The right shoe can help prevent diabetic foot ulcerations and boost qualified providers' bottom line.
by Greg Thompson

It's been 16 years since Congress passed the Medicare
Therapeutic Shoe Bill. In that time, home care providers have
helped a lot of seniors and made a profit, a win-win in today's
battered HME market.

According to Michael Barr, vice president and co-owner of
OrthoFeet, Northvale, N.J., although there is a tough and
time-consuming service component involved, the margin on diabetic
patients can add up.

With the demand for diabetic footwear showing no signs of
slowing, it is not too late to get involved. To recap the basics,
Medicare covers the yearly cost of one pair of therapeutic shoes
(also called diabetic shoes) and three inserts. As long as
documentation of medical necessity is there, CMS pays the full fee
in hopes that patients will avoid even more costly complications or
amputations. CMS does not consider therapeutic shoes for diabetics
to be DME or orthotics, but instead the footwear falls under a
separate category of coverage under Medicare Part B.

While shoes must be prescribed by primary care physicians,
podiatrists or other qualified doctors, they must be provided by an
orthotist, prosthetist, pedorthist, certified fitter or other
qualified individual (check with your Medicare DME MAC for specific
definitions). Providers looking to expand their business and
capitalize on this opportunity must ultimately get certified, or
hire someone who is.

Despite all those years on the books, many diabetic patients
still don't know about the Medicare shoe program, which started as
a Medicare-only proposition before expanding to include some
insurance companies and HMOs that are providing similar deals for
younger patients. With the help of the media, and better
communication from clinicians, awareness will likely increase.

From a demographic perspective, the market for diabetic shoes
will grow based on pure need. The American Diabetes Association
reports that there are 23.6 million diabetics in the United States,
or roughly 8 percent of the population. Total cases went up 13.5
percent from 2005 to 2007, and Americans still receive
approximately 80,000 diabetes-related amputations per year.

Despite the undeniable demographics and reasonable profit, some
providers are still hesitant to dive in. After all, the clinical
stakes are high. The American Podiatric Medical Association
estimates that poorly fitted shoes account for as many as half of
the problems that lead to amputations.

“In the shoe business, we have to admit that there is a
big responsibility, especially if you compare it to a cane or so
many other things,” says Barr. “You have to put
something on the foot that will make a difference. It is not for
nothing that Medicare is asking for some certification, education,
knowledge and training before they allow you to implement this
treatment … This is real treatment, and it takes

For providers looking to profit in the long term, Barr is
adamant that shoe quality must be considered first above all.
“For the short term, you can look for the least expensive
shoe that will give you the best profit, because the reimbursement
does not look at what your cost is,” says Barr.

“Looking at the long-term health of your business, you
must look at the quality of the shoe. For example, the lining of
the shoe must be as seamless as possible. It's like you are putting
your hand in a glove, with no irritation or pressure

Gladys Fournet, owner of Fournet's Pharmacy & Professional
Home Medical in Franklin, La., carries several different brands of
diabetic shoes. After taking the classes and putting in the hours,
Fournet became a certified fitter and certified orthotist,
distinctions that Medicare has deemed necessary to be in the shoe

In addition to operating a full-service pharmacy, Fournet also
carries oxygen, hospital beds, power chairs, scooters and a full
selection of DME.

“If the shoe business was stand-alone, it would make
money,” says Fournet. “But we service the whole
patient, and the shoe business is only a fraction of what we do. A
pharmacy without HME is on its way out, and an HME without a
pharmacy is on its way out.”

Cultivating referrals from a variety of clinicians yields
reimbursement mostly from Medicare but also Louisiana Medicaid and
private insurance. All these payers require certification, and
Fournet believes this is often the main barrier for HME providers
who wish to enter the market.

“Some HME providers want the fast buck, and they are not
thinking of service and caring for people,” laments Fournet.
“This is not an easy product to distribute. It takes a
certified person. It takes patience, inventory, and you have to be
trained to fit the shoe.”

With real clinical consequences for poor fitting, the service
component is sizable. When a shoe customer comes in, Fournet
immediately stops what she is doing to fit the patient. If
follow-up is necessary two or even more days later, she is there
for the customer.

“If you are trained and you are certified, this business
is very profitable, but it is not a fast buck thing,” says
Fournet, whose company includes three locations serving a 40-mile
radius of Louisiana's Cajun Coast. “It is a great
patient-builder. It ensures patient loyalty to your pharmacy and to
your business.”

Beyond Diabetes

Orthopedic footwear, which includes inserts, arches and
orthotics, can also be useful for patients without diabetes.

“The diabetic part is only a small part of the business
that HME companies could participate in when it comes to pedorthics
and/or foot care,” says Jonathan Fogg, CPed, national sales
manager for Cleveland-based Acor Orthopaedic. “There are
millions of patients out there with foot problems.”

One overlooked challenge often stems from the user's familiarity
with shoes, a product that everyone has experience with. Framing
shoes as medical devices can help, but ultimately everyone has an
opinion about footwear.

Fogg cautions that without the proper training, education and
manufacturer support, patients will inevitably end up telling you
what they want.

“Can you imagine somebody walking into a pharmacy with a
prescription for pills, and then telling you what pills they
want?” he asks. “But they will walk in with an opinion
on therapeutic footwear.

“Patients need to know that shoes are medical devices, and
they should work in conjunction with providers to select the right
medical device — and this is based on the prescription
provided by the doctor — usually a podiatrist.”

Fogg says qualified providers who enter the market will likely
benefit from solid demand for the foreseeable future. When
providers become qualified to provide diabetic shoes, they can
easily turn their hand to many other foot conditions. While
diabetes is certainly prevalent, 80 percent of patients who come in
are not diabetic, and some of them are willing to pay cash for
effective foot solutions.

The bottom line, emphasizes Fogg, is that if you have the right
qualified person in your business, you can generate profit from
more than just the Medicare therapeutic shoe segment.

“For HMEs to narrow their focus to just the diabetic
aspect of footwear is wasting a well-trained individual,”
says Fogg. “There is a reason why television is full of
infomercials for people who have hurt feet and need orthotics. The
demand out there is vast, and the additional demands from people
who are not diabetic exists, and in some ways it is an undiscovered

“It all depends on making the investment to get the right
person trained,” he says. “When you do that, your
horizon needs to be broader than just what you can do under the
Medicare shoe bill.”

Fogg points out that many providers are concerned that the
educational pathway may be too difficult, and some question the
long-term prospects of the business model. Picking the right
manufacturer can also be daunting. Whichever manufacturer you
choose, Fogg believes providers should look for the customer
support that encourages expansion to all areas of pedorthics, with
a full range of training and products.

Questions to ask include “Is your vendor going to be a
partner?” and “Where can they take you two to four
years down the road?”

“I am looking for an opportunity to build your company
brand,” says Fogg. “Our products may ultimately form a
small part of your business, but we want it to be good.”

Experts Interviewed

Michael Barr, vice president and co-owner, OrthoFeet, Northvale,
N.J.; Jane Bunch, president and CEO, Jane's Healthcare Consulting,
Marietta, Ga.; Jonathan Fogg, CPed, national sales manager, Acor
Orthopaedic, Cleveland; Gladys Fournet, owner, Fournet's Pharmacy
& Professional Home Medical, Franklin, La.

Watch Those Modifiers

“With the growing number of diabetic patients in the U.S.,
the diabetic shoe business is growing by leaps and bounds,”
notes Jane Bunch, CEO/president of Jane's Healthcare Consulting.
“But, please be cautioned that this is a highly audited item
due to the ‘KX’ modifier and the fraud and abuse in the
past in this category.”

However, the billing expert points out, “If you go into
this business correctly, it can be a great addition to your
existing business. You will need a certified fitter or someone
qualified to perform the fitting of the shoes and inserts on staff.
If you reside in a licensure state for O&P, be sure you have
that state license as well upon adding this business. Be cautious,
train your staff on how to bill the products, ensure you have all
of the required documentation per policy and this will be a great
service to your customers — and a great addition to your
business model.”

Providers can be successful and make a profit, Bunch says, if
they make certain “that billing is performed promptly and
correctly the first time, and spend the time required to properly
fit the patient right the first time.”