II 

118TH CONGRESS 

2D SESSION S. 3630 

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 SENATE OF THE UNITED STATES 

JANUARY 18, 2024 

Mr. BRAUN (for himself and Mr. CASSIDY) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend title XI of the Social Security Act to establish 

a pilot program for testing the use of a predictive riskscoring algorithm to provide oversight of payments for 

durable medical equipment and clinical diagnostic laboratory tests under the Medicare program. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Transaction 

5 Fraud Prevention Act’’. 


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1 SEC. 2. PILOT PROGRAM TESTING USE OF PREDICTIVE 

2 RISK-SCORING ALGORITHM TO PROVIDE 

3 OVERSIGHT OF PAYMENTS FOR DURABLE 

4 MEDICAL EQUIPMENT AND CLINICAL DIAG5 NOSTIC LABORATORY TESTS UNDER THE 

6 MEDICARE PROGRAM. 

7 Section 1128K of the Social Security Act (42 U.S.C. 

8 1320a–7n) is amended— 

9 (1) in the section heading by inserting ‘‘; 

10 PILOT PROGRAM TESTING USE OF PREDICTIVE

11 RISK-SCORING ALGORITHM TO PROVIDE OVER12 SIGHT OF PAYMENTS FOR DURABLE MEDICAL

13 EQUIPMENT AND CLINICAL DIAGNOSTIC LAB14 ORATORY TESTS UNDER THE MEDICARE PRO15 GRAM’’ after ‘‘ABUSE’’; and 

16 (2) by adding at the end the following new sub17 section: 

18 ‘‘(d) PILOT PROGRAM TESTING USE OF PREDICTIVE

19 RISK-SCORING ALGORITHM TO PROVIDE OVERSIGHT OF

20 PAYMENTS FOR DURABLE MEDICAL EQUIPMENT AND

21 CLINICAL DIAGNOSTIC LABORATORY TESTS UNDER THE

22 MEDICARE PROGRAM.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall estab24 lish a pilot program to test the use of predictive 

25 risk-scoring algorithms to provide oversight of rel26 evant transactions (as defined in paragraph (7)(B)). 


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1 ‘‘(2) DURATION.—The pilot program shall be 

2 conducted for a period of 2 years, beginning not 

3 later than January 1, 2025. 

4 ‘‘(3) SCOPE.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 limit the implementation of the pilot program to 

7 relevant transactions involving applicable items 

8 or services furnished to beneficiaries who have 

9 opted in to receive electronic Medicare Sum10 mary Notices (in this subsection referred to as 

11 ‘applicable beneficiaries’). 

12 ‘‘(B) VOLUNTARY PARTICIPATION.—An ap13 plicable beneficiary may opt out of the pilot 

14 program at any time. 

15 ‘‘(4) CONSIDERATIONS.—The Secretary may, 

16 for purposes of identifying and calculating the risks 

17 of relevant transactions under the pilot program, 

18 consider the following factors: 

19 ‘‘(A) The absence of a prior relationship 

20 between the beneficiary and a provider of serv21 ices (as defined in section 1861(u)) or supplier 

22 (as defined in section 1861(d)). 

23 ‘‘(B) Aberrant billing patterns for a pro24 vider of services or supplier with regards to vol25 ume of claims in one particular area. 


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1 ‘‘(C) Electronic fund transfer (EFT) 

2 changes. 

3 ‘‘(D) Changes in ownership of a provider 

4 of services or supplier. 

5 ‘‘(5) COLLABORATION.—The Secretary shall 

6 work with industry representatives (including sup7 pliers of durable medical equipment) on the develop8 ment and implementation of the pilot program. 

9 ‘‘(6) REQUIREMENTS.—Under the pilot pro10 gram, the Secretary shall— 

11 ‘‘(A) adopt a predictive risk-scoring algo12 rithm, modeled similar to leading payment card 

13 networks’ real-time consumer feedback mecha14 nisms, that would learn from beneficiary data 

15 to score relevant transactions from 1 (least 

16 risky) to 99 (most risky); 

17 ‘‘(B) prior to implementation of any pre18 dictive risk-scoring algorithm adopted under 

19 subparagraph (A) under the pilot program— 

20 ‘‘(i) require sufficient testing, evalua21 tion, and review of such algorithm, taking 

22 into consideration the Blueprint for an AI 

23 Bill of Rights issued by the White House 

24 Office of Science and Technology Policy in 

25 October, 2022; 


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1 ‘‘(ii) establish methods for notifying 

2 applicable beneficiaries and providers of 

3 services and suppliers impacted by the use 

4 of the algorithm regarding such usage (in5 cluding information regarding how bene6 ficiary data is collected and processed 

7 under the pilot program to produce a risk 

8 score for relevant transactions and the pos9 sible implications associated with the use 

10 of the algorithm); and 

11 ‘‘(iii) establish methods of commu12 nication with the Office of the Inspector 

13 General of the Department of Health and 

14 Human Service, and the ability to waive or 

15 forgo notice to an applicable beneficiary or 

16 a provider of services or supplier if appro17 priate; 

18 ‘‘(C) for any relevant transaction involving 

19 an item or service furnished to an applicable 

20 beneficiary identified by a predictive risk-scor21 ing algorithm adopted under subparagraph (A) 

22 and implemented under subparagraph (B) as 

23 having a risk score that exceeds a level of risk 

24 specified by the Secretary— 


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1 ‘‘(i) review the relevant transaction to 

2 determine whether it should be suspended 

3 pending the applicable beneficiary’s re4 sponse under clause (ii); 

5 ‘‘(ii) provide the applicable beneficiary 

6 the opportunity, by email or phone call re7 sponse— 

8 ‘‘(I) to cure a high-risk score or 

9 suspended transaction that the bene10 ficiary believes is based on inaccurate 

11 underlying data; and 

12 ‘‘(II) confirm the relevant trans13 action; 

14 ‘‘(iii) if, based on the results of the re15 view, the relevant transaction is sus16 pended— 

17 ‘‘(I) trigger an automatic alert to 

18 the applicable beneficiary by electroni19 cally sending a Medicare Summary 

20 Notice that includes the relevant 

21 transaction; 

22 ‘‘(II) require that all subsequent 

23 Medicare Summary Notices involving 

24 the relevant transaction be sent elec25 tronically and in two week intervals 


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1 for 3 months after the first alert is 

2 sent under subclause (I); and 

3 ‘‘(III) include on such Medicare 

4 Summary Notices, as determined ap5 propriate by the Secretary, informa6 tion explaining how the beneficiary 

7 may report suspected fraud to rel8 evant law enforcement agencies. 

9 ‘‘(D) have the authority to determine when 

10 a Medicare card must be terminated or a new 

11 card issued to prevent fraud and abuse. 

12 ‘‘(7) CLARIFICATION.—Any suspension of an 

13 account or transaction under the pilot program shall 

14 be based on a human review process, informed 

15 through the implementation of the predictive risk16 scoring algorithm. 

17 ‘‘(8) DEFINITIONS.—In this subsection: 

18 ‘‘(A) APPLICABLE ITEM OR SERVICE.—The 

19 term ‘applicable item or service’ means— 

20 ‘‘(i) an item of durable medical equip21 ment (as defined in section 1861(n)); and 

22 ‘‘(ii) a clinical diagnostic laboratory 

23 test. 

24 ‘‘(B) RELEVANT TRANSACTION.—The term 

25 ‘relevant transaction’ means a claim for payVerDate Sep 11 2014 04:00 Jan 25, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3630.IS S3630

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1 ment for an applicable item or service furnished 

2 to an applicable beneficiary, as determined by 

3 the Secretary.’’. 

Æ 


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