119-hr3996

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3996 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3996

 To amend title XI of the Social Security Act to establish a pilot 
 program for testing the use of a predictive risk-scoring algorithm to 
 provide oversight of payments for durable medical equipment and 
 clinical diagnostic laboratory tests under the Medicare program.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 June 12, 2025

Mr. Schweikert introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
 Ways and Means, for a period to be subsequently determined by the 
 Speaker, in each case for consideration of such provisions as fall 
 within the jurisdiction of the committee concerned

_______________________________________________________________________

 A BILL

 To amend title XI of the Social Security Act to establish a pilot 
 program for testing the use of a predictive risk-scoring algorithm to 
 provide oversight of payments for durable medical equipment and 
 clinical diagnostic laboratory tests under the Medicare program.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Medicare Transaction Fraud 
Prevention Act''.

SEC. 2. PILOT PROGRAM TESTING USE OF PREDICTIVE RISK-SCORING ALGORITHM 
 TO PROVIDE OVERSIGHT OF PAYMENTS FOR DURABLE MEDICAL 
 EQUIPMENT AND CLINICAL DIAGNOSTIC LABORATORY TESTS UNDER 
 THE MEDICARE PROGRAM.

 

Section 1128K of the Social Security Act (42 U.S.C. 1320a-7n) is 
amended--

    (1) in the section heading by inserting ``; pilot program 
 testing use of predictive risk-scoring algorithm to provide 
 oversight of payments for durable medical equipment and 
 clinical diagnostic laboratory tests under the medicare 
 program'' after ``abuse''; and

    (2) by adding at the end the following new subsection:
 ``
            (d) Pilot Program Testing Use of Predictive Risk-Scoring 
Algorithm To Provide Oversight of Payments for Durable Medical 
Equipment and Clinical Diagnostic Laboratory Tests Under the Medicare 
Program.--
 ``

    (1) In general.--The Secretary shall establish a pilot 
 program to test the use of predictive risk-scoring algorithms 
 to provide oversight of relevant transactions (as defined in 
 paragraph

    (8)
        (B) ).
 ``

    (2) Duration.--The pilot program shall be conducted for a 
 period of 2 years, beginning not later than January 1, 2026.
 ``

    (3) Scope.--
 ``
        (A) In general.--The Secretary shall limit the 
 implementation of the pilot program to relevant 
 transactions involving applicable items or services 
 furnished to applicable beneficiaries (as defined in 
 subparagraph
        (B) ).
 ``
        (B) Applicable beneficiary defined.--In this 
 subsection, the term `applicable beneficiary' means an 
 individual who has opted in to--
 ``
            (i) receive electronic Medicare Summary 
 Notices; and
 ``
            (ii) participate in the pilot program in 
 accordance with subparagraph
            (C) .
 ``
            (C) Voluntary participation.--An applicable 
 beneficiary may participate in the pilot program on a 
 voluntary basis and may terminate participation at any 
 time.
 ``

    (4) Considerations.--The Secretary may, for purposes of 
 identifying and calculating the risks of relevant transactions 
 under the pilot program, consider the following factors:
 ``
        (A) The absence of a prior relationship between 
 the beneficiary and a provider of services (as defined 
 in 

section 1861

    (u) ) or supplier (as defined in 

section 1861
            (d) ).
 ``
        (B) Aberrant billing patterns for a provider of 
 services or supplier with regards to volume of claims 
 in one particular area.
 ``
            (C) Electronic fund transfer

    (EFT) changes.
 ``
            (D) Changes in ownership of a provider of 
 services or supplier.
 ``

    (5) Collaboration.--The Secretary shall work with 
 industry representatives (including suppliers of durable 
 medical equipment) on the development and implementation of the 
 pilot program.
 ``

    (6) Requirements.--Under the pilot program, the Secretary 
 shall--
 ``
        (A) adopt a predictive risk-scoring algorithm 
 that would learn from beneficiary data to score 
 relevant transactions from 1 (least risky) to 99 (most 
 risky);
 ``
        (B) prior to implementation of any predictive 
 risk-scoring algorithm adopted under subparagraph
        (A) under the pilot program--
 ``
            (i) require sufficient testing, 
 evaluation, and review of such algorithm, 
 taking into consideration Executive Order 14179 
 (90 Fed. Reg. 8741; relating to removing 
 barriers to American leadership in artificial 
 intelligence);
 ``
            (ii) establish methods for notifying 
 applicable beneficiaries and providers of 
 services and suppliers impacted by the use of 
 the algorithm regarding such usage (including 
 information regarding how beneficiary data is 
 collected and processed under the pilot program 
 to produce a risk score for relevant 
 transactions and the possible implications 
 associated with the use of the algorithm); and
 ``
            (iii) establish methods of communication 
 with the Office of the Inspector General of the 
 Department of Health and Human Service, and the 
 ability to waive or forgo notice to an 
 applicable beneficiary or a provider of 
 services or supplier if appropriate;
 ``
            (C) for any relevant transaction involving an 
 item or service furnished to an applicable beneficiary 
 identified by a predictive risk-scoring algorithm 
 adopted under subparagraph
        (A) and implemented under 
 subparagraph
        (B) as having a risk score that exceeds a 
 level of risk specified by the Secretary--
 ``
            (i) review the relevant transaction to 
 determine whether it should be suspended 
 pending the applicable beneficiary's response 
 under clause
            (ii) ;
 ``
            (ii) provide the applicable beneficiary 
 the opportunity, by email or phone call 
 response--
 ``
            (I) to cure a high-risk score or 
 suspended transaction that the 
 beneficiary believes is based on 
 inaccurate underlying data; and
 ``
            (II) confirm the relevant 
 transaction; and
 ``
            (iii) if, based on the results of the 
 review, the relevant transaction is suspended--
 ``
            (I) trigger an automatic alert to 
 the applicable beneficiary by 
 electronically sending a Medicare 
 Summary Notice that includes the 
 relevant transaction;
 ``
            (II) require that all subsequent 
 Medicare Summary Notices involving the 
 relevant transaction be sent 
 electronically and in two week 
 intervals for 3 months after the first 
 alert is sent under subclause
            (I) ; and
 ``
            (III) include on such Medicare 
 Summary Notices, as determined 
 appropriate by the Secretary, 
 information explaining how the 
 beneficiary may report suspected fraud 
 to relevant law enforcement agencies; 
 and
 ``
            (D) have the authority to determine when a 
 Medicare card must be terminated or a new card issued 
 to prevent fraud and abuse.
 ``

    (7) Clarification.--Any suspension of an account or 
 transaction under the pilot program shall be based on a human 
 review process, informed through the implementation of the 
 predictive risk-scoring algorithm.
 ``

    (8) === Definitions. ===
-In this subsection:
 ``
        (A) Applicable item or service.--The term 
 `applicable item or service' means--
 ``
            (i) an item of durable medical equipment 
 (as defined in 

section 1861

    (n) ); and
 ``
            (ii) a clinical diagnostic laboratory 
 test.
 ``
        (B) Relevant transaction.--The term `relevant 
 transaction' means a claim for payment for an 
 applicable item or service furnished to an applicable 
 beneficiary, as determined by the Secretary.''.
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