 (Dec. 28, 00), as amended by 66 FR 12434 
(Feb. 26, 01)). Disclosures of Protected Health Information authorized 
by these routine uses may only be made if, and as, permitted or 
required by the ``Standards for Privacy of Individually Identifiable 
Health Information.'' It is also our policy to prohibit release even of 
non-identifiable data, except pursuant to one of the routine uses, if 
there is a possibility that an individual can be identified through 
implicit deduction based on small cell sizes (instances where the 
patient population is so small that individuals who are familiar with 
the enrollees could, because of the small size, use this information to 
deduce the identity of the beneficiary). We are proposing to establish 
the following routine use disclosures of information that will be 
maintained in the system:
    1. To Agency contractors or consultants who have been contracted by 
the Agency to assist in accomplishment of a CMS function relating to 
the purposes for this SOR and who need to have access to the records in 
order to assist CMS.
    2. To another Federal or state agency, agency of a state 
government, an agency established by state law, or its fiscal agent 
pursuant to agreements with CMS to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits, and/or
    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.
    c. Assist Federal/state Medicaid programs within the state.
    3. To Quality Improvement Organizations (QIO) in connection with 
review of claims, or in connection with studies or other review 
activities, conducted pursuant to Part B of Title XI of the Social 
Security Act and in performing affirmative outreach activities to 
individuals for the purpose of establishing and maintaining their 
entitlement to Medicare benefits or health insurance plans.
    4. To insurance companies, underwriters, third party 
administrators, employers, self-insurers, group health plans, health 
maintenance organizations, 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 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 third party 
administrator;
    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.
    5. To an individual or organization for research, evaluation, or 
epidemiological projects related to the prevention of disease or 
disability, and the restoration or maintenance of health, or payment 
related projects.
    6. To a Member of Congress or congressional staff member in 
response to an inquiry of the congressional office made at the written 
request of the constituent about whom the record is maintained.
    7. 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

[[Page 57020]]

both relevant and necessary to the litigation.
    8. To a CMS contractor (including, but not 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 or abuse in such program.
    9. To another Federal agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States (including any state or local governmental agency), that 
administers, or that has the authority to investigate potential fraud 
or abuse in, a health benefits program funded in whole or in part by 
Federal funds, when disclosure is deemed reasonably necessary by CMS to 
prevent, deter, discover, detect, investigate, examine, prosecute, sue 
with respect to, defend against, correct, remedy, or otherwise combat 
fraud or abuse in such programs.

Policies and Practices for Storing, Retrieving, Accessing, Retaining, 
and Disposing of Records in the System:
Storage:
    Records are stored on both tape cartridges (magnetic storage media) 
and in a DB2 relational database management environment (DASD data 
storage media).

Retrievability:
    Information is most frequently retrieved by HIC, provider number 
(facility, physician, supplier IDs), service dates, type of bill, 
Medicare status code, diagnoses, procedure codes, and beneficiary state 
code.

Safeguards:
    CMS has safeguards for authorized users and monitors such users to 
ensure against excessive or unauthorized use. Personnel having access 
to the system have been trained in the Privacy Act and systems security 
requirements. Employees who maintain records in the system are 
instructed not to release any data until the intended recipient agrees 
to implement appropriate administrative, technical, procedural, and 
physical safeguards sufficient to protect the confidentiality of the 
data and to prevent unauthorized access to the data.
    In addition, CMS has physical safeguards in place to reduce the 
exposure of computer equipment and thus achieve an optimum level of 
protection and security for the NCH system. For computerized records, 
safeguards have been established in accordance with the Department of 
Health and Human Services (HHS) standards and National Institute of 
Standards and Technology guidelines, e.g., security codes will be used, 
limiting access to authorized personnel. System securities are 
established in accordance with HHS, Information Resource Management 
Circular 10, Automated Information Systems Security Program; 
CMS Automated Information Systems Guide, Systems Securities Policies, 
and OMB Circular No.A-130, Appendix III.

Retention and Disposal:
    Records are maintained with identifiers for all transactions after 
they are entered into the system for a period of 20 years. Records are 
housed in both active and archival files.

System Manager(s) and Address:
    Director, Division of Enrollment and Utilization Data Development, 
Enterprise Databases Group, Office of Information Services, CMS, Room 
N3-16-28, 7500 Security Boulevard, Baltimore, Maryland 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 Record 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).

Record Source Categories:
    Fee-for-Service (FFS) billing and utilization information contained 
in this records system is obtained from the Common Working File, System 
No. 09-70-0526. Medicare+Choice (M+C) organization utilization 
information to be contained in this records system will be obtained 
from a single front-end processor that will function as both a Fiscal 
Intermediary (System No. 09-70-0503) and Carrier (System No. 09-70-
0501).

Systems Exempted from Certain Provisions of the Act:
    None.

[FR Doc. 02-22741 Filed 9-5-02; 8:45 am]
BILLING CODE 4120-03-P