[Federal Register Volume 70, Number 200 (Tuesday, October 18, 2005)]
[Notices]
[Pages 60530-60535]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20909]



[[Page 60530]]

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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).

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, we are proposing to modify or alter a SOR titled, ``Medicare 
Managed Care System (MMCS), No. 09-70-4001.'' MMCS processes 
beneficiary enrollment and creates beneficiary level payments for the 
Managed Care Organizations (MCO). We propose to broaden the scope of 
this system by adding the Medicare Part D Program under Title XVIII. 
The Medicare+Choices Program has been changed to the Medicare Advantage 
(MA) Program. The MA was mandated by the Balance Budget Act (BBA) of 
1997 (Public Law (Pub. L.) 105-33). To more accurately reflect the 
changes proposed for this system, we will modify the name to read: 
``Medicare Advantage Prescription Drug (MARx) System.'' The enhanced 
system will continue to perform all current MMCS processing 
requirements. In addition, MARx will be a stand alone system that will 
include the processing of all enrollment/disenrollment transactions 
associated with the Part D Program. MARx will include the following: 
Health Maintenance Organizations (HMO), Health Care Prepayment Plan 
(HCPP), Medicare Advantage Organizations (MAO), Medicare Advantage 
Prescription Drug (MAPD) Plans and Prescription Drug Plans (PDP).
    On December 8, 2003, Congress passed the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-
173). MMA amends the Social Security Act (the Act) by adding the 
Medicare Part D Program under Title XVIII and mandate that CMS 
establish a voluntary Medicare prescription drug benefit program 
effective January 1, 2006. Under the new Medicare Part D benefit, the 
Act allows Medicare payment to MA plans that contract with CMS to 
provide qualified Part D prescription drug coverage as described in 42 
Code of Federal Regulations (CFR) 417 and 422.
    We are modifying the language in some of the routine uses to 
provide clarity to CMS's intention to disclose individual-specific 
information contained in this system. The routine uses will remain 
prioritized according to their proposed usage. Information previously 
retrieved from the Enrollment Database (System No. 09-70-0502) will now 
be retrieved by the Medicare Beneficiary Database (MBD) (System No. 09-
70-0536). 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 maintain a master file of MA 
and MAPD plan members for accounting and payment control; expedite the 
exchange of data with MA and MAPD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled MA members; and 
track participation of the prescription drug benefits provided under 
private prescription drug plans and Medicare employer plans. 
Information in this system will also be disclosed to: (1) Support 
regulatory, reimbursement, and policy functions performed by a 
contractor or consultant contracted by the Agency; (2) support another 
Federal or State agency, agency of a state government, an agency 
established by state law, or its fiscal agent; (3) assist provider and 
suppliers of service directly or dealing through contractors, fiscal 
intermediaries (FI) or carriers for the administration of Title XVIII; 
(4) assist third party contacts 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; (5) assist 
insurance companies, third party administrators, employers, self-
insurers, managed care organizations, and other supplemental insurers; 
(6) facilitate research on the quality and effectiveness of care 
provided, as well as payment-related projects; (7) support constituent 
requests made to a congressional representative; (8) support litigation 
involving the Agency, and (9) 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 October 14, 2005. To ensure that all 
parties have adequate time in which to comment, the modified or altered 
SOR, including routine uses, will become effective 40 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: CMS Privacy Officer, 
Division of Privacy Compliance Data Development (DPCDD), 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: Mary Sincavage, Division Director, 
Division of Medicare Advantage Appeals and Payment Systems, Information 
Services Modernization Group, Office of Information Services, CMS, Room 
N3-16-24, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. The 
telephone number is 410-786-1163.

SUPPLEMENTARY INFORMATION: The Medicare Managed Care System (MMCS) is 
the redesign of the legacy system Group Health Plan (GHP) system. MMCS 
processes beneficiary enrollment and creates beneficiary level payments 
for the Managed Care Organizations (MCO). The beneficiary level 
payments are aggregated to the MCO level and sent to the Automated Plan 
Payment System (APPS) for additional organization level adjustments 
before payments are sent to the MCOs. An independent technical 
evaluation of CMS' managed care system found that without major 
enhancements, MA provisions could not be supported by existing Medicare 
systems. Also, the comprehensive review of existing systems was 
necessary in order to proceed with a development effort that would 
ensure those future customer service and program management objectives 
were met.
    The CMS has long realized that the Medicare program is in the 
middle of rapidly changing health insurance industry characterized by 
an expansion of service delivery models and payment options. The MA 
provisions of the BBA of 1997 (Pub. L. 105-33) has made the challenge 
of managing beneficiary

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health choices one of the most critical challenges facing CMS and the 
health industry at large. To be of maximum use, the data must be 
organized and categorized into a comprehensive system. CMS sought to 
identify key sources, including both organizations and systems that 
could provide valid and reliable information. Medicare will no longer 
exist within an environment characterized by limited health insurance 
options and standard delivery models.
    MARx will recalculate payments due to Part D risk adjustment factor 
reconciliation. MARx will receive low income subsidy status information 
from the MBD, including notification of any changes. MARx will 
calculate adjustments due to any retroactive changes to low income 
subsidy status. MARx is not responsible for sending Social Security 
Administration (SSA) the Part D plan data. It is assumed that this will 
come from the Health Plan Management System (HPMS) (System No. 09-70-
4004). Fallback plans will not be paid by MARx. MARx enrollments may be 
rejected if a beneficiary is currently enrolled in a plan that is part 
of the retiree drug subsidy (RDS). MARx will notify the RDS of any 
rejected enrollments due to this situation. Plans will be notified on a 
weekly basis, if MARx has adjusted the premium or if SSA/Railroad 
Retirement Board/Office of Personnel Management cannot deduct the 
premium. Additionally, MARx is a stand alone system that will be 
processing all enrollment/disenrollment transactions associated with 
the Part D program.

I. Description of the Modified System of Records

    A. Statutory and Regulatory Basis for the System. Authority for 
maintenance of the system is given under Section 101 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) 
(Pub. L. 108-173) amended the Title XVIII of the Social Security Act. 
Authority for maintenance of the system is also given under the 
provisions of Sec. Sec.  1833(a)(1)(A), 1860, 1866, and 1876 of Title 
XVIII of the Act (42 CFR 417 and 422).
    B. Collection and Maintenance of Data in the System. The system 
will include information on recipients of Medicare hospital insurance 
(Part A) and Medicare medical insurance (Part B) and recipients of the 
Prescription Drug Benefits Program (Part D) enrolled in the MA Program. 
The system will also include information about a beneficiary's 
entitlement to Medicare benefits and enrollment in Medicare Programs, 
prescription drug coverage and supplementary medical claims 
information. The system will contact identifying information such as 
beneficiary name, health insurance claim number, social security 
number, and other demographic information.

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

    A. 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 MARx information that can be 
associated with an individual as provided for under ``Section III. 
Modified 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 MARx. CMS has the following policies and procedures 
concerning disclosures of information that will be maintained in the 
system. Disclosure of information from the SOR 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 data is being collected; e.g., to maintain a master file of MA 
and MAPD plan members for accounting and payment control; expedite the 
exchange of data with MA and MAPD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled MA members; and 
track participation of the prescription drug benefits provided under 
private prescription drug plans and Medicare employer plans.
    2. Determines that the purpose for which the disclosure is to be 
made can only be accomplished if the record is provided in individually 
identifiable form;
    a. 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
    b. 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. Modified 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 MARx 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 are proposing 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 system 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 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 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 to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as

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necessary to enable such agency to fulfill a requirement of a Federal 
statute or regulation that implements a health benefits program funded 
in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    Other Federal or state agencies in their administration of a 
Federal health program may require MARx information in order to support 
evaluations and monitoring of Medicare claims information of 
beneficiaries, including proper reimbursement for services provided.
    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 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 MARx 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 to 
providers and suppliers of services directly or through fiscal 
intermediaries or carriers for the administration of Title XVIII of the 
Act.
    3. To providers and suppliers of services directly or dealing 
through fiscal intermediaries or carriers for the administration of 
Title XVIII of the Act.
    Providers and suppliers of services require MARx 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 third party contacts 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 party contacts require MARx 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 insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations or a 
competitive medical plan with a Medicare contract, or a Medicare-
approved health care prepayment plan), directly or through a 
contractor, and other groups providing protection for their enrollees. 
Information to be disclosed shall be limited to Medicare entitlement 
data. 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 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    Other insurers, TPAs, HMOs, and HCPPs may require MARx information 
in order to support evaluations and monitoring of Medicare claims 
information of beneficiaries, including proper reimbursement for 
services provided.
    6. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    MARx data will provide for research, evaluation, 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.
    7. To a Member of Congress or a 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 some issue relating to a matter before CMS. The Member of 
Congress then writes CMS, and CMS must be able to give sufficient 
information tin response to the inquiry.
    8. 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, 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.
    9. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program,

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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 programs.
    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.
    10. 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 MARx 
information for the purpose of combating fraud and abuse in such 
Federally-funded programs.
    B. Additional Circumstances Affecting Routine Use Disclosures. This 
system 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 (12-28-00), 
Subparts A and E. The protected health information is collected from 
the Plan during the enrollment process and passed onto the Medicare 
Beneficiary Database. These elements include the Beneficiary Name, Sex, 
Date of Birth, and Health Insurance Claim Number. 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 data 
not directly identifiable information, 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 who are familiar with the 
enrollees could, because of the small size, use this information to 
deduce the identity of the beneficiary).

IV. Safeguards

    CMS has safeguards in place for authorized users and monitors such 
users to ensure against excessive or unauthorized use. Personnel having 
access to the system have been trained in the Privacy Act and 
information security requirements. Employees who maintain records in 
this system are instructed not to release data until the intended 
recipient agrees to implement appropriate management, operational and 
technical safeguards sufficient to protect the confidentiality, 
integrity and availability of the information and information systems 
and to prevent unauthorized access.
    This system will conform to all applicable Federal laws and 
regulations and Federal, HHS, and CMS policies and standards as they 
relate to information security and data privacy. These laws and 
regulations include 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 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 
MARx. Disclosure of information from the system 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.

    Dated: October 12, 2005.
Lori Davis,
Acting Chief Operating Officer, Centers for Medicare & Medicaid 
Services.
SYSTEM NO. 09-70-4001.

SYSTEM NAME:
    ``Medicare Advantage Prescription Drug (MARx)'' System HHS/CMS/OIS.

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 will include information on recipients of Medicare 
hospital insurance (Part A) and Medicare medical insurance (Part B) and 
recipients of the Prescription Drug Benefits Program (Part D) enrolled 
in the Medicare Advantage (MA) Program.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system will also include information about a beneficiary's 
entitlement to Medicare benefits and enrollment in Medicare Programs, 
prescription drug coverage and supplementary medical claims 
information. The system will contain identifying information such as 
beneficiary name, health insurance claim number, social security 
number, and other demographic information.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    Authority for maintenance of the system is given under Section 101 
of the

[[Page 60534]]

Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(MMA) (Pub. L. 108-173) amended the Title XVIII of the Social Security 
Act. Authority for maintenance of the system is also given under the 
provisions of Sec. Sec.  1833(a)(1)(A), 1860, 1866, and 1876 of Title 
XVIII of the Act (42 CFR 417 and 422).

PURPOSE(S) OF THE SYSTEM:
    The primary purpose of the SOR is to maintain a master file of MA 
and MAPD plan members for accounting and payment control; expedite the 
exchange of data with MA and MAPD; control the posting of pro-rata 
amounts to the Part B deductible of currently enrolled MA members; and 
track participation of the prescription drug benefits provided under 
private prescription drug plans and Medicare employer plans. 
Information in this system will also be disclosed to: (1) Support 
regulatory, reimbursement, and policy functions performed by a 
contractor or consultant contracted by the Agency; (2) support another 
Federal or State agency, agency of a state government, an agency 
established by state law, or its fiscal agent; (3) assist provider and 
suppliers of service directly or dealing through contractors, fiscal 
intermediaries (FI) or carriers for the administration of Title XVIII; 
(4) assist third party contacts 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; (5) assist 
insurance companies, third party administrators, employers, self-
insurers, managed care organizations, and other supplemental insurers; 
(6) facilitate research on the quality and effectiveness of care 
provided, as well as payment-related projects; (7) support constituent 
requests made to a congressional representative; (8) support litigation 
involving the Agency, and (9) 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:
    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 MARx 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 are proposing 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 system 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 to:
    a. Contribute to the accuracy of CMS's proper payment of Medicare 
benefits,
    b. Enable such agency to administer a Federal health benefits 
program, or as necessary to enable such agency to fulfill a requirement 
of a Federal statute or regulation that implements a health benefits 
program funded in whole or in part with Federal funds, and/or
    c. Assist Federal/state Medicaid programs within the state.
    3. To providers and suppliers of services directly or through 
fiscal intermediaries or carriers for the administration of Title XVIII 
of the Act.
    4. To third party contacts 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 insurance companies, third party administrators (TPA), 
employers, self-insurers, managed care organizations, other 
supplemental insurers, non-coordinating insurers, multiple employer 
trusts, group health plans (i.e., health maintenance organizations or a 
competitive medical plan with a Medicare contract, or a Medicare-
approved health care prepayment plan), directly or through a 
contractor, and other groups providing protection for their enrollees. 
Information to be disclosed shall be limited to Medicare entitlement 
data. 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 
identified individual's insurance claims; and
    c. Safeguard the confidentiality of the data and prevent 
unauthorized access.
    6. To an individual or organization for a research, evaluation, or 
epidemiological project related to the prevention of disease or 
disability, the restoration or maintenance of health, or payment-
related projects.
    7. To a Member of Congress or a 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.
    8. 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.
    9. To a CMS contractor (including, but not limited to FIs and 
carriers) that assists in the administration of a CMS-administered 
health benefits program,

[[Page 60535]]

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 programs.
    10. 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.
    B. Additional Circumstances Affecting Routine Use Disclosures. This 
system contains Protected Health Information as defined by the 
Department of Health and Human Services (HHS) regulation ``Standards 
for Privacy of Individually Identifiable Health Information'' (45 CFR 
Parts 160 and 164, 65 Fed. Reg. 82462 (12-28-00), Subparts A and E. 
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 data 
not directly identifiable information, 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 who are familiar with the 
enrollees 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:
    Computer diskette and on magnetic storage media.

RETRIEVABILITY:
    Information can be retrieved by name and health insurance claim 
number of the beneficiary.

SAFEGUARDS:
    CMS has safeguards in place for authorized users and monitors such 
users to ensure against excessive or unauthorized use. Personnel having 
access to the system have been trained in the Privacy Act and 
information security requirements. Employees who maintain records in 
this system are instructed not to release data until the intended 
recipient agrees to implement appropriate management, operational and 
technical safeguards sufficient to protect the confidentiality, 
integrity and availability of the information and information systems 
and to prevent unauthorized access.
    This system will conform to all applicable Federal laws and 
regulations and Federal, HHS, and CMS policies and standards as they 
relate to information security and data privacy. These laws and 
regulations include 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. Office of Management and Budget 
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 with identifiers for all transactions after 
they are entered into the system for a period of 6 years and 3 months. 
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 the Department of 
Justice.

SYSTEM MANAGER AND ADDRESS:
    Director, Division of Medicare Advantage Appeals and Payment 
Systems, Information Services Modernization Group, Office of 
Information Services, CMS, Room N3-16-24, 7500 Security Boulevard, 
Baltimore, Maryland 21244-1850.

NOTIFICATION PROCEDURE:
    For purpose of access, the subject individual should write to the 
systems manager who will require the system name, SSN, address, date of 
birth, sex, and for verification purposes, the subject individual's 
name (woman's maiden name, if applicable). 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 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:
    Data for this system is collected from MAs and MAPDs (which 
obtained the data from the individuals concerned), Social Security 
Administration, and the Medicare Beneficiary Database system of 
records.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS OF THE ACT:
    None.
[FR Doc. 05-20909 Filed 10-17-05; 8:45 am]
BILLING CODE 4120-03-P