Diabetic Testing Supply Fraud: Free Meters, Replacement Eligibility and Repeat Claims

Diabetic testing supply fraud includes billing Medicare for ineligible glucose meters, supplies for deceased patients and orders obtained through kickbacks. In the Arriva Medical case, the government alleged that free meters and routine copay waivers helped bring in the customers, while the supplier billed Medicare. Someone in the call center heard what the customer was promised. Someone in reimbursement decided which balances disappeared. Those are different views of the same business, and an insider may know how they fit together.

How Free Meters Kept Supply Orders Coming

A meter can bring in a customer whose strips and lancets generate repeat sales. The government’s complaint against Arriva put that commercial logic in the company’s own words:

The complaint alleged that Arriva generated approximately $78.5 million in net revenue from strips and lancets in 2015, compared with approximately $2.5 million from meters. Keeping the supply customer mattered much more than collecting for the device. Sales instructions quoted in the complaint promised that customers would not receive a meter bill if Medicare denied the claim for any reason.

Separately from Arriva, the Department of Health and Human Services’ Office of Inspector General issued a fraud alert for people with diabetes describing callers pretending to represent the government, Medicare or a diabetes association. They offered free meters, strips or lancets in exchange for Medicare or financial information. The items still went onto Medicare bills. For an insider, the connection is between the offer made on the telephone and the claim that followed it.

Copay Waivers Were Part of the Sales Operation

The government alleged that Arriva, with parent company Alere’s approval, used free meters and routine copay waivers as kickbacks to Medicare beneficiaries. The alleged inducement reached both the meter and the continuing supply business.

The complaint described a different collection policy depending on who paid. A customer responsible for the entire bill could lose service for failing to pay. A customer whose supplies Medicare paid for would not be canceled for a billing reason. It also alleged that Arriva erased small copay balances before sending an invoice or allowing charges from later orders to accumulate. A collection policy could keep the sale going just as effectively as a sales script.

The outside billing function mattered, too. In its resolution with Grapevine Billing and Consulting Services, the Justice Department alleged that the firm’s reimbursement consultant effectively headed Arriva’s reimbursement department, developed copay collection policies and submitted claims on its behalf.

In sworn testimony described in the announcement, the consultant admitted directing customer copay write-offs, doing so probably every week, making mass write-offs of Medicare denials for ineligible meters and creating copay adjustments in response to customer complaints. The sales promise had an accounting policy behind it.

A parallel appears in the allegations against Pentec Health, which supplied nutrition therapies. In the whistleblower’s complaint, an employee alleged that sales staff promised patients no out-of-pocket expense. She also alleged that patient balances sent to another employee for collection instead disappeared as financial-hardship adjustments. The shared question for an insider is who authorized the write-off and what the customer had been told before the order.

Medicare Glucose Meter Replacement Within Five Years at Arriva

The government alleged that Arriva billed Medicare for meters for patients who had already received a Medicare-paid meter within the previous five years. The Justice Department’s account included repeat claims for existing patients whose earlier meters Arriva had billed.

The complaint quoted a sales supervisor who expected Medicare to deny a premature replacement. The instruction was to submit it anyway:

The instruction left Medicare’s denial system to do the eligibility checking. The complaint also quoted instructions to send a meter with every new start order, even when the patient said they did not want one.

Repeat Strip Orders Need Their Own Support

Strip quantity, refill requests and delivery records raise different questions from meter replacement. An order can specify how much to ship while the clinical record fails to support that amount. A later shipment can also arrive before the patient has used the earlier supplies.

A February 2011 inspector general audit of Jurisdiction B claims makes those distinctions concrete. The report described Medicare’s utilization guidelines as up to 100 test strips and 100 lancets every month for insulin-treated patients and every three months for patients not treated with insulin. Claims above those quantities needed medical records supporting the extra supplies.

Reviewing a sample of 100 high-utilization claims from calendar year 2007, auditors found 83 with one or more documentation deficiencies. The problems included unsupported extra quantities, missing refill support, incomplete or absent physician orders, and missing proof of delivery.

In one example, a supplier prepared a preprinted order that a physician signed for testing six times a day. The patient’s medical records did not explain the need for the extra supplies.

The audit also found that Medicare paid different suppliers for strips and lancets for the same beneficiary over overlapping periods. Elsewhere, suppliers lacked records showing that the beneficiary or caregiver had requested the refill. Delivery records presented another problem: some suppliers produced dispensing-system printouts that did not correspond to the claims being reviewed.

The Centers for Medicare & Medicaid Services’ standard documentation requirements put the refill request and its documentation before shipment. We help supplier employees connect the refill request, the quantity shipped, the delivery and the claim.

When the Account Said the Patient Had Died

The government alleged that Arriva submitted claims for supplies for deceased beneficiaries. One example in its complaint showed why the company’s own account history mattered: an eligibility check identified a patient as deceased, yet Arriva shipped supplies and billed Medicare seven weeks after that check.

That sequence puts more than the death date in view. It connects information already inside the business to a later shipment and claim. The account had been checked. According to the complaint, the result did not stop the order.

The Justice Department reported that Medicare revoked Arriva’s supplier number in November 2016 for billing on behalf of deceased beneficiaries. The billing record, eligibility response and fulfillment history each describe a different part of how those claims reached Medicare.

What Evidence Is Needed to Report Medicare Fraud?

For diabetic testing supplies, useful evidence connects the sales promise, the patient’s account, the order, the delivery and the Medicare claim. An insider may recognize the instructions that kept meters shipping, the adjustment codes that cleared copays or the account notes showing what staff knew before a claim went out.

The Arriva complaint supplies unusually concrete examples. It quoted an employee’s note tying financial-assistance approval to using Arriva exclusively. It alleged that financial-assistance forms served as a pretext for waiving copays when a customer simply did not want to pay. The form’s stated purpose and the reason staff actually used it were different.

This is where the divisions inside a healthcare supplier matter. Sales staff may know the offer. Reimbursement staff may know the denial and write-off policy. Fulfillment and billing records connect those decisions to the supplies and the money. We work with you to connect the part you know to the rest of the transaction.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Arriva case began with a former call-center employee, and the United States joined the case.

Arriva and Alere agreed to pay $160 million in August 2021. The Justice Department said the whistleblower would receive approximately $28.5 million as his share of the recovery.

The resolutions also reached the people who ran the business and its reimbursement operation. Arriva’s founders paid $1 million in 2019 to resolve allegations that they participated in the kickback scheme. In February 2022, the reimbursement consultant and Grapevine agreed to pay $50,000 to resolve the allegations against them. The alleged policy was set above the billing desk.

Civil health care enforcement reaches suppliers beyond Medicare, too. The inspector general’s Medicaid Fraud Control Units Fiscal Year 2023 Annual Report, published in 2024, found that medical-device manufacturers and durable medical equipment suppliers accounted for more civil settlements and judgments than other provider types that year.

You Know What the Customer Was Promised

If you work in a diabetic-supply call center, reimbursement department or billing operation and know how a free offer became a Medicare claim, talk to our whistleblower experts about what happened inside the business. We work beside you to build your strongest diabetic testing supply whistleblower case, connecting the sales promises to the orders, adjustments and claims. We bring in Medicare fraud whistleblower lawyers who understand supplier billing and stay with you through the case.