These giant worms dwell in the Nether in large bodies of lava, and need at least 8 blocks of vertical space to spawn; they are 6 blocks in length.
They utilize their tentacles to float a little bit beneath the surface of the lava in a vertical position, making them invisible to the player; they will remain in this position waiting for an opportune time to strike. If a player gets within 20 blocks of one, it will move up slightly, with its jaws just below the surface. Here, the player will see bubbling on the surface of the lava above the worm, only on the block directly above it, making it clear exactly where it is.
When the player gets within 15 blocks of the worm, it will stick its head above the lava and launch its tongue up to a distance of 20 blocks, grasping the player and dragging him into the lava toward itself (luckily, the speed at which the worm can pull the player is fairly slow, and even slower if the player moves in the opposite direction).
If the player fights back and heavily damages the worm it will release them and retreat back to its second position (with the bubbling lava visible) to slowly regenerate its health; when it has full health it'll come back for more, assuming the player is close enough.
If the player decides to not fight back (not a good idea), the worm will bring him to its jaws and clamp onto him, slowly inflicting damage as the lava does most of the work.
The player can damage the worm by hitting it's tongue, but when the worm reaches half a heart and retreats it must be killed by a direct hit on the head or body. Since the player can tell where the worm's at do to the bubbling lava, they can finish it off quickly by attacking it before it regenerates its health.
Now to the drops. This may be my favorite part of the mob!
When killed, there's a 25% chance it'll drop a Death Worm Core, which looks like a cracked black pearl with a fiery light emitting from the center. This item won't burn in lava, but instead with float to the surface as if it were in water. It can be combined with any item, doing so will make said item impervious to damage by fire or lava! The usefulness of this is obvious, but it could be put to maximum use by combining it with a shulker box.
As for XP, they will drop above average. I guess the XP could float too?
For health, they have 10 hearts like most mobs.
This addition would be a great way of keeping the player wary of their surroundings. It'd make crossing lava lakes and pools more risky and more interesting; I also feel it would make the Nether a more diverse and interesting place!
Here's an outline of the Death Worm:

It has four eyes and tentacles if anyone's confused.
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