A Florida based diabetic shoe company has agreed to pay over $5.5 million to settle allegations that the company sold custom fabricated shoe inserts to Medicare recipients that did not meet Medicare standards. Custom shoe inserts for diabetic patients can be covered by Medicare and Medicaid.
The United States alleges that between 2013 and 2018 the shoe company sold diabetic shoe inserts that were represented to be custom made for an individual’s foot but were actually made using generic foot models. Diabetic patients with a prescription were dispensed the generic foot insoles, and then the shoe company billed Medicare and Medicaid for the custom version. The shoe company would also sell the inserts to other providers who then billed government health care programs for custom inserts. Using generic foot models allowed the shoe company to increase their profits while providing a noncompliant product.
Additionally, the federal government alleges that the shoe company advertised to customers that it was proud to be Medicare compliant. The shoe company received their Medicare approval for the custom diabetic shoe inserts, but the approval was based upon false information submitted to Medicare.
The shoe company has entered into a three year Integrity Agreement (IA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). The IA, among other items, requires that the shoe company implement updated policies and procedures as part of its compliance program, and hire an Independent Review Organization to review the shoe company’s quarterly claims to Medicare and Medicaid.
The allegations were brought under the qui tam or whistleblower provisions of the False Claims Act by a former shoe company employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblower who brought the allegations in this case will receive a share of the settlement amount.
Compliance Perspective
Issue
It is extremely important that all members of the healthcare team are aware of what may be considered a false claim or a kickback. Ensure that all staff are aware that these violations can occur whether they are intentional or unintentional. Failure to promptly report a false claim or kickback can result in lawsuits, fines, and other sanctions. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1 Compliance and Ethics Program, CP 2.3 General Legal Duties and Antitrust Laws.
Discussion Points
- Review policies and procedures for preventing and reporting a false claim or anti-kickback statute violation. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect a false claim has been submitted or illegal kickback has occurred. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
