Privacy Act of 1974; Computer Matching Program (CMS Match No. 2004-03)

AGENCY:

Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS).

ACTION:

Notice of computer matching program.

SUMMARY:

In accordance with the requirements of the Privacy Act of 1974, as amended, this notice announces a computer matching agreement between CMS and the Department of the Treasury, Internal Revenue Service (IRS). We have provided background information about the proposed matching program 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 matching program, CMS invites comments on all portions of this notice. See “Effective Dates” section below for comment period.

EFFECTIVE DATES:

CMS filed a report of the Computer Matching Program 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 April 6, 2004. We will not disclose any information under a matching agreement until the later of 40 days after filing a report to OMB and Congress or 30 days after publication in the Federal Register. We may defer implementation of this matching program if we receive comments that persuade us to defer implementation.

ADDRESSES:

The public should address comments to: Director, Division of Privacy Compliance Data Development (DPCDD), Enterprise Databases Group, Office of Information Services, CMS, 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:

Walter Stone, Senior Paralegal Specialist, Division of Data Liaison and Distribution, Enterprise Databases Group, Office of Information Services, CMS, Mail Stop N2-04-27, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. The telephone number is (410) 786-5357, or e-mail wstone@cms.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Description of the Matching Program

A. General

The Computer Matching and Privacy Protection Act (CMPPA) of 1988 (Public Law (Pub. L.) 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the manner in which computer matching involving Federal agencies could be performed and adding certain protections for individuals applying for and receiving Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L.100-508) further amended the Privacy Act regarding protections for such individuals. The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, state, or local government records. It requires Federal agencies involved in computer matching programs to:

1. Negotiate written agreements with the other agencies participating in the matching programs;

2. Obtain the Data Integrity Boards' (DIB) approval of the match agreements;

3. Furnish detailed reports about matching programs to Congress and OMB;

4. Notify applicants and beneficiaries that the records are subject to matching; and,

5. Verify match findings before reducing, suspending, terminating, or denying an individual's benefits or payments.

B. CMS Computer Matches Subject to the Privacy Act

CMS has taken action to ensure that all of the computer-matching programs that this agency participates in comply with the requirements of the Privacy Act of 1974, as amended.

HHS Computer Match No. 2004-03

“Medicare Prescription Drug Discount Card and Transitional Assistance Program”

SECURITY CLASSIFICATION:

Level Three Privacy Act Sensitive

PARTICIPATING AGENCIES:

Centers for Medicare & Medicaid Services (CMS), and

The Department of the Treasury, Internal Revenue Service (IRS)

AUTHORITY FOR CONDUCTING MATCHING PROGRAM:

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MPDIMA) (Pub. L. 108-173, Section 101, 117 Stat. 2066 (2003)) creates a discount prescription drug card program for certain individuals who receive Medicare benefits. This program has a phase-in period ending December 31, 2005, during which time certain individuals are eligible for transitional assistance. Section 101, Part D, Subpart 4 of the MPDIMA adds § 1860D-31(f) to the Social Security Act, requiring the Secretary of the Department of Health and Human Services (HHS) to determine if an individual is eligible for the discount card or for transitional assistance.

Section 105(e)(1) of the MPDIMA adds new section 6103(1)(19) to the Internal Revenue Code (26 U.S.C. 6103(1)(19)), which authorizes the IRS to disclose specified return information of applicants for transitional assistance to officers, employees, and contractors of HHS. This authority does not extend to applicants for other benefits under the MPDIMA.

PURPOSE(S) OF THE MATCHING PROGRAM:

The purpose of this Computer Matching Agreement (CMA) is to establish the conditions, safeguards, and procedures under which CMS will conduct a computer-matching program with the IRS to determine eligibility for the Transitional Assistance Program. The Transitional Assistance Program provides up to $600 to purchase prescription drugs to individuals whose annual income does not exceed 135% of the applicable Federal poverty level and who have no disqualifying outpatient drug coverage. This match will assist CMS to rapidly identify eligible applicants for this program.

CATEGORIES OF RECORDS AND INDIVIDUALS COVERED BY THE MATCH:

Under this matching agreement, CMS will provide to the IRS an initial file containing the name, Social Security Number (SSN), and Health Insurance Claims Number (HICN) for all Medicare beneficiaries. This information will be taken from CMS's Medicare Beneficiary Database (CMS System No. 09-70-0536). IRS will match this information with the individual's taxpayer income information from the CADE—Individual Master File (IRS System No. 24.030), and create a separate file consisting of the name, SSN, and return information specified in 26 U.S.C. 6103(1)(19) of each individual on the initial list. IRS will maintain this separate list for purposes of responding to CMS inquiries as to whether the income of a transitional assistance applicant exceeds the threshold amount. When Medicare beneficiaries apply for transitional assistance, and CMS cannot otherwise verify the income information provided on an application, CMS will disclose to IRS that applicant's name, SSN, HICN, and threshold amount. IRS will match this information with the separate list created as described above, and return to CMS a report file containing the applicant's SSN, HICN, and specified return information. CMS will use the IRS response to further process benefits applications under the transitional assistance program.

INCLUSIVE DATES OF THE MATCH:

The Matching Program shall become effective no sooner than 40 days after the report of the Matching Program is sent to OMB and Congress, or 30 days after publication in the Federal Register, which ever is later. The match is expected to begin on May 1, 2004. The matching program will continue for 18 months from the effective date and may be extended for up to an additional 12 months thereafter, if certain conditions are met.