July 6, 2000

State Medicaid Program and the State Children's Health Insurance Program - Limited Disclosure of Children's Free and Reduced Price Meal or Free Milk Eligibility Information

This memorandum addresses disclosure of children's free and reduced price eligibility information for the State Medicaid Program (State Medicaid) and the State Children's Health Insurance Program (SCHIP). The Agricultural Risk Protection Act of 2000, enacted on June 20, 2000, amended the National School Lunch Act (NSLA), (42 U.S.C. 1751(b)(2)(C)), to add State Medicaid under title XIX of the Social Security Act (42 U.S.C. 1396 et. seq.) and the SCHIP under title XXI of that Act (42 U.S.C. 1397aa et seq.) to programs in Section 9(b)(2)(C) of the NSLA that are authorized limited access to children's free and reduced price meal or free milk eligibility information. A memorandum issued on December 7, 1998, "Limited Disclosure of Children’s Free and Reduced Price Meal or Free Milk Eligibility Information (SP 99-3); (CACFP 99-2)" addresses disclosure of free and reduced price meal or free milk eligibility information to other programs and entities.The issues of privacy and confidentiality of personal data are complicated as well as sensitive.

Therefore, prior to developing State and local disclosure policies, we recommend that determining agencies discuss the disclosure provisions with their legal counsel. At a minimum, determining agencies that decide to disclose information that identifies individuals must follow these guidelines. These guidelines apply to eligibility information regardless of the manner in which the information is maintained including, but not limited to, print, tape, microfilm, microfiche, and electronic communication.

For purposes of this memorandum a "determining agency" means the State agency, school food authority, school (including a private school or charter school), child care institution or Summer Food Service Program sponsor that makes the free and reduced price meal or free milk eligibility determination.

Disclosure of Children's Eligibility Information For Health Insurance Programs

Is disclosure of children's free and reduced price meal or free milk eligibility information for State Medicaid and SCHIP required?

Schools and institutions (determining agencies) may disclose free and reduced price meal or free milk eligibility information to identify and enroll eligible children in State Medicaid or SCHIP, provided the determining agency's State agency and determining agency elect to do so. Determining agencies are not required to disclose eligibility information. However, we encourage cooperation with State and local administrators of State Medicaid and SCHIP because studies show that many children eligible for free and reduced price meals and free milk do not have health insurance.

What information may be disclosed for use by State Medicaid and SCHIP and what health agencies or health insurance programs are eligible to receive the information?

Determining agencies may disclose names, eligibility status (whether they are eligible to receive free meals or free milk or reduced price meals), and any other eligibility information obtained through the free and reduced price meal and free milk eligibility process (including all information on the application or obtained through direct certification or verification) to persons directly connected with the administration of State Medicaid and/or SCHIP.

Who are "persons directly connected" with the administration of State Medicaid and SCHIP?

Persons directly connected with the administration of State Medicaid and SCHIP for purposes of disclosure of free and reduced price meal and free milk eligibility information are State employees and persons authorized under Federal and State Medicaid and SCHIP requirements to carry out initial processing of applications or to make eligibility determinations. Check with your State Medicaid/SCHIP coordinator to determine the persons or entities in your State authorized to enroll children in Medicaid and SCHIP.

Are there restrictions on how children's free and reduced price eligibility information may be used by State Medicaid and SCHIP?

State Medicaid and SCHIP agencies and health insurance program operators receiving children's free and reduced price meal or free milk eligibility information may only use that information to enroll children in State Medicaid or SCHIP. The State Medicaid or SCHIP enrollment process may include seeking to identify and identifying children from low income households, who are potentially eligible for State Medicaid or SCHIP for the purpose of enrolling them in State Medicaid or SCHIP.

Must households be notified that their free and reduced price meal or free milk eligibility information may be disclosed?

For any disclosures to State Medicaid and/or SCHIP, parents/guardians must be notified of the potential disclosure and given the opportunity to elect not to have their children's information disclosed. The notification must inform the parents/guardians that they are not required to consent to the disclosure, that the information will be used to enroll children in a health insurance program, and that their decision will not affect their children's eligibility for free and reduced price meals or free milk. The notification may be included in the letter/notice to parents/guardians that accompanies the free and reduced price meal or free milk application, on the application itself or in a separate notice provided to parents/guardians. The notice must be given prior to the disclosure and parents/guardians should be given a reasonable time limit to respond. For children who are determined eligible though direct certification, the notice of potential disclosure may be in the document informing parents/guardians of their children's eligibility for free meals through direct certification.

Should we have an agreement with State Medicaid and/or SCHIP?

The determining agency must have a written agreement with the State or local agency or agencies administering State Medicaid and/or SCHIP prior to disclosing children's free and reduced price meal or free milk eligibility information. At a minimum, the agreement must identify the health insurance program or health agency receiving children's eligibility information; describe the information that will be disclosed and specify that the information must only be used to seek to enroll children in State Medicaid or SCHIP; describe how the information will be protected from unauthorized uses and disclosures; describe the penalties for unauthorized disclosure; and be signed by both the determining agency and the State Medicaid/SCHIP program or agency receiving the children's eligibility information.

What are the requirements for disclosure of social security numbers?

When disclosing or using the social security number provided by the household on the application for any purpose other than the program for which the number was collected, the determining agency must modify the notice required by the Privacy Act of 1974 concerning the potential uses of the social security number. The notice must inform households of the additional intended uses of the number.

Are there any penalties for improper disclosure?

The NSLA establishes a fine of not more than $1000 or imprisonment of not more than 1 year, or both, for publishing, divulging, disclosing, or making known in any manner or extent not authorized by Federal law, any eligibility information. This includes the disclosure of eligibility information by one entity authorized under the statute to receive the information to any other entity, even if that entity would otherwise be authorized to receive the information directly from the determining agency.

These guidelines are effective Oct. 1, 2000, and are subject to change pending issuance of a final rule addressing the disclosure provisions for State Medicaid and SCHIP.

SIGNED

STANLEY C. GARNETT
Director
Child Nutrition Division

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