[Federal Register: July 15, 2005 (Volume 70, Number 135)]
[Notices]
[Page 41035-41039]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jy05-78]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Privacy Act of 1974; Report of a New System of Records
AGENCY: Department of Health and Human Services (HHS), Center for
Medicare & Medicaid Services (CMS).
ACTION: Notice of a new System of Records (SOR).
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SUMMARY: In accordance with the requirements of the Privacy Act of
1974, we are proposing to establish a new SOR titled, ``Medicare
Retiree Drug Subsidy Program (RDSP), System No. 09-70-0550.'' Under
section 1860D-22 of the Social Security Act (the Act), employers and
unions who continue to offer prescription drug coverage to their
qualifying covered retirees are eligible to receive a tax-free subsidy
for allowable drug costs. This amended provision of the Act is mandated
by section 101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173). A qualifying covered
retiree is a Part D eligible individual who is a participant or the
spouse or dependent of a participant; covered under employment-based
retiree health coverage that qualifies as a qualified retiree
prescription drug plan; and not enrolled in a Part D plan. Employment-
Based Retiree Health Coverage is defined as coverage of health care
costs under a group health plan based on an individual's status as a
retired participant in the plan, or as the spouse or dependent of a
retired participant. The term includes coverage provided by voluntary
insurance coverage as a result of a statutory or contractual
obligation. The Medicare prescription drug benefit and retiree drug
subsidy represent additional funding sources that can help employers
and unions continue to provide high quality drug coverage for their
retirees.
The purpose of this system is to collect and maintain information
on individuals who are qualifying covered retirees so that accurate and
timely subsidy payments may be made to plan sponsors who continue to
offer actuarially equivalent prescription drug coverage to the
qualifying covered retirees. Information retrieved from this system
will also be disclosed to: (1) Support regulatory, reimbursement, and
policy functions performed within the agency, or by a contractor or
consultant; (2) support constituent requests made to a congressional
representative; (3) support litigation involving the agency; and (4)
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 DATE: CMS filed a new SOR 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 07/13/2005. We will not disclose any information under a
routine use until 30 days after publication. We may defer
implementation of this SOR or one or more of the routine use statements
listed below if we receive comments that persuade us to defer
implementation.
ADDRESSES: The public should address comment to the CMS Privacy
Officer, Mail Stop N2-04-27, 7500 Security Boulevard, Baltimore,
Maryland 21244-1850. Comments received will be available for review at
this location, by appointment, during regular business hours, Monday
through Friday from 9 a.m.-3 p.m., eastern daylight time.
FOR FURTHER INFORMATION CONTACT: Brian Maloney, Health Insurance
Specialist, Employer Policy & Operations Group, Centers for Beneficiary
Choices, CMS, Mail Stop C1-22-06, 7500 Security Boulevard, Baltimore,
Maryland 21244-1849. He can be reached at (410) 786-0226, or contact
via e-mail at Brian.Maloney@cms.hhs.gov.
SUPPLEMENTARY INFORMATION: The intent of the Medicare Retiree Drug
Subsidy Program is to offer qualified retiree prescription drug plans
financial assistance with a portion of their prescription drug costs
and thereby ``help employers retain and enhance their prescription drug
coverage so that the current erosion in coverage would plateau or even
improve.'' By making a tax-free subsidy for 28 percent of allowable
prescription drug costs available to qualified retiree prescription
drug plans, the Medicare Retiree Drug Subsidy Program significantly
reduces financial liabilities associated with employers' retiree drug
coverage and encourages employers to continue assisting their retirees
with prescription drug coverage.
[[Page 41036]]
A Qualified Retiree Prescription Drug Plan is defined as an
employment-based retiree health coverage of a Part D eligible
individual who is a participant or beneficiary under such coverage. The
sponsor of the plan must provide to the Secretary, annually, an
attestation that the actuarial value of the prescription drug coverage
under the plan is at least equal to the actuarial value of standard
prescription drug coverage.
The term Sponsor is defined as a plan sponsor in relation to a
group health plan, except that, in the case of a plan maintained
jointly by one employer and an employee organization and with respect
to which the employer is the primary source of financing. A Group
Health Plan include the following: (1) Federal and State Governmental
Plans, a plan established or maintained for its employees by the
Government of the United States, by the government of any State or
political subdivision thereof, or by any agency or instrumentality; (2)
Collectively Bargained Plans, a plan established or maintained under or
pursuant to one or more collective bargaining agreement; (3) Church
Plan, a plan established and maintained for its employees, or their
beneficiaries, by a church or by a convention or association of
churches which is exempt from tax under section 501 of the Internal
Revenue Code of 1986; or (4) Health Reimbursement Arrangement (HRA), a
health Flexible Spending Arrangement (FSA), a health savings account
(HSA), or an Archer MSA.
I. Description of the Proposed System of Records
A. Statutory and Regulatory Basis for SOR
Authority for maintenance of this system is given under section
1860D-22 of the Act (Title 42 United States Code (U.S.C.) 1302, 1395w-
101 through 1395w-152, and 1395hh.) These provisions of the Act are
amended by section 101 of the MMA and its implementing regulations
codified at Title 42 Code of Federal Regulations (CFR) Part 423,
Subpart R.
B. Collection and Maintenance of Data in the System
Information in this system is maintained on qualifying covered
retirees who are Part D eligible individuals covered under a qualified
retiree prescription drug plan. Information maintained in this system
include, but are not limited to, standard data for identification such
as Plan Sponsor Identification Number, Application Identification
Number, Benefit Option Identifier, Coverage Effective Date, Coverage
Termination Date, Health Insurance Claim Number (HICN), Social Security
Number (SSN), gender, first name, last name, middle initial, date of
birth, relationship to member and Medicare eligibility and enrollment
status.
II. Agency Policies, Procedures, and Restrictions on the Routine Use
A. Agency Policies, Procedures, and Restrictions on the Routine Use
The Privacy Act permits us to disclose information without an
individual's consent if the information is to be used for a purpose
that is compatible with the purpose(s) for which the information was
collected. Any such disclosure of data is known as a ``routine use.''
The government will only release RDSP 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 RDSP. 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 that the data is being collected, e.g., to assist in the proper
subsidy payments to sponsors of a qualifying covered retiree
prescription drug plan;
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 who have been engaged by
the agency to assist in the performance of an activity related to this
system and who need to have access to the records in order to perform
the activity.
We contemplate disclosing information under this routine use only
in situations in which CMS may enter into a contractual or similar
agreement with a third party to assist in accomplishing CMS function
relating to purposes for this system.
CMS occasionally contracts out certain of its functions when doing
so would contribute to effective and efficient operations. CMS must be
able to give a contractor 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 a member of congress or to 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 sometimes 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.
3. 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
[[Page 41037]]
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.
4. 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 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 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.
5. 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 RDSP information for the purpose of
combating fraud and abuse in such Federally-funded programs.
B. Additional Provisions Affecting Routine Use Disclosures
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, 65 FR 82462 (12-28-00),
subparts A and E. Disclosures of PHI 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 not
directly identifiable, except pursuant to one of the routine uses or if
required by law, if we determine there is a possibility that an
individual can be identified through implicit deduction based on small
cell sizes (instances where the patient population is so small that
individuals 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; HHS Information
Systems Program Handbook and the CMS Information Security Handbook.
V. Effects of the Proposed System of Records 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. Data in this
system will be subject to the authorized releases in accordance with
the routine uses identified in this system of records.
CMS will take precautionary measures (see item IV above) to
minimize the risks of unauthorized access to the records and the
potential harm to individual privacy or other personal or property
rights of patients whose data are maintained in the system. CMS will
collect only that information necessary to perform the system's
functions. In addition, CMS will make disclosure from the proposed
system only with consent of the subject individual, or his/her legal
representative, or in accordance with an applicable exception provision
of the Privacy Act. CMS, therefore, does not anticipate an unfavorable
effect on individual privacy as a result of information relating to
individuals.
Dated: July 11, 2005.
John R. Dyer,
Chief Operating Officer, Centers for Medicare & Medicaid Services.
System No. 09-70-0550.
System Name:
``Medicare Retiree Drug Subsidy Program (RDSP), HHS/CMS/CBC.''
Security Classification:
Level Three Privacy Act Sensitive Data.
System Location:
Group Health Incorporated, 441 Ninth Avenue, New York, NY 10001-
1681, and Centers for Medicare & Medicaid Services (CMS) Data Center,
7500 Security Boulevard, North Building, First Floor, Baltimore,
Maryland 21244-1850.
Categories of Individuals Covered By the System:
Information in this system is maintained on qualifying covered
retirees who are Medicare Part D eligible
[[Page 41038]]
individuals covered under a qualified retiree prescription drug plan.
Categories of Records in the System:
Information maintained in this system include, but are not limited
to, standard data for identification such as Plan Sponsor
Identification Number, Application Identification Number, Benefit
Option Identifier, Coverage Effective Date, Coverage Termination Date,
Health Insurance Claim Number (HICN), Social Security Number (SSN),
gender, first name, last name, middle initial, date of birth,
relationship to member and Medicare eligibility and enrollment status.
Authority for Maintenance of the System:
Authority for maintenance of this system is given under section
1860D-22 of the Act (Title 42 United States Code (U.S.C.) 1302, 1395w-
101 through 1395w-152, and 1395hh.) These provisions of the Act are
amended by section 101 of the MMA and its implementing regulations
codified at Title 42 Code of Federal Regulations (CFR) Part 423,
Subpart R.
Purpose(s) of the System:
The purpose of this system is to collect and maintain information
on individuals who are qualifying covered retirees so that accurate and
timely subsidy payments may be made to plan sponsors who continue to
offer actuarially equivalent prescription drug coverage to the
qualifying covered retirees. Information retrieved from this system
will also be disclosed to: (1) Support regulatory, reimbursement, and
policy functions performed within the agency, or by a contractor or
consultant; (2) support constituent requests made to a congressional
representative; (3) support litigation involving the agency; and (4)
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. 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.'' We are proposing to establish the following routine use
disclosures of information maintained in the system. Information will
be disclosed:
1. To agency contractors or consultants who have been engaged by
the agency to assist in the performance of a service related to this
system and who need to have access to the records in order to perform
the activity.
2. To a member of congress or to 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.
3. 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.
4. 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 or abuse in such program.
5. 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 Provisions Affecting Routine Use Disclosures. This
system contains Protected Health Information as defined by 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 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 complaint population is so small that
individuals who are familiar with the complainants could, because of
the small size, use this information to deduce the identity of the
complainant).
Policies and Practices for Storing, Retrieving, Accessing, Retaining,
and Disposing of Records in the System:
Storage:
All records are stored electronically.
Retrievability:
Information is retrievable by Plan Sponsor identification number,
Benefit Option Identifier, and Health Insurance Claim Number or Social
Security Number.
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 implements 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
[[Page 41039]]
Institute of Standards and Technology publications; HHS Information
Systems Program Handbook and the CMS Information Security Handbook.
Retention and Disposal:
Records are maintained in the active files for a period of 15
years. The records are then retired to archival files maintained at the
Health Care Data Center. 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, Employer Policy & Operations Group, CMS, Room C1-22-06,
7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Notification Procedure:
For purpose of access, the subject individual should write to the
system manager who will require the system name, HICN, address, date of
birth, and gender, and for verification purposes, the subject
individual's name (woman's maiden name, if applicable), and SSN.
Furnishing the SSN is voluntary, but it may make searching for a record
easier and prevent delay.
Record Access Procedure:
For the purpose of access, use the same procedures outlines 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).
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).
Record Source Categories:
Records maintained in this system will be derived from Medicare
Beneficiary Database system of records and from medical plans and plan
sponsors.
Systems Exempted from Certain Provisions of the Act:
None.
[FR Doc. 05-14079 Filed 7-14-05; 8:45 am]
BILLING CODE 4120-03-P