I 
118TH CONGRESS 
2D SESSION 
H. R. 7147 
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 diag-
nostic laboratory tests under the Medicare program. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 30, 2024 
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 labora-
tory tests under the Medicare program. 
Be it enacted by the Senate and House of Representa-
tives 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’’. 
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SEC. 2. PILOT PROGRAM TESTING USE OF PREDICTIVE 
RISK-SCORING 
ALGORITHM 
TO 
PROVIDE 
OVERSIGHT OF PAYMENTS FOR DURABLE 
MEDICAL EQUIPMENT AND CLINICAL DIAG-
NOSTIC 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 OVER-
SIGHT OF PAYMENTS FOR DURABLE MEDICAL 
EQUIPMENT AND CLINICAL DIAGNOSTIC LAB-
ORATORY TESTS UNDER THE MEDICARE PRO-
GRAM’’ after ‘‘ABUSE’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(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 estab-
lish a pilot program to test the use of predictive 
risk-scoring algorithms to provide oversight of rel-
evant transactions (as defined in paragraph (8)(B)). 
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‘‘(2) DURATION.—The pilot program shall be 
conducted for a period of 2 years, beginning not 
later than January 1, 2025. 
‘‘(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 beneficiaries who have 
opted in to receive electronic Medicare Sum-
mary Notices (in this subsection referred to as 
‘applicable beneficiaries’). 
‘‘(B) VOLUNTARY PARTICIPATION.—An ap-
plicable beneficiary may opt out of the pilot 
program 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 serv-
ices (as defined in section 1861(u)) or supplier 
(as defined in section 1861(d)). 
‘‘(B) Aberrant billing patterns for a pro-
vider of services or supplier with regards to vol-
ume of claims in one particular area. 
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‘‘(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 sup-
pliers of durable medical equipment) on the develop-
ment and implementation of the pilot program. 
‘‘(6) REQUIREMENTS.—Under the pilot pro-
gram, the Secretary shall— 
‘‘(A) adopt a predictive risk-scoring algo-
rithm, modeled similar to leading payment card 
networks’ real-time consumer feedback mecha-
nisms, that would learn from beneficiary data 
to score relevant transactions from 1 (least 
risky) to 99 (most risky); 
‘‘(B) prior to implementation of any pre-
dictive risk-scoring algorithm adopted under 
subparagraph (A) under the pilot program— 
‘‘(i) require sufficient testing, evalua-
tion, and review of such algorithm, taking 
into consideration the Blueprint for an AI 
Bill of Rights issued by the White House 
Office of Science and Technology Policy in 
October, 2022; 
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‘‘(ii) establish methods for notifying 
applicable beneficiaries and providers of 
services and suppliers impacted by the use 
of the algorithm regarding such usage (in-
cluding information regarding how bene-
ficiary data is collected and processed 
under the pilot program to produce a risk 
score for relevant transactions and the pos-
sible implications associated with the use 
of the algorithm); and 
‘‘(iii) establish methods of commu-
nication 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 appro-
priate; 
‘‘(C) for any relevant transaction involving 
an item or service furnished to an applicable 
beneficiary identified by a predictive risk-scor-
ing 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— 
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‘‘(i) review the relevant transaction to 
determine whether it should be suspended 
pending the applicable beneficiary’s re-
sponse under clause (ii); 
‘‘(ii) provide the applicable beneficiary 
the opportunity, by email or phone call re-
sponse— 
‘‘(I) to cure a high-risk score or 
suspended transaction that the bene-
ficiary believes is based on inaccurate 
underlying data; and 
‘‘(II) confirm the relevant trans-
action; 
‘‘(iii) if, based on the results of the re-
view, the relevant transaction is sus-
pended— 
‘‘(I) trigger an automatic alert to 
the applicable beneficiary by electroni-
cally sending a Medicare Summary 
Notice that includes the relevant 
transaction; 
‘‘(II) require that all subsequent 
Medicare Summary Notices involving 
the relevant transaction be sent elec-
tronically and in two week intervals 
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for 3 months after the first alert is 
sent under subclause (I); and 
‘‘(III) include on such Medicare 
Summary Notices, as determined ap-
propriate by the Secretary, informa-
tion explaining how the beneficiary 
may report suspected fraud to rel-
evant 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 equip-
ment (as defined in section 1861(n)); and 
‘‘(ii) a clinical diagnostic laboratory 
test. 
‘‘(B) RELEVANT TRANSACTION.—The term 
‘relevant transaction’ means a claim for pay-
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ment for an applicable item or service furnished 
to an applicable beneficiary, as determined by 
the Secretary.’’. 
Æ 
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