Medicare Modernization Act

·         Name of project.

     Medicare Modernization Act

·         Unique project identifier.


·         Privacy Impact Assessment Contact.

     Associate Commissioner
     Office of Retirement and Survivors Insurance Systems
     Social Security Administration
     6401 Security Boulevard
     Baltimore, MD 21235   

·         Describe the information to be collected, why the information is being collected, the intended use of the information and with whom the information will be shared.

Medicare Part D System

On December 8, 2003, the President signed into law Public Law 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003.  This new law amended section 1144 of the Social Security Act to require the Commissioner of Social Security to conduct additional outreach efforts to identify individuals entitled to benefits, or enrolled under the Medicare program under Title XVIII, who may be eligible for transitional assistance under the Medicare Prescription Drug Discount Card Program and premium and cost-sharing subsidies under the Prescription Drug Card Part D Program.  SSA continues to have the responsibility for outreach to low-income Medicare beneficiaries for payment of Medicare cost-sharing under the Medicaid program.

The MMA requires the Commissioner of Social Security to verify the eligibility of an individual who seeks to be considered as a subsidy eligible individual under the MMA and who self-certifies his/her income, resources and family size.  SSA shall determine whether a part D eligible individual residing in a State is a subsidy eligible individual and whether the individual is an individual with income up to 150 percent of the Federal poverty guidelines.  In order to make that determination, SSA will collect certain information for those individuals who apply for the Part D subsidy. This information may come from the individual applicants as well as other federal agencies, such as the Department of Veterans Affairs, the Railroad Retirement Board, the Office of Personnel Management, and the Office of Child Support Enforcement.

SSA is establishing a database to maintain the information collected in order to determine the eligibility of the individuals filing applications for the part D subsidy.  SSA will share subsidy eligible information with the Centers for Medicare and Medicaid Services (CMS). 

The initial selection of individuals will be from the population of current Medicare beneficiaries.  Subsequent selection will be individuals who attain age 65 after initial selection and are eligible for Medicare.  These individuals will be eligible by virtue of age or disability.  This population also includes disabled individuals who file and receive expedited entitlement to Medicare due to Lou Gehrig’s disease (ALS) or End Stage Renal Disease (ESRD).

Medicare Part B System

Section 1839 of the Social Security Act (as amended by section 811 of the MMA) creates an income-related reduction in Part B premium subsidies effective January 2007.  Currently, the premium paid by a Part B beneficiary covers approximately 25% of the per-capita cost of Part B; the balance is subsidized by the Federal government.  Section 1839(i) provides that individuals with modified adjusted gross income (MAGI) in excess of a threshold amount shall receive a lower premium subsidy.  This has the effect of raising the Medicare Part B premium for such individuals by requiring that they pay an income-related monthly adjustment amount (IRMAA) in addition to the standard premium and any penalties for late enrollment or re-enrollment.  Section 811 of the MMA also modified the Internal Revenue Code to authorize the Internal Revenue Service (IRS) to disclose information to SSA regarding a person's MAGI.

The statute requires the Commissioner of Social Security to use MAGI data from two years prior to the year for which we are determining a beneficiary's premium amount when that data is available.  A temporary exception is provided for instances where IRS does not have two-year-old data in electronic format.  In such cases, SSA is directed to use three-year-old tax data.  Further, the statute requires SSA to develop procedures whereby individuals who have experienced certain life-changing events (such as marriage, divorce, or death of a spouse) may request SSA to use more recent tax data to determine their income-related monthly adjustment amount.

In order to make such determinations required by the legislation, SSA has initiated a new information systems project, i.e., Part B Income-related Monthly Adjustment Amount System to apply Part B premium IRMAA as appropriate.  The information collected to effectuate this premium offset will come from Agency records and IRS. 

·         Describe the administrative and technological controls that are in place or that are planned to secure the information being collected.

Only authorized SSA personnel who have a need for the information in the performance of their official duties will be permitted access to the information.  We will safeguard the security of the information by requiring the use of access codes to enter the computer systems that will maintain the data and will store computerized records in secured areas that are accessible only to employees who require the information to perform their official duties.  Any manually maintained records will be kept in locked cabinets or in otherwise secure areas.  Furthermore, SSA employees having access to SSA databases maintaining personal information must sign a sanction document annually, acknowledging their accountability for making unauthorized access to or disclosure of such information.

·         Describe the impact on individuals’ privacy rights.

Are individuals afforded an opportunity to decline to provide information?

We collect information only where we have specific legal authority to do so and this information is collected primarily to administer our responsibilities under the Social Security Act.  When we collect information from individuals, we advise them of our legal authority for requesting the information and explain the effect(s) on them if they choose not to provide the information.  The individual can then make an informed decision as to whether to provide the information or not.

The new Medicare Part D System will maintain only that information that is necessary for the efficient and effective control and processing of Medicare Part D subsidy applications from the initial application through the appeals process.  The proposed new Medicare Part B System will maintain only information that is necessary for the efficient, timely and accurate imposition of Medicare Part B premium IRMAA.  Security measures will be employed that protect access to and preclude unauthorized disclosure of records in the proposed system.

Are individuals afforded an opportunity to consent to only particular uses of the information?

When we collect information from individuals, we advise them of the purposes for which we will use the information.  We further advise them that we will disclose this information without their prior written consent only when we have specific authority in Federal statute (e.g., the Privacy Act) to do so.

·         Does the collection of this information require a new system of records under the Privacy Act (5 U.S.C. § 552a) or an alteration to an existing system of records?

A new system of records was established on December 28, 2004 (69 F.R. 77816), entitled Medicare Part D and Part D Subsidy File (60-0321) and routine uses applicable to the system of records.  We will alter that system to include information applicable to the new Medicare Part B System.



Privacy Officer Jonathan Cantor Signature                 

______________________________                        __02/17/06__

SIGNATURE                                                             DATE



_/S/ Thomas W. Crawley__________                        ___02/17/06 _

SIGNATURE                                                                    DATE