[Federal Register: January 11, 2001 (Volume 66, Number 8)]
[Rules and Regulations]
[Page 2195-2206]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja01-1]
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[[Page 2195]]
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 215, 225, 226, and 245
RIN 0584-AC95
Special Milk Program for Children, Summer Food Service Program,
Child and Adult Care Food Program and Determining Eligibility for Free
and Reduced Price Meals and Free Milk in Schools: Disclosure of
Children's Eligibility Information to State Medicaid and the State
Children's Health Insurance Program
AGENCY: Food and Nutrition Service, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This interim rule amends the regulations for the Special Milk
Program for Children, Summer Food Service Program, Child and Adult Care
Food Program, and Determining Eligibility for Free and Reduced Price
Meals and Milk in Schools. The rule establishes requirements for the
disclosure of children's free and reduced price meal or free milk
eligibility information to State Medicaid (Medicaid) and the State
Children's Health Insurance Program (SCHIP) by State and local agencies
responsible for free and reduced price meal or free milk eligibility
determinations. These regulations affect State agencies and program
operators that administer the Child Nutrition Programs (National School
Lunch Program, Special Milk Program for Children, School Breakfast
Program, Child and Adult Care Food Program, and the Summer Food Service
Program) and who elect to disclose children's free and reduced price
meal or free milk eligibility information to Medicaid and SCHIP. The
provisions also affect households determined eligible for free and
reduced price meals or free milk. The rule reflects the waiver of
confidentiality provisions of the Agricultural Risk Protection Act of
2000 and is intended to facilitate enrollment of eligible children in
Medicaid and SCHIP.
DATES: Effective Date: October 1, 2000. Comment Date: To be assured of
consideration, comments must be postmarked on or before April 11, 2001.
ADDRESSES: Address all comments concerning this interim rule to Robert
M. Eadie, Chief, Policy and Program Development Branch, Child Nutrition
Division, Food and Nutrition Service, USDA, 3101 Park Center Drive,
Alexandria, VA 22302. You also may submit comments electronically at
cndinterim@fns.usda.gov. All written submissions received will be
available for public inspection in Room 1007 at the address listed
above, during regular business hours (8:30 a.m. to 5:00 p.m.) Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: Barbara Semper or Mary Jane Whitney at
the above address or by telephone at 703-305-2590. A regulatory cost-
benefit analysis was completed for this rule. Single copies may be
requested from the FNS officials identified above.
SUPPLEMENTARY INFORMATION:
Background
What Is the Purpose of This Rule?
This interim rule implements a provision of the Agricultural Risk
Protection Act of 2000, Public Law (P.L.) 106-224, enacted June 20,
2000. P.L. 106-224 amended section 9(b)(2)(C) of the Richard B. Russell
National School Lunch Act (NSLA) (42 U.S.C. 1758(b)(2)(C)) to add
Medicaid under title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.) and SCHIP under title XXI of that Act (42 U.S.C. 1397aa et seq.)
to the programs that are authorized limited access to children's free
and reduced price meal or free milk eligibility information provided:
(1) The State agency and school food authority elect to disclose
children's free and reduced price meal or free milk eligibility
information to these health insurance programs;
(2) There is a written agreement between the school and the health
insurance program agency that requires the health insurance program
agency to use the information to seek to enroll children in Medicaid
and SCHIP; and
(3) Parents/guardians are notified and given an opportunity to
elect not to have their children's eligibility information disclosed to
Medicaid or SCHIP.
Does the NSLA Allow Disclosure of Children's Eligibility Information to
Other Programs?
On July 25, 2000, the Food and Nutrition Service (FNS) published a
proposed rule on the disclosure of children's (and adult participants'
in the Child and Adult Care Food Program) free and reduced price meal
or free milk eligibility information (65 FR 45725) to implement
provisions of Pub. L. 103-448, the Healthy Meals for Healthy Americans
Act of 1994. Pub. L. 103-448 amended the NSLA to allow limited
disclosure of children's eligibility information to certain programs
and individuals. The comment period for the proposed rule closes on
November 22, 2000. In accordance with the statute, the proposed rule
would authorize disclosure, without parental/guardian consent, to
persons directly connected with the administration or enforcement of:
(1) The NSLA or the Child Nutrition Act of 1966 (CNA) (42 U.S.C.
Sec. 1771 et seq.) or a regulation issued under either of those Acts;
(2) A Federal education program;
(3) A State health or education program (other than Medicaid)
administered by the State or local education agency;
(4) A Federal, State or local means-tested nutrition program with
eligibility standards comparable to the National School Lunch Program
(NSLP);
(5) The Comptroller General of the United States for audit and
examination; and
(6) Certain law enforcement officials for investigating alleged
program violations.
Pub. L. 103-448 specifically excluded disclosure of children's
eligibility information, without consent, to a program under title XIX
of the Social Security Act, i.e., Medicaid (42 U.S.C. 1396 et. seq.).
Pub. L. 103-448 did not address disclosure of children's eligibility
information to SCHIP, which was established in later Federal
legislation. The Agricultural Risk Protection Act of 2000, Pub. L. 106-
224, subsequently amended the NSLA to provide disclosure of children's
eligibility information to Medicaid and
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SCHIP. This interim rule promulgates the regulations for Pub. L. 106-
224.
FNS previously issued guidance that allows disclosure of
eligibility information consistent with P.L. 103-448. Under that
guidance, disclosure to Medicaid and SCHIP is allowed with parental/
guardian consent. Please refer to the proposed rule published on July
25, 2000 at 65 FR 45725 for a discussion of the disclosure provisions
under P.L. 103-448.
Why Is This Rule Being Issued as an Interim Rule and Not a Proposed
Rule?
Section 242(c) of Pub. L. 106-224 makes the provisions of that law
addressed in this rulemaking effective October 1, 2000 and section 263
requires that FNS promulgate regulations to implement the provisions as
soon as practicable after the date of enactment without regard to the
Administrative Procedure Act's notice and comment provisions at 5
U.S.C. Sec. 553; the Statement of Policy of the Secretary of
Agriculture effective July 24, 1971 (36 FR 13804) relating to notices
of proposed rulemaking and public participation in rulemaking; and the
Paperwork Reduction Act at 44 U.S.C. chapter 35. In addition, section
172 of Pub. L. 106-224 requires us to promulgate rules to carry out the
Act and its amendments not later than 120 days after the date of
enactment. For these reasons, we are not taking public comment prior to
promulgation of this interim rule.
To benefit from the experiences of program operators and because
the disclosure of eligibility information is a sensitive issue, FNS
decided to issue this rule as an interim, rather than a final rule, in
order to facilitate public comment. FNS intends to issue a final rule
combining the proposed disclosure provisions implementing Pub. L. 103-
448 and these interim disclosure provisions implementing Pub. L. 106-
224 after consideration of the comments received on these rules.
What Programs Are Being Affected?
As with the amendment to the NSLA made by Pub. L. 103-448, the new
provisions pertaining to disclosure of children's eligibility
information to Medicaid and SCHIP appear in the part of the NSLA that
applies to the free and reduced price meal application process for the
NSLP. However, based on FNS practices and policies dealing with past
issues and the need for consistency among the Child Nutrition Programs,
these regulations on the disclosure of free and reduced price meal or
free milk eligibility information by determining agencies to Medicaid
and SCHIP apply to all the Child Nutrition Programs--the NSLP, School
Breakfast Program (SBP), Special Milk Program for Children (SMP), Child
and Adult Care Food Program (CACFP), and camps and enrolled sites in
the Summer Food Service Program (SFSP). Therefore, this rule amends the
regulations for each of these programs. The various sections amended
are listed following the discussion of each issue addressed by this
rule. The minor wording differences necessary to accommodate the
terminology for the specific programs are not addressed in the
preamble. School food authorities, SMP child-care institutions, CACFP
institutions, and SFSP sponsors are determining agencies and are
collectively referred to as ``program operators'' in the preamble.
Additionally, this approach is consistent with the July 25, 2000,
proposed rule.
What Definitions Will Be Added to the Regulations?
Disclosure. Any time information is revealed or used for a purpose
other than for the purpose for which the information was obtained, it
is a disclosure. This is true even when the same agency that obtained
the information is the one wishing to use it for another purpose. The
term ``disclosure,'' refers to access, release, or transfer of personal
data about participants by means of print, tape, microfilm, microfiche,
electronic communication or any other means. In this rule, the data
would be individual children's free and reduced price eligibility
status or other information obtained through the free and reduced price
meal or free milk application or through direct certification.
Medicaid and SCHIP. Medicaid and SCHIP refers to the Federal and
State funded health insurance programs under titles XIX and XXI of the
Social Security Act, which provide free and low cost health insurance
to needy children.
This interim rule will include the above definitions in the
alphabetical listings at 7 CFR 215.2, 225.2, 226.2, and 245.2.
Is Disclosure of Individual Children's Eligibility Information to
Medicaid or SCHIP Required?
Section 9(b)(2)(C)(ii)(IV) of the NSLA, as amended by Pub. L. 106-
224, specifies that individual children's eligibility information may
be disclosed to Medicaid and SCHIP only if the State agency and program
operators ``elect'' to do so. Both the State agency and program
operator must agree to the disclosure. Since the disclosure provision
applies to all the Child Nutrition Programs, in most cases, this would
be the State agency and the school food authority or school, SFSP
sponsor, or CACFP institution. This provision is included in
Secs. 215.13a(g)(1), 225.15(g)(1), 226.23(i)(1), 245.6(f)(1) of this
interim rule. Additionally, as discussed later in this preamble,
parents/guardians must be given the opportunity to elect not to have
their information disclosed.
What Information May Be Disclosed for Use by Medicaid and SCHIP?
When both the State agency and program operators elect to disclose
eligibility information for use by Medicaid/SCHIP and parents/guardians
have not declined the disclosure, program operators may disclose
children's eligibility information. In accordance with section
9(b)(2)(C)(iii)(IV) of the NSLA, program operators may disclose
children's names, eligibility status (whether they are eligible for
free or reduced price meals or free milk), and any other eligibility
information obtained from the application for free and reduced price
meals or free milk or through direct certification to persons directly
connected with the administration of Medicaid or SCHIP. (Please note
that for the Child and Adult Care Food Program and the Summer Food
Service Program, children's eligibility information may only be
disclosed to the extent that there are free and reduced price meal
applications for these children.) This provision is included in
Secs. 215.13a(g)(2), 225.15(g)(2), 226.23(i)(2), and 245.6(f)(2).
Who Is a Person ``directly connected'' With the Administration of
Medicaid or SCHIP?
The NSLA permits disclosure and use of program eligibility
information specifically to ``a person directly connected with the
administration'' of Medicaid or SCHIP for the purpose of identifying
and seeking to enroll children in Medicaid or 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 Medicaid or SCHIP applications or to make
eligibility determinations for Medicaid or SCHIP. Initial processing of
Medicaid or SCHIP applications includes assisting individuals to fill
out the application, explaining requirements and similar
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activities. In addition to being authorized under Federal and State
Medicaid requirements, persons directly connected with Medicaid or
SCHIP administration must be designated by the Medicaid or SCHIP agency
to receive Medicaid or SCHIP eligibility information. This may include
employees of county health departments, county departments of human or
social services, family service agencies or income maintenance
agencies. This also may include persons under contract to the State
health program to make eligibility determinations and enroll children
in the State health insurance program. These entities and persons must
have a formal relationship with the Medicaid or SCHIP agency to be
directly connected with Medicaid or SCHIP administration.
The statute allows disclosure of children's eligibility information
to identify children who may be eligible for one of these health
insurance programs and to seek to enroll eligible children in the
applicable program. The statute does not authorize disclosure to
persons connected with Medicaid or SCHIP enforcement activities. Thus,
Federal, State and local reviewers responsible for reviewing or
auditing compliance with State Medicaid or SCHIP regulations may not
have access to children's free and reduced price meal or free milk
eligibility information under this rule.
In general, organizations and individuals assisting in Medicaid and
SCHIP outreach activities are not authorized access to children's free
and reduced price eligibility information. The intent is to limit
disclosure of program eligibility information to those who have a
``need to know'' program eligibility information for identifying and
seeking to enroll eligible children in Medicaid and SCHIP. Since States
have flexibility in implementing Medicaid and SCHIP, FNS recommends
that State agencies and determining agencies contact the Medicaid/SCHIP
coordinator in their State to determine the persons or entities
authorized and designated by Medicaid or SCHIP to receive eligibility
information. A description of ``a person directly connected'' with
State Medicaid or SCHIP administration is included in
Secs. 215.13a(g)(3), 225.15(g)(3), 226.23(i)(3), and 245.6(f)(3) of
this rule.
What If Student Records and Other Systems Are Computerized?
FNS is concerned about maintaining the confidentiality of
children's eligibility information that is maintained in a computerized
data base. Procedures must be in place to ensure that only authorized
individuals have access to children's eligibility information.
Many schools are now computerized, and individual student
information is often part of a Statewide electronic database under the
responsibility of the State's Department of Education. The information
may also be part of a local school district database. Typically, these
databases contain ``directory information,'' such as student's name,
address, phone number, and ``education records,'' such as achievement
test scores, grades, special education plans, and evaluations. The
Department of Education has regulations restricting access to
``education records,'' including those on computerized systems. These
regulations are found at 34 CFR Part 99.
Program operators should take note that ``education records'' do
not include Child Nutrition Program eligibility information. Therefore,
the Department of Education regulations do not extend to program
eligibility information for the Child Nutrition Programs. Nor is
compliance with the Department of Education confidentiality regulations
sufficient to meet the confidentiality protections in the NSLA.
Therefore, program operators, who may also be database managers, must
ensure that to the extent that Child Nutrition Program eligibility
information is kept together with other school records, controls are
established and maintained to ensure that the program eligibility
information is available only to authorized persons and used only for
authorized purposes.
FNS is not proposing any specific methods to ensure compliance with
the NSLA confidentiality provisions in these situations. However, FNS
remains concerned about the extent of access to the databases, and ways
to protect program eligibility information from disclosure and use
beyond what is authorized by Congress. Since FNS experience in this
area is limited, commenters are encouraged to provide their experiences
with student databases in which access restrictions vary according to
the sensitivity of the different data items in the database. An example
would be a school district database where access to students' academic
records is more restricted than is access to students' class schedules,
addresses, and other common information. Comments on this subject will
aid FNS in determining whether special controls are necessary in
situations in which program eligibility information reside in the same
database where other student information is maintained. While this rule
would not forbid such arrangement, FNS wishes to emphasize that to
comply with this rule, database managers, who may also be program
operators, must restrict access to program eligibility information to
only those individuals and uses authorized by statute and regulation.
Are There Restrictions on How Children's Free and Reduced Price
Eligibility Information May Be Used by State Medicaid and SCHIP?
Section 9(b)(2)(C)(iii)(IV) of the NSLA specifies that 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 identify children that may
be eligible for State Medicaid or SCHIP and to seek to enroll them in
those programs. State agencies and program operators must include this
restriction in the agreement with Medicaid or SCHIP officials discussed
later in this preamble. This provision is added to
Sec. Sec. 215.13a(g)(4), 225.15(g)(4), 226.23(i)(4), and 245.6(f)(4).
The statute and this regulation specify that children's eligibility
information, when disclosed to Medicaid or SCHIP, must be used to
identify and ``seek to enroll'' children in one of these health
insurance programs. In actuality, it is unlikely that children will be
automatically enrolled in Medicaid or SCHIP based on information from
the free or reduced price application or obtained through direct
certification, because Medicaid and SCHIP need additional information
to enroll children. Rather, children's free and reduced price meal or
free milk eligibility information will be used to facilitate Medicaid
and SCHIP enrollment. There is concern that households may believe that
by allowing their information to be disclosed to Medicaid and SCHIP,
their children will be automatically enrolled in one of these health
insurance programs without the household taking further action.
Medicaid and SCHIP officials and program operators should work together
to ensure that once households are identified as potentially eligible
for Medicaid or SCHIP, households are aware that they must complete the
Medicaid or SCHIP application process.
Must Households Be Notified of Potential Disclosures to Medicaid and
SCHIP?
In accordance with section 9(b)(2)(C)(vi)(II)(aa) and (bb) of the
NSLA, 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
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information disclosed. The notification must inform the parents/
guardians that: (1) They are not required to consent to the disclosure;
(2) the information, if disclosed, will be used to facilitate the
identification and enrollment of eligible children in a health
insurance program; and (3) 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 but concurrent
notice provided to parents/guardians. The notice must be given prior to
the disclosure and parents/guardians must be given a reasonable time
limit to respond. (A discussion about notifying households of potential
disclosures of eligibility information for children who are determined
eligible for free meals through direct certification is included
below.) Only the parent or guardian who is a member of the household or
family for purposes of the free and reduced price meal or free milk
application, i.e., the parent/guardian included on the application,
must be notified and given the option to decline the disclosure of
eligibility information. In most cases of divorce or separation, this
means the custodial parent or guardian. However, if custody is shared,
the parents or guardians must decide who has primary custody for
purposes of making application for the program. The parent or guardian
having such custody would be the only person who must be notified and
given the option to elect to decline the disclosure. In other words, by
not declining to have their information disclosed to Medicaid/SCHIP,
the parent/guardian is consenting to have their eligibility information
shared. FNS is concerned about the personal financial data at stake.
This information is unlike other student records that directly concern
the education of the child, and in which both parents have a direct
interest. The program eligibility information in these circumstances is
associated with one parent or guardian, and FNS believes that only that
parent or guardian should be given the option of electing whether or
not to disclose their eligibility information. FNS recognizes that this
is a difficult issue and is particularly interested in comments on this
point.
Regardless of the document used to notify parents/guardians and to
secure the consent/declination, officials must provide the household
with adequate information for them to determine whether or not to allow
the disclosure of their eligibility information. This rule would amend
Secs. 215.13a(g)(5), 225.15(g)(5), 226.23(i)(5), and 245.6(f)(5) to set
the minimum standards for the notice of potential disclosure.
How Are Households Who Are Determined Eligible for Free Meals Through
Direct Certification Notified About the Potential Disclosure of
Eligibility Information?
Section 9(b)(2)(C)(iii) of the NSLA authorizes the disclosure of
participants' free and reduced price information obtained from a free
and reduced price meal application or obtained through direct
certification. As specified in Sec. 245.6(b), direct certification is
the process by which program operators determine program eligibility by
directly communicating with the appropriate State or local agency to
obtain documentation that an individual is a member of a food stamp
household (or member of a household receiving benefits under the Food
Distribution Program on Indian Reservations (FDPIR) in lieu of food
stamps) or a member of a family receiving assistance under certain
State programs for the Temporary Assistance for Needy Families (TANF).
In the case of direct certification, the agency administering the Food
Stamp Program, FDPIR or TANF, as appropriate, may add a notification/
declination statement to the notice of eligibility for free meals or
milk under the Child Nutrition Programs that is provided to the
household as documentation of eligibility for free meals. The household
would be asked to contact the program operator if they did not want
their information disclosed to Medicaid or SCHIP. Another option is for
the program operator to include the notification/declination statement
on the notice of eligibility for free meals that the program operator
provides to the households when the direct certification is
accomplished by computer match. Regardless of the method chosen to
notify households of the potential disclosure and to obtain their
consent/declination, officials must provide households with adequate
information to determine whether to disclose their information and
adequate time for the household to respond.
May Social Security Numbers Be Disclosed?
The Privacy Act of 1974 (5 U.S.C. 552a note) requires that notice
be given of the intended uses of social security numbers. Thus, if a
State agency or program operator intends to disclose social security
numbers, either through the disclosure provisions authorized in the
NSLA or with specific parental consent, then section 7(b) of the
Privacy Act of 1974 (5 U.S.C. 552a note) requires that notice of the
planned uses of the social security number be given.
The easiest method is to include the planned uses of social
security numbers in the Privacy Act notice currently required by
Secs. 225.15(f)(4)(iv), 226.23(e)(1)(ii)(F), and 245.6(a)(1), because a
Privacy Act notice is already on the free and reduced price meal
application. The only uses of social security numbers currently listed
in the regulations and the prototype application are for the
determination and verification of eligibility for program meals. Any
State agency or program operator that plans to disclose all eligibility
information, including the social security number, to Medicaid or SCHIP
administrators or plans to use the number for purposes not specified in
their Privacy Act notice must amend the Privacy Act notice to reflect
this. State agencies and program operators are responsible for ensuring
the adequacy of their Privacy Act notice, and FNS encourages them to
consult with their legal counsel. The requirement regarding Privacy Act
compliance is specified in Secs. 215.13a(g)(6), 225.15(g)(6),
226.23(i)(6), and 245.6(f)(6) of this interim rule.
Currently, the regulations for the SMP do not include a Privacy Act
notice. The addition of a Privacy Act notice to the SMP was proposed in
the July 25, 2000 rule (65 FR 45725). To ensure Privacy Act compliance
in that program, this rule adds a Privacy Act notice requirement for
the SMP in child-care institutions. The Privacy Act notice requirement
for the SMP in child-care institutions is added at Sec. 215.13a(f).
This rule amends and simplifies current Privacy Act notice required
in Secs. 226.23(e) and 245.6(a). The revision to the Privacy Act notice
on the free and reduced price application replaces the three sentences
giving detailed descriptions of the potential use of the social
security number for verification with a more general, simpler statement
that the social security number will be used in the administration and
enforcement of the program. This revision is intended to respond to
concerns about the lengthy Privacy Act notice previously required by
program regulations. This revision shortens the notice and reduces the
amount of space it takes up on the application. An additional Privacy
Act notice is required to be given before verification (for those
programs subject to verification). That notice would continue to
provide the more detailed description on the potential uses of social
security numbers in verification. The sections
[[Page 2199]]
revised are Secs. 225.15(f)(4)(iv), 226.23(e)(1)(ii)(F), and
245.6(a)(1). This revision was proposed in the July 25, 2000 rule (65
FR 45725).
Must There Be an Agreement With State Medicaid and/or SCHIP?
Section 9(b)(2)(C)(vi)(I) of the NSLA specifies that the
determining agency must have a written agreement with the State or
local agency or agencies administering 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: (1) Identify
the health insurance program or health agency receiving children's
eligibility information; (2) describe the information that will be
disclosed; (3) require the insurance program or health agency to use
the eligibility information obtained; (4) specify that the information
must only be used to identify children eligible for and to seek to
enroll children in Medicaid or SCHIP; (5) describe how the information
will be protected from unauthorized uses and disclosures; (6) describe
the penalties for unauthorized disclosure; and (7) be signed by both
the determining agency and the Medicaid/SCHIP program or agency
receiving children's eligibility information. This provision is
included in Secs. 215.13a(g)(7), 225.15(g)(7), 226.23(i)(7), and
245.6(f)(7).
What Are the 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, i.e., third party disclosures are prohibited.
These penalties are described in Secs. 215.13a(g)(8), 225.15(g)(8),
226.23(i)(8), and 245.6(f)(8) of this interim rule.
What Are the State Agency's Responsibilities?
A State agency that elects to disclose children's free and reduced
price meal or free milk information, with the agreement of the
determining agency, must ensure that the determining agency: (1) Has a
written agreement with the State or local agency or agencies
administering health insurance programs for children under title XIX
and XXI of the Social Security Act (42 U.S.C. 1396 et seq. and 1397aa
et seq.) that requires the health agencies to use children's free and
reduced price meal or free milk eligibility information to seek to
enroll children in those health insurance programs; and (2) notifies
each household of the information that will be disclosed, that the
information disclosed will be used only to seek to enroll children in
Medicaid or the State Children's Health Insurance Program and provides
each parent/guardian with an opportunity to elect not to have the
information disclosed. Sections 215.13a(g)(9), 225.15(g)(9),
226.23(i)(9), and 245.6(f)(9) specify the State agency's
responsibilities regarding disclosures.
Summary
FNS is amending the Child Nutrition Program regulations to permit
the disclosure of program eligibility information to Medicaid and SCHIP
consistent with the recent amendments to the NSLA made by P.L. 106-224.
FNS' goal is to facilitate the enrollment of eligible children in those
health insurance programs, without sacrificing the confidentiality of
children's eligibility information.
Public Participation
Section 242(c) of Pub. L. 106-224 (7 U.S.C. 1421 note) makes the
provisions of this rule effective on October 1, 2000. Further, section
263 of Pub. L. 106-224 directs the Department to implement these
provisions without regard to the Administrative Procedure Act's notice
and public comment provisions at 5 U.S.C. Sec. 553. The Department is
thus promulgating the provisions of this interim rule without prior
notice or public comment. As a result, as of October 1, program
administrators will be given the opportunity to disclose participant's
program eligibility information to Medicaid and SCHIP to facilitate
enrollment in those programs. The Department, however, is providing
interested parties an opportunity to comment on the interim regulatory
provisions during the public comment period and will consider comments
submitted when finalizing this rule.
Executive Order 12866
This rule has been determined to be significant and was reviewed by
the Office of Management and Budget under Executive Order 12866.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes a requirement for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, the
FNS generally prepares a written statement, including a cost-benefit
analysis. This is done for proposed and final rules that have ``Federal
mandates'' which may result in expenditures of $100 million or more in
any one year by State, local, or tribal governments, in the aggregate,
or by the private sector. When this statement is needed for a rule,
section 205 of the UMRA generally requires the FNS to identify and
consider a reasonable number of regulatory alternatives. It must then
adopt the least costly, most cost-effective or least burdensome
alternative that achieves the objectives of the rule.
This interim rule contains no Federal mandates of $100 million or
more in any one year (under regulatory provisions of Title II of the
UMRA) for State, local, and tribal governments or the private sector.
Thus, this interim rule is not subject to the requirements of sections
202 and 205 of the UMRA.
Regulatory Flexibility Act
This interim rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act (5 U.S.C. 601-612). Shirley R.
Watkins, Under Secretary for Food, Nutrition and Consumer Services, has
certified that this rule will not have a significant economic impact on
a substantial number of small entities. By permitting access to certain
eligibility information, this rule could reduce duplicative paperwork
by certain agencies which serve low-income children and adults. The
rule could streamline operations of those programs. The provisions of
this rule also may enhance access to these programs by needy children.
The Department of Agriculture does not anticipate any adverse fiscal
impact resulting from implementation of this rulemaking. Although there
may be some burdens associated with this rule, the burdens would not be
significant and would be outweighed by the benefits of sharing of
information.
Executive Order 12372
The Special Milk Program, the Summer Food Service Program, and the
Child and Adult Care Food Program are listed in the Catalog of Federal
Domestic Assistance under Nos. 10.556, 10.559, and 10.558 respectively.
These programs are subject to the provisions of Executive Order 12372,
which requires intergovernmental consultation with State and local
officials (7 CFR Part
[[Page 2200]]
3015, Subpart V, and final rule related notice at 48 FR 29115, June 24,
1983).
Executive Order 12988
This interim rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is intended to have preemptive effect with
respect to any State or local laws, regulations or policies which
conflict with its provisions or which would impede its full
implementation. This rule is not intended to have retroactive effect
unless that is specified in the Effective Date section of the preamble
of the final rule. Before any judicial challenge to the provisions of
this rule or the application of its provisions, all administrative
procedures that apply must be followed. The only administrative appeal
procedures relevant to this proposed rule are the hearings that FNS
must provide for decisions relating to eligibility for free and reduced
price meals and free milk (Sec. 245.7 for the NSLP, SBP, and SMP in
schools; Sec. 226.23(e)(5) for the CACFP).
Paperwork Reduction Act
In accordance with the authority provided under section 263 of Pub.
L. 106-224, this rulemaking is made without regard to the Paperwork
Reduction Act of 1995 (44 U.S.C. Chapter 35).
This rule contains burdens that were included in the burden
estimate in the proposed rule, Disclosure of Children's Eligibility
Information, published on July 25, 2000, at 65 FR 45725. That rule
proposed to allow the disclosure of children's eligibility information
to various education, nutrition, and health programs authorized under
Pub. L. 103-448. Additionally, under the proposed rule, officials may
disclose children's eligibility to other programs, such as Medicaid and
SCHIP, with parental consent.
Since many of the provisions in the proposed rule, mentioned above,
and this interim rule are similar, such as taking agreements with
persons or agencies receiving children's eligibility information and
notifying households of potential disclosures, the Department plans to
issue one final rule that responds to commenter concerns on the
proposed rule and this interim rule. The Department will make any
adjustments to the burden estimate in that final rule.
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have ``federalism implications,'' agencies are
directed to provide a statement for inclusion in the preamble to the
regulation describing the agency's considerations in terms of the three
categories called for under section (6)(a)(B) of Executive Order 13132:
Prior Consultation With State Officials
Prior to drafting this interim rule, we received input from State
and local agencies at various times. Since the Child Nutrition Programs
(CNP) are State administered, federally funded programs, our regional
offices have informal and formal discussions with State and local
officials on an ongoing basis regarding program implementation and
performance. This arrangement allows State and local agencies to
provide feedback that forms the basis for any discretionary decisions
in this and other CNP rules. The provisions in this rule are primarily
non-discretionary. Pub. L. 106-224 mandates that we promptly promulgate
regulations without regard to the notice and comment provisions of 5
U.S.C. 553. However, because the disclosure of children's eligibility
information is a sensitive issue, we are issuing this rule as an
interim rule with a request for public comment.
Nature of Concerns and the Need To Issue This Rule
State and local agencies are generally concerned about protecting
the confidentiality of children's eligibility information. They are
also concerned about the paperwork and financial burdens placed on food
service to provide eligibility information to Medicaid and SCHIP
officials.
The issuance of a regulation is required by Pub. L. 106-224. Prior
to Pub. L. 106-224, program officials were permitted to disclose
children's eligibility information to certain programs and individuals
without parental consent. Medicaid and SCHIP were not included.
Therefore, program officials had to obtain the consent of parents/
guardians if they elected to disclose children's eligibility
information with Medicaid and SCHIP. A proposed rule to allow the
disclosure of eligibility information to these other programs was
published on July 25, 2000 (64 FR 45725). In accordance with Pub. L.
106-224, this interim rule will allow the disclosure of children's
eligibility information unless parents/guardian elect not to have their
information disclosed to Medicaid and SCHIP. Certain other provisions,
as specified in the statute, must also be met prior to disclosing
information to Medicaid and SCHIP.
Extent to Which We Meet These Concerns
We believe that we adequately address the issue of State and local
flexibility. We clarify that the disclosure of children's eligibility
information to Medicaid is a State and local decision. They are not
required to disclose children's eligibility information. However, we
encourage State and local agencies to work with Medicaid and SCHIP
officials to make the exchange of eligibility information as
streamlined as possible. Additionally, FNS has issued prototype
materials, such as a prototype agreement between program operators and
an agency receiving eligibility information and a prototype
notification to parents/guardians that their eligibility information
may be disclosed unless the program operator is notified that they do
not want their information disclosed. Additionally, the Department of
Health and Human Services, the department that administers Medicaid and
SCHIP, is preparing an administrative guidance on reimbursement for
costs associated with Medicaid and SCHIP outreach and enrollment.
Finally, we will consider all comments received on this rule when we
draft the final rule.
List of Subjects
7 CFR Part 215
Food assistance programs, Grant programs-education, Grant programs-
health, Infants and children, Milk, Reporting and recordkeeping
requirements.
7 CFR Part 225
Food assistance programs, Grant programs-health, Infants and
children, Labeling, Reporting and recordkeeping requirements.
7 CFR Part 226
Accounting, Aged, Day care, Food assistance programs, Grant
programs, Grant programs-health, Indians, Individuals with
disabilities, Infants and children, Intergovernmental relations, Loan
programs, Reporting and recordkeeping requirements, Surplus
agricultural commodities.
7 CFR Part 245
Civil rights, Food assistance programs, Grant programs-education,
Grant programs-health, Infants and children, Milk, Reporting and
recordkeeping requirements, School breakfast and lunch programs.
Accordingly, 7 CFR Parts 215, 225, 226, and 245 are amended as
follows:
[[Page 2201]]
PART 215--SPECIAL MILK PROGRAM FOR CHILDREN
1. Revise the authority citation for Part 215 to read as follows:
Authority: 42 U.S.C. 1772 and 1779.
2. In Sec. 215.2:
a. Add a new paragraph (i-l) Disclosure;
b. Add a new paragraph (k-l) Medicaid; and
c. Redesignate paragraph (aa) Summer Food Service Program as
paragraph (bb) Summer Food Service Program and add a new paragraph (aa)
State Children's Health Insurance Program in its place.
The additions read as follows:
Sec. 215.2 Definitions.
* * * * *
(i-1) Disclosure means individual children's program eligibility
information obtained through the free milk eligibility process that is
revealed or used for a purpose other than for the purpose for which the
information was obtained. The term refers to access, release, or
transfer of personal data about children by means of print, tape,
microfilm, microfiche, electronic communication or any other means.
* * * * *
(k-1) Medicaid means the State medical assistance program under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
* * * * *
(aa) State Children's Health Insurance Program (SCHIP) means the
State medical assistance program under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.).
* * * * *
3. In Sec. 215.13a, add new paragraphs (f) and (g) to read as
follows:
Sec. 215.13a Determining eligibility for free milk in child-care
institutions.
* * * * *
(f) Is a Privacy Act notice required on the free milk application?
Each free milk application must include substantially the following
statement: ``Unless you include your child's case number for the Food
Stamp Program, the Food Distribution Program on Indian Reservations (or
other identifier for the Food Distribution Program on Indian
Reservations) or the Temporary Assistance for Needy Families Program,
you must include the social security number of the adult household
member signing the application or indicate that the household member
does not have a social security number. This is required by section 9
of the National School Lunch Act. The social security number is not
mandatory, but the application cannot be approved if a social security
number is not given or an indication is not made that the signer does
not have a social security number. The social security number will be
used in the administration and enforcement of the program.''
(g) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free milk
may be disclosed to Medicaid and SCHIP as described in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow child
care institutions to disclose children's free milk eligibility
information to Medicaid and SCHIP. Child care institutions may then
elect to do so. Children's program eligibility information may only be
disclosed to Medicaid or SCHIP when both the State agency and the child
care institution so elect, the parent/guardian does not decline to have
their eligibility information disclosed as described in paragraph
(g)(5), and the requirements in this paragraph (g) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or child care institution, as appropriate, may
disclose children's names, eligibility status (whether they are
eligible for free milk), and any other eligibility information obtained
through the free milk application or obtained through direct
certification to persons directly connected with the administration of
Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration
of Medicaid and SCHIP for purposes of disclosure of children's free
milk eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free milk eligibility information? Medicaid and SCHIP
agencies and health insurance program operators receiving children's
free milk eligibility information may only use the information to seek
to enroll children in Medicaid or SCHIP. The Medicaid and SCHIP
enrollment process may include targeting and identifying children from
low-income households who are potentially eligible for Medicaid or
SCHIP for the purpose of seeking to enroll them in Medicaid or SCHIP.
(5) Must we notify households of potential disclosure to Medicaid
or SCHIP? The State agency or child care institution, as appropriate,
must notify parents/guardians that their children's free milk
eligibility information will be disclosed to Medicaid and/or SCHIP
unless the parent/guardian elects not to have their information
disclosed. Additionally, the State agency or sponsor, as appropriate,
must give parents/guardians an opportunity to elect not to have their
information disclosed to Medicaid or SCHIP. Only the parent or guardian
who is a member of the household or family for purposes of the free and
reduced price meal or free milk application may decline the disclosure
of eligibility information. The notification must inform parents/
guardians that they are not required to consent to the disclosure, that
the information, if disclosed, will be used to identify children
eligible for and to seek to enroll children in a health insurance
program, and that their decision will not affect their children's
eligibility for free milk. The notification may be included in the
letter/notice to parents/guardians that accompanies the free milk
application, on the application itself or in a separate notice provided
to parents/guardians. The notice must give parents/guardians adequate
time to respond. For children determined eligible through direct
certification, the notice of potential disclosure may be included in
the document informing parents/guardians of their children's
eligibility for free milk through direct certification.
(6) May social security numbers be disclosed? The State agency or
child care institution, as appropriate, may disclose social security
numbers to any programs or persons authorized to receive all program
eligibility information under this paragraph (g), provided parents/
guardians have not declined to have their information disclosed.
However State agencies and child care institutions that plan to
disclose social security numbers must give notice of the planned use of
the social security numbers. This notice must be in accordance with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note). The
application must include substantially the following language for
disclosures of social security numbers to Medicaid or SCHIP: ``The
social security number may also be disclosed to Medicaid and the State
Children's Health Insurance Program for the purpose of identifying and
seeking to enroll eligible children in one of these health insurance
programs.'' This
[[Page 2202]]
language is in addition to the notice required in paragraph (f) of this
section. State agencies and child care institutions are responsible for
drafting the appropriate notice for disclosures of social security
numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or child care institution, as
appropriate, must have a written agreement with the State or local
agency or agencies administering Medicaid or SCHIP prior to disclosing
children's free milk eligibility information. At a minimum, the
agreement must:
(i) Identify the health insurance program or health agency
receiving children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or child care institution, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (g) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of
children's free milk eligibility information to Medicaid or SCHIP, as
provided in this paragraph (g), must ensure that any child care
institution acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free milk eligibility information to seek to enroll children in those
health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
PART 225--SUMMER FOOD SERVICE PROGRAM
1. The authority citation for Part 225 continues to read as
follows:
Authority: Secs. 9, 13, and 14, National School Lunch Act, as
amended (42 U.S.C. 1758, 1761, and 1762a).
2. In Sec. 225.2, add new paragraphs Disclosure; Medicaid; and
State Children's Health Insurance Program (SCHIP) in alphabetical order
to read as follows:
Sec. 225.2 Definitions.
* * * * *
Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal
eligibility process that is revealed or used for a purpose other than
for the purpose for which the information was obtained. The term refers
to access, release, or transfer of personal data about children by
means of print, tape, microfilm, microfiche, electronic communication
or any other means.
* * * * *
Medicaid means the State medical assistance program under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.).
* * * * *
State Children's Health Insurance Program (SCHIP) means the State
medical assistance program under title XXI of the Social Security Act
(42 U.S.C. 1397aa et seq.).
* * * * *
3. In Sec. 225.15:
a. Revise paragraph (f)(4)(iv), and
b. Redesignate paragraphs (g) and (h) as paragraphs (h) and (i) and
add a new paragraph (g).
The revision and addition reads as follows:
Sec. 225.15 Management responsibilities of sponsors.
* * * * *
(f) * * *
(4) * * *
(iv) The following statement that provides notice to the household
member whose social security number is disclosed: ``Unless you include
your child's case number for the Food Stamp Program, the Food
Distribution Program on Indian Reservations (or other identifier for
the Food Distribution Program on Indian Reservations) or the Temporary
Assistance for Needy Families Program, you must include the social
security number of the adult household member signing the application
or indicate that the household member does not have a social security
number. This is required by section 9 of the National School Lunch Act.
The social security number is not mandatory, but the application cannot
be approved if a social security number is not given or an indication
is not made that the signer does not have a social security number. The
social security number will be used in the administration and
enforcement of the program.''
* * * * *
(g) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP).
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow sponsors
to disclose children's free and reduced price meal eligibility
information to Medicaid and SCHIP. Sponsors may then elect to do so.
Children's program eligibility information may only be disclosed to
Medicaid or SCHIP when both the State agency and the sponsor so elect,
the parent/guardian does not decline to have their eligibility
information disclosed as described in paragraph (g)(5), and the
requirements in this paragraph (g) are met. y
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or sponsor, as appropriate, may disclose children's
names, eligibility status (whether they are eligible for free or
reduced price meals), and any other eligibility information obtained
through the free and reduced price meal application or obtained through
direct certification to persons directly connected with the
administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration
of Medicaid and SCHIP for purposes of disclosure of children's free and
[[Page 2203]]
reduced price meal eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal eligibility information?
Medicaid and SCHIP agencies and health insurance program operators
receiving children's free and reduced price meal eligibility
information may only use the information to enroll children in Medicaid
or SCHIP. The Medicaid and SCHIP enrollment process may include
targeting and identifying children from low-income households who are
potentially eligible for Medicaid or SCHIP for the purpose of seeking
to enroll them in Medicaid or SCHIP.
(5) What are the requirements for notifying households of potential
disclosure to Medicaid or SCHIP? The State agency or sponsor, as
appropriate, must notify parents/guardians that their children's free
or reduced price meal eligibility information will be disclosed to
Medicaid and/or SCHIP unless the parent/guardian elects not to have
their information disclosed. Additionally, the State agency or sponsor,
as appropriate, must give parents/guardians an opportunity to elect not
to have their information disclosed to Medicaid or SCHIP. Only the
parent or guardian who is a member of the household or family for
purposes of the free and reduced price meal or free milk application
may decline the disclosure of eligibility information. The notification
must inform parents/guardians that they are not required to consent to
the disclosure, that the information, if disclosed, will be used to
identify children eligible for and seek to enroll children in a health
insurance program, and that their decision will not affect their
children's eligibility for free or reduced price meals. The
notification may be included in the letter/notice to parents/guardians
that accompanies the free and reduced price application, on the
application itself or in a separate notice provided to parents/
guardians. The notice must give parents/guardians adequate time to
respond. For children determined eligible through direct certification,
the notice of potential disclosure may be included in the document
informing parents/guardians of their children's eligibility for free
meals through direct certification.
(6) May social security numbers be disclosed? The State agency or
sponsor, as appropriate, may disclose social security numbers to any
programs or persons authorized to receive all program eligibility
information under this paragraph (g), provided parents/guardians have
not declined to have their information disclosed. However, State
agencies and sponsors that plan to disclose social security numbers
must give notice of the planned use of the social security number. This
notice must be in accordance with section 7(b) of the Privacy Act of
1974 (5 U.S.C. 552a note). The application must include substantially
the following language for disclosures of social security numbers to
Medicaid or SCHIP: ``The social security number may also be disclosed
to Medicaid and the State Children's Health Insurance Program for the
purpose of identifying and seeking to enroll eligible children in one
of these health insurance programs.'' This language is in addition to
the notice required in paragraph (f)(4)(iv) of this section. State
agencies and sponsors are responsible for drafting the appropriate
notice for disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or sponsor, as appropriate, must have a
written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free and
reduced price eligibility information. At a minimum, the agreement
must:
(i) Identify the health insurance program or health agency
receiving children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or sponsor, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (g) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of
children's free and reduced price meal eligibility information to
Medicaid or SCHIP, as provided in this paragraph (g), must ensure that
any sponsor acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free and reduced price meal eligibility information to seek to enroll
children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
* * * * *
PART 226--CHILD AND ADULT CARE FOOD PROGRAM
1. The authority citation for Part 226 continues to read as
follows:
Authority: Secs. 9, 11, 14, 16 and 17, National School Lunch
Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765, and 1766).
2. In Sec. 226.2, add new paragraphs Disclosure; Medicaid; and
State Children's Health Insurance Program (SCHIP) in alphabetical order
to read as follows:
Sec. 226.2 Definitions.
* * * * *
Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal
eligibility process that is revealed or used for a purpose other than
for the purpose for which the information was obtained. The term refers
to access, release, or transfer of personal data about children by
means of print, tape, microfilm, microfiche, electronic communication
or any other means.
* * * * *
Medicaid means Title XIX of the Social Security Act.
* * * * *
State Children's Health Insurance Program (SCHIP) means the State
medical assistance program under title XXI of the Social Security Act (
42 U.S.C. 1397aa et seq.).
* * * * *
3. In Sec. 226.23, revise paragraph (e)(1)(ii)(F) and add a new
paragraph (i) to read as follows:
Sec. 226.23 Free and reduced-price meals.
* * * * *
(e)(1) * * *
[[Page 2204]]
(ii) * * *
(F) A statement that includes substantially the following
information: ``Unless you include your child's case number for the Food
Stamp Program, the Food Distribution Program on Indian Reservations (or
other identifier for the Food Distribution Program on Indian
Reservations) or the Temporary Assistance for Needy Families Program,
you must include the social security number of the adult household
member signing the application or indicate that the household member
does not have a social security number. This is required by section 9
of the National School Lunch Act. The social security number is not
mandatory, but the application cannot be approved if a social security
number is not given or an indication is not made that the signer does
not have a social security number. The social security number will be
used in the administration and enforcement of the program.'' State
agencies and institutions must ensure that the notice complies with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note); and
* * * * *
(i) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow
institutions to disclose children's free and reduced price meal
eligibility information to Medicaid and SCHIP. Institutions may then
elect to do so. Children's program eligibility information may only be
disclosed to Medicaid or SCHIP when both the State agency and the
institution so elect, the parent/guardian does not decline to have
their eligibility information disclosed as described in paragraph
(i)(5), and the requirements in this paragraph (i) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or institution, as appropriate, may disclose
children's names, eligibility status (whether they are eligible for
free or reduced price meals), and any other eligibility information
obtained through the free and reduced price meal application to persons
directly connected with the administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration
of Medicaid and SCHIP for purposes of disclosure of children's free and
reduced price meal eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal eligibility information?
Medicaid and SCHIP agencies and health insurance program operators
receiving children's free and reduced price meal eligibility
information may only use the information to seek to enroll children in
Medicaid or SCHIP. The Medicaid and SCHIP enrollment process may
include targeting and identifying children from low-income households
who are potentially eligible for Medicaid or SCHIP for the purpose of
seeking to enroll them in Medicaid or SCHIP.
(5) What are the requirements for notifying households of potential
disclosure to Medicaid or SCHIP? The State agency or institution, as
appropriate, must notify parents/guardians that children's free or
reduced price meal eligibility information will be disclosed to
Medicaid and/or SCHIP unless the parent/guardian elects not to have
their information disclosed. Additionally, the State agency or
institution, as appropriate, must give parents/guardians an opportunity
to elect not to have their information disclosed to Medicaid or SCHIP.
Only the parent or guardian who is a member of the household or family
for purposes of the free and reduced price meal or free milk
application may decline the disclosure of eligibility information. The
notification must inform parents/guardians that they are not required
to consent to the disclosure, that the information, if disclosed, will
be used to identify children eligible for and to seek to enroll
children in a health insurance program, and that their decision will
not affect their children's eligibility for free or reduced price
meals. The notification may be included in the letter/notice to
parents/guardians that accompanies the free and reduced price
application, on the application itself or in a separate notice provided
to parents/guardians. The notice must give parents/guardians adequate
time to respond. For children determined eligible through direct
certification, the notice of potential disclosure may be included in
the document informing parents/guardians of their children's
eligibility for free meals through direct certification.
(6) May social security numbers be disclosed? The State agency or
institution, as appropriate, may disclose social security numbers to
any programs or persons authorized to receive all program eligibility
information under this paragraph (i), provided parents/guardians have
not declined to have their information disclosed. However, State
agencies and institutions that plan to disclose social security numbers
must give notice of the planned use of the social security numbers.
This notice must be in accordance with section 7(b) of the Privacy Act
of 1974 (5 U.S.C. 552a note). The application must include
substantially the following language for disclosures of social security
numbers to Medicaid or SCHIP: ``The social security number may also be
disclosed to Medicaid and the State Children's Health Insurance Program
for the purpose of identifying and seeking to enroll eligible children
in one of these health insurance programs.'' This language is in
addition to the notice required in paragraph (e)(1)(i)(F) of this
section. State agencies and institutions are responsible for drafting
the appropriate notice for disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or institution, as appropriate, must have
a written agreement with the State or local agency or agencies
administering Medicaid or SCHIP prior to disclosing children's free and
reduced price eligibility information. At a minimum, the agreement
must:
(i) Identify the health insurance program or health agency
receiving children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or institution, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent
[[Page 2205]]
not authorized by statute or this section, any information obtained
under this paragraph (i) will be fined not more than $1,000 or
imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of
children's free and reduced price meal eligibility information to
Medicaid or SCHIP, as provided in this paragraph (i), must ensure that
any institution acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free and reduced price meal eligibility information to seek to enroll
children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
PART 245--DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS
AND FREE MILK IN SCHOOLS
1. The authority citation for Part 245 is revised to read as
follows:
Authority: 42 U.S.C. 1752, 1758, 1759a, 1772, 1773, and 1779.
2. In Sec. 245.2:
a. Redesignate paragraph (a-3) as paragraph (a-4) and add new
paragraph (a-3) in its place;
b. Redesignate paragraph (f-1) as paragraph (f-2) and add a new
paragraph (f-1) in its place; and
c. Redesignate paragraphs (k) and (l) as paragraphs (l) and (m) and
add a new paragraph (k).
The additions read as follows:
Sec. 245.2 Definitions.
* * * * *
(a-3) Disclosure means individual children's program eligibility
information obtained through the free and reduced price meal or free
milk eligibility process that is revealed or used for a purpose other
than for the purpose for which the information was obtained. The term
refers to access, release, or transfer of personal data about children
by means of print, tape, microfilm, microfiche, electronic
communication or any other means.
* * * * *
(f-1) Medicaid means the State medical assistance program under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
* * * * *
(k) State Children's Health Insurance Program (SCHIP) means the
State medical assistance program under title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.).
* * * * *
3. In Sec. 245.6, revise paragraph (a)(1) and add a new paragraph
(f) to read as follows:
Sec. 245.6 Certification of children for free and reduced price meals
and free milk.
(a) * * *
(1) ``Unless you include your child's case number for the Food
Stamp Program, the Food Distribution Program on Indian Reservations (or
other identifier for the Food Distribution Program on Indian
Reservations) or the Temporary Assistance for Needy Families Program,
you must include the social security number of the adult household
member signing the application or indicate that the household member
does not have a social security number. This is required by section 9
of the National School Lunch Act. The social security number is not
mandatory, but the application cannot be approved if a social security
number is not given or an indication is not made that the signer does
not have a social security number. The social security number will be
used in the administration and enforcement of the program.'' State
agencies and school food authorities must ensure that the notice
complies with section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a
note); and
* * * * *
(f) Disclosure of program eligibility information to State Medicaid
(Medicaid) and the State Children's Health Insurance Program (SCHIP)
Program eligibility information about children eligible for free and
reduced price meals may be disclosed to Medicaid and SCHIP as described
in this section.
(1) Who decides whether to disclose program eligibility information
to Medicaid and/or SCHIP? The State agency may elect to allow school
food authorities to disclose children's free and reduced price meal
eligibility information to Medicaid and SCHIP. School food authorities
may then elect to do so. Children's program eligibility information may
only be disclosed to Medicaid or SCHIP when both the State agency and
the school food authority so elect, the parent/guardian does not
decline to have their eligibility information disclosed as described in
paragraph (f)(5), and the requirements in this paragraph (f) are met.
(2) What information may we disclose for use by Medicaid and SCHIP?
The State agency or school food authority, as appropriate, may disclose
children's names, eligibility status (whether they are eligible for
free or reduced price meals or free milk), and any other eligibility
information obtained through the free and reduced price meal/milk
application or obtained through direct certification to persons
directly connected with the administration of Medicaid or SCHIP.
(3) Who are persons ``directly connected'' with the administration
of Medicaid and SCHIP? State employees and persons authorized under
Federal and State Medicaid and SCHIP requirements to carry out initial
processing of Medicaid or SCHIP applications or to make eligibility
determinations are persons directly connected with the administration
of Medicaid and SCHIP for purposes of disclosure of children's free and
reduced price meal and free milk eligibility information.
(4) What are the restrictions on how Medicaid and SCHIP use
children's free and reduced price meal and free milk eligibility
information? Medicaid and SCHIP agencies and health insurance program
operators receiving children's free and reduced price meal and free
milk eligibility information may only use the information to seek to
enroll children in Medicaid or SCHIP. The Medicaid and SCHIP enrollment
process may include targeting and identifying children from low-income
households who are potentially eligible for Medicaid or SCHIP for the
purpose of seeking to enroll them in Medicaid or SCHIP.
(5) Must we notify households of potential disclosure to Medicaid
or SCHIP? The State agency or school food authority, as appropriate,
must notify parents/guardians that their children's free or reduced
price meal or free milk eligibility information will be disclosed to
Medicaid and/or SCHIP unless the parent/guardian elects not to have
their information disclosed. Additionally, the State agency or school
food authority, as appropriate, must give parents/guardians an
opportunity to elect not to have their information disclosed to
Medicaid or SCHIP. Only the parent or guardian who is a member of the
household or family for purposes of the free and reduced price meal or
free milk
[[Page 2206]]
application may decline the disclosure of eligibility information. The
notification must inform parents/guardians that they are not required
to consent to the disclosure, that the information, if disclosed, will
be used to identify children eligible for and seek to enroll children
in a health insurance program, and that their decision will not affect
their children's eligibility for free or 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 give parents/guardians adequate
time to respond. For children determined eligible through direct
certification, the notice of potential disclosure may be included in
the document informing parents/guardians of their children's
eligibility for free meals or free milk through direct certification.
(6) May social security numbers be disclosed? The State agency or
school food authority, as appropriate, may disclose social security
numbers to any programs or persons authorized to receive all program
eligibility information under this paragraph (f), provided parents/
guardians have not declined to have their information disclosed.
However, State agencies and school food authorities that plan to
disclose social security numbers must give notice of the planned use of
the social security numbers. This notice must be in accordance with
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note). The
application must include substantially the following language for
disclosures of social security numbers to Medicaid or SCHIP: ``The
social security number may also be disclosed to Medicaid and the State
Children's Health Insurance Program for the purpose of identifying and
seeking to enroll eligible children in one of these health insurance
programs.'' This language is in addition to the notice required in
paragraph (a)(1) of this section. State agencies and school food
authorities are responsible for drafting the appropriate notice for
disclosures of social security numbers.
(7) Are agreements required before disclosing program eligibility
information? The State agency or school food authority, as appropriate,
must have a written agreement with the State or local agency or
agencies administering Medicaid or SCHIP prior to disclosing children's
free and reduced price eligibility information. At a minimum, the
agreement must:
(i) Identify the health insurance program or health agency
receiving children's eligibility information;
(ii) Describe the information that will be disclosed;
(iii) Require that the Medicaid or SCHIP agency use the information
obtained and specify that the information must only be used to seek to
enroll children in Medicaid or SCHIP;
(iv) Describe how the information will be protected from
unauthorized uses and disclosures;
(v) Describe the penalties for unauthorized disclosure; and
(vi) Be signed by both the Medicaid or SCHIP program or agency and
the State agency or school food authority, as appropriate.
(8) What are the penalties for unauthorized disclosure or misuse of
information? In accordance with section 9(b)(2)(C)(v) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any
individual who publishes, divulges, discloses or makes known in any
manner, or to any extent not authorized by statute or this section, any
information obtained under this paragraph (f) will be fined not more
than $1,000 or imprisoned for up to 1 year, or both.
(9) What are the State agency's responsibilities regarding
disclosures? State agencies that elect to allow disclosure of
children's free and reduced price meal eligibility information to
Medicaid or SCHIP, as provided in this paragraph (f), must ensure that
any school food authority acting in accordance with that option:
(i) Has a written agreement with the State or local agency or
agencies administering health insurance programs for children under
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.
and 1397aa et seq.) that requires the health agencies to use children's
free and reduced price meal eligibility information to seek to enroll
children in those health insurance programs; and
(ii) Notifies each household of the information that will be
disclosed, that the information disclosed will be used only to seek to
enroll children in Medicaid or SCHIP and provides each parent/guardian
with an opportunity to elect not to have the information disclosed.
Dated: January 5, 2001.
Shirley R. Watkins,
Under Secretary, Food, Nutrition and Consumer Services.
[FR Doc. 01-661 Filed 1-8-01; 10:50 am]
BILLING CODE 3410-30-P
This archive was generated by hypermail 2b29 : 2001/01/11 EST