States may use information they obtain in the process of administering Medicaid only for the purposes of administering the program, pursuant to a State plan condition in section 1902(a)(7) of the Social Security Act, 42 U.S.C. § 1396a(a)(7). The proposed HIPAA rule applies to State Medicaid programs, which under the rule are considered health plans. There will be no conflict in the substantive requirements of current rules and this proposed rule. Medicaid rules regarding disclosure of patient information are stricter than provisions of the proposed rule; therefore, Medicaid agencies simply will continue to follow the Medicaid rules.