Custom Diabetic Shoe Insert Fraud: When the Fabrication Does Not Match the Claim

Custom diabetic shoe insert fraud occurs when a supplier knowingly bills for custom-made inserts while furnishing products that do not match that fabrication claim. A patient can have a prescription, receive an insert and believe it was made for their foot. Inside the production operation, someone may know that the model used was generic. The claim tells one story about how the insert was made. The people making it can tell another.

Dia-Foot Sold a Custom Product Made From Generic Models, the Government Alleged

Dia-Foot and its president and CEO agreed to pay $5,538,338 in a civil settlement announced January 12, 2022. Dia-Foot allegedly used generic foot models to make inserts it represented as custom-made for individual patients. The Florida diabetic shoe company sold them nationwide between 2013 and 2018. According to the Justice Department’s settlement announcement, patients had prescriptions from healthcare providers and believed they were receiving custom products.

The alleged billing followed both routes through the business. According to the government, Dia-Foot billed Medicare and Medicaid itself, and it sold inserts to other providers who billed government health care programs for custom inserts. The government said using generic models allowed Dia-Foot to produce and sell more inserts and increase its profits. The alleged shortcut was in production. Its financial consequence reached the government claim, including claims submitted by another business.

The government also alleged that Dia-Foot advertised Medicare compliance and Medicare approval for its custom inserts, even though the approvals had been obtained using false information. The company’s advertised approval was itself part of the allegation. We would want to compare what the company said had been approved with what workers actually made.

A former employee brought the whistleblower case. The department said that employee would receive a share of the settlement. The alleged bargain cheated both the patient expecting an insert made for their foot and the taxpayers paying for that custom work.

How an Off-the-Shelf Insert Becomes a Custom Claim

An off-the-shelf insert billed as a custom molded diabetic insert is the product mismatch in its simplest form: the claim describes fabrication that the supplied product did not receive. A separate criminal case makes that comparison concrete.

The Justice Department’s announcement of guilty pleas in that criminal case described owners submitting or causing Medicare claims for three pairs of custom molded inserts per patient while beneficiaries received only off-the-shelf inserts.

The Dia-Foot allegations concern generic models used in production. The government’s account in the separate criminal case concerns off-the-shelf inserts supplied under a custom description. The patient received something, and Medicare was asked to pay for something described differently.

For an insider, that makes the production question unusually specific. What did the custom description promise about this insert, and what work actually produced it? The person who knows how the product was made may see the discrepancy before anyone examining the bill.

The Fabrication Records Behind the Claim

A fabrication inquiry connects the insert billed for a patient to the model and work used to make it. In the Dia-Foot allegations, the critical comparison was individual customization against production using generic foot models.

For a fabrication employee, we would examine the order alongside any patient-linked mold, model or production file they can explain. If the shop used a job ticket, material record or fabrication log, we would compare its account of the work with the finished insert’s description. These are questions about the work performed: which model was used, how the job was identified and who directed the process.

The claim supplies the other side of that comparison. The product description and billed code identify what the supplier claimed to furnish. The sale or dispensing record helps us follow that item to the provider that sought payment. Where a manufacturer sold to another supplier, the description passed between the businesses matters too. Dia-Foot’s alleged sales to other billing providers show why the inquiry can extend beyond the business that sent the claim.

An approval file can add another comparison. If an insider knows that the process described to obtain approval differed from production, we would examine both accounts with them. The Dia-Foot announcement specifically ties allegedly false information to the approvals the company advertised. The useful question is who supplied that information and how it compared with the work on the shop floor.

That is where firsthand knowledge gives the documents meaning. Someone who understands the production file can explain what its entries describe and which job they belong to. Someone in sales or billing may know how the same item acquired its custom description. We work through those connections with the people who saw them.

Who Certifies, Who Prescribes and Who Makes the Insert?

Medicare’s therapeutic-shoe framework separates the certifying physician, the prescribing practitioner and the supplier. Each role answers a different question about the patient and the footwear.

The certifying physician manages the patient’s diabetes through a comprehensive plan of care. The prescribing practitioner writes the order. The supplier furnishes the footwear.

Medicare’s therapeutic-shoe allowance covers one pair of depth shoes with three pairs of inserts in a calendar year, or one pair of custom molded shoes with two additional pairs of inserts.

The patient has a stake in that connection. As the Justice Department explained in the Dia-Foot announcement, custom inserts are prescribed to help diabetic patients prevent foot problems, including ulcers. Patients in that case allegedly expected a product made for their own feet. The clinical and supply records describe what was ordered and what the patient received. The fabrication records show the work in between.

Fitting raises its own factual question. Two former employees’ whistleblower complaint against Oxygen Plus alleged a failure at that stage:

The complaint also alleged that sales continued during periods when the company had no certified shoe fitter on staff. A fitter’s account and a fabrication employee’s account address different parts of the same product’s path to the patient.

Following Custom Insert Claims to Medicaid

The Dia-Foot allegations reached Medicaid as well as Medicare, including claims submitted by providers that bought the inserts. The payment trail therefore belongs beside the production trail: who supplied the item, who described it as custom and which program received the bill.

The HHS Office of Inspector General’s 2023 report on Medicaid fraud units, published in March 2024, recorded 60 civil settlements and judgments involving suppliers of durable medical equipment, prosthetics, orthotics and supplies. The report places medical device manufacturers and equipment suppliers among the provider types with the most civil settlements and judgments that year.

An insert sold through another provider can carry the manufacturer’s custom representation into a government payment request. We examine the product descriptions that traveled with the inserts and who knew how they had been made. The supplier relationship and the claim destination help us connect the people making the inserts to the money requested for them.

What Evidence Is Needed to Report Medicare Fraud?

For custom-insert fraud, the useful evidence connects what was made, what was represented and what was billed. Firsthand knowledge of a generic model, an off-the-shelf product or a production instruction gives us a concrete starting point. The order, product description and claim can connect that knowledge to the government’s payment request.

We also examine who controlled the custom description and who understood the fabrication process. The Dia-Foot allegations reached production, sales representations, approvals and billing. A conversation with someone who worked at one of those points can help us understand how the others connect. Fabrication staff, sales employees and billing employees may each hold a different part of that account.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Dia-Foot’s case began with a former employee. Knowledge from inside the business can put the claim’s description beside the work the business actually performed.

When You Know How the Inserts Were Made

If you know the inserts leaving production differ from the custom products being billed, speak with our whistleblower experts about the fabrication and the claims. We work alongside you to build your strongest case around those differences and bring in durable medical equipment fraud whistleblower lawyers who understand product classification and billing. From the first account of the production process through the case, we stay on your side of the table.