S. 2066 — Medicare Transaction Fraud Prevention Act

This section amends the heading of Section 1128K of the Social Security Act to include a reference to a new pilot program and adds subsection (d) to establish a 2-year pilot program, beginning not later than January 1, 2026, testing predictive risk-scoring algorithms (scoring relevant transactions from 1 [least risky] to 99 [most risky]) to oversee Medicare claims for durable medical equipment (as defined in SSA section 1861(n)) or clinical diagnostic laboratory tests furnished to applicable beneficiaries. The pilot program is limited to voluntarily participating applicable beneficiaries who opt in to receive electronic Medicare Summary Notices and may terminate participation at any time. In implementing the algorithms, the Secretary must collaborate with industry representatives (including DME suppliers); conduct pre-implementation testing, evaluation, and review per Executive Order 14179; notify affected beneficiaries, providers, and suppliers (with OIG communication and waiver authority); and for transactions exceeding a specified risk threshold—(1) conduct human review to determine suspension; (2) allow beneficiary cure or confirmation via email or phone; and (3) if suspended, issue automatic electronic Medicare Summary Notice alerts, followed by biweekly notices for 3 months and fraud-reporting guidance. The Secretary also gains authority to terminate or reissue Medicare cards to prevent fraud and abuse. (As background, Section 1128K of the SSA provides enhanced oversight to combat Medicare fraud and abuse by providers and suppliers.)