# Medicare Transaction Fraud Prevention Act: What It Means for You

Medicare is testing a new fraud-detection system that uses artificial intelligence to spot suspicious medical equipment and lab test claims before they get paid. Starting in 2026, the government will run this two-year pilot program to see if a computer algorithm can catch fraudulent transactions by scoring them on a risk scale from 1 to 99, with higher numbers indicating more suspicious activity. The system will focus specifically on durable medical equipment (like wheelchairs, oxygen tanks, and CPAP machines) and clinical laboratory tests (like blood work).

Here's how it would work if you're a Medicare beneficiary: You'd have to voluntarily opt into the program, and you'd need to already be receiving electronic Medicare Summary Notices. If the algorithm flags one of your claims as high-risk, Medicare won't automatically reject it. Instead, a real person will review it, and you'll get contacted by email or phone to confirm whether the transaction is legitimate. If you believe the flagging is based on wrong information about you, you'll have a chance to correct it. If Medicare still thinks something is suspicious after your response, they'll send you electronic alerts every two weeks for three months with information about how to report fraud.

The system looks for red flags like when a provider suddenly changes their banking information, when a medical equipment supplier has an unusual spike in claims in one area, or when you're getting services from a provider you've never worked with before. The government will work with medical equipment suppliers to develop the system and will make sure the artificial intelligence is thoroughly tested before it goes live. Importantly, no transaction will be blocked based solely on the algorithm's score—a human always has to make the final decision, and you always have the chance to respond if something gets flagged.