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Florida Diabetic Shoe Company Pays $5.5 Million To Resolve False Claims Act Allegations

Diabetes is a disease that involves either the body’s inability to produce insulin or trouble using the insulin it produces. Insulin is a hormone created by your pancreas. It regulates the amount of glucose (or sugar) in the blood. According to the American Diabetes Association, “in 2018, 34.2 million Americans, or 10.5% of the population, had diabetes.” Needless to say, there are a lot of people susceptible to this disease.

Sadly, to a Wellington, Florida-based shoe company, the high number of Americans with diabetes was seen as an opportunity. As reported by the Southern District of Florida branch of the United States Department of Justice yesterday, Foot Care Store, Inc. has agreed to pay more than $5.5 million to resolve False Claims Act allegations regarding diabetic shoes.

Dia-Foot misrepresented their shoe inserts.

Doing business as Dia-Foot, the diabetic shoe company is alleged to have sold custom diabetic shoe inserts that were not actually custom-fabricated in accordance with Medicare standards. As the DoJ report details, between 2013 and 2018, Dia-Foot sold diabetic shoe inserts to customers nationwide. The company asserted that the inserts were each custom-made for specific individuals’ feet.

In truth, the inserts were made using generic food models, providing no specific treatment or comfort to each recipient. Meanwhile, the inserts were distributed to diabetic patients who had prescriptions from health care providers. They all believed they were receiving custom-made products for their unique ailments.

“According to the government, despite fabricating the inserts using generic models, Dia-Foot billed Medicare and Medicaid for the custom version, or sold the inserts to other providers who then billed government health care programs for custom inserts,” reports the DoJ, “This allowed Dia-Foot to produce and sell more inserts and increase profits by cutting corners.”

Dia-Foot claimed to be Medicare-compliant.

In addition, the United States alleges that Dia-Foot advertised to customers that it was proud to be Medicare-compliant. The company also claimed to have received Medicare approval for its custom diabetic shoe inserts. In actuality, Dia-Foot had received Medicare approvals based on false information.

“Individuals with diabetes can in some cases suffer from foot problems, including nerve damage, ulcers, and poor circulation,” informs the DoJ, “In severe cases, untreated problems can even lead to amputation. Foot orthotics such as custom shoe inserts are prescribed to help diabetic patients prevent such problems and are covered by Medicare and Medicaid.”

Robert Gaynor is Dia-Foot’s President and CEO.

In addition to the settlement totaling $5,538,338, Gaynor 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 requires, among other things, that Dia-Foot implement updated policies and procedures as part of its compliance program. They must also hire an Independent Review Organization to review quarterly Dia-Foot’s claims to Medicare and Medicaid.

“The allegations were brought under the qui tam or whistleblower provisions of the False Claims Act by a former Dia-Foot employee,” reveals the DoJ report, “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.”

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