H.R. 3996 — Medicare Transaction Fraud Prevention Act

This section amends the heading of Section 1128K of the Social Security Act to reference a new pilot program and establishes a two-year pilot program, beginning not later than January 1, 2026, to test predictive risk-scoring algorithms (scoring relevant transactions from 1 [least risky] to 99 [most risky]) for overseeing Medicare payments for durable medical equipment and clinical diagnostic laboratory tests furnished to applicable beneficiaries. Applicable beneficiaries are Medicare enrollees who voluntarily opt in after electing electronic Medicare Summary Notices and may terminate participation at any time; the Secretary must collaborate with industry stakeholders (including durable medical equipment suppliers), conduct pre-implementation testing and review of the algorithm consistent with Executive Order 14179, notify affected parties of its use, and coordinate with the Department of Health and Human Services Office of Inspector General (with authority to waive notice if appropriate). For transactions scored above a Secretary-specified risk threshold, the Secretary must conduct human-reviewed assessments, allow beneficiaries to cure inaccuracies or confirm claims via email or phone, and—if suspending payment—send immediate electronic Medicare Summary Notices with fraud-reporting information, followed by notices every two weeks for three months; the Secretary also gains authority to terminate or reissue Medicare cards to combat fraud.