What Does the CMS DMEPOS Fraud Crackdown Mean for Podiatry Billing?
As of September 2026, CMS has barred 11 durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) companies from receiving Medicare Advantage and Part D payments after identifying more than $3.4 billion in suspected fraudulent billing during 2025 and 2026. For podiatry practices that regularly order orthotics, therapeutic shoes, and wound care supplies through DMEPOS channels, this enforcement action signals a compliance environment that is tightening across every provider type that touches DME ordering and documentation.
Who is affected:
Any podiatry practice that orders, prescribes, or bills for DMEPOS items, including custom orthotics, therapeutic shoes, ankle-foot orthoses, and wound care products billed under L-codes or A-codes.
What triggered this:
CMS identified suppliers that had no claims before 2025, used improper billing practices, billed for deceased beneficiaries, and supplied equipment that patients never requested or received.
What to do now:
Verify every DME supplier your practice works with, confirm each supplier’s active Medicare enrollment status, and ensure your ordering documentation meets your MAC’s LCD requirements for every DMEPOS item you prescribe.
What CMS Announced on September 8
On September 8, 2026, CMS placed 11 DMEPOS suppliers on the Medicare Preclusion List. The Preclusion List is an administrative enforcement tool that blocks Medicare Advantage and Part D plans from paying the listed companies going forward. According to the CMS press release, these 11 companies collectively billed more than $3.4 billion in 2025 and 2026 alone. CMS linked the companies to four specific patterns: none of them had submitted any claims before 2025, all of them used billing practices that CMS classified as improper, all of them billed for equipment delivered to beneficiaries who were already deceased, and all of them supplied equipment to beneficiaries who never asked for it and never received it.
Four of the barred companies had already been revoked from Original Medicare but pivoted to billing Medicare Advantage plans instead. CMS Administrator Dr. Mehmet Oz stated that operators exploiting recently deceased beneficiaries represent conduct the agency will not tolerate. The action came just 12 days after the expiration of a six-month DMEPOS enrollment moratorium that CMS said had prevented $1.5 billion in fraudulent bills during its active period from February through August 2026.
This is not an isolated action. In August 2026, the HHS Office of Inspector General published a white paper titled Fraud, Waste, and Abuse Related to Durable Medical Equipment in Medicare, which found that current enrollment safeguards, including surety bonds and fingerprint-based background checks, have not prevented bad actors from becoming Medicare-enrolled DMEPOS suppliers. The OIG called for strengthened on-site inspections, improved detection of unreported ownership changes, and increased oversight of newly enrolled suppliers.
Which Podiatry Services Involve DMEPOS Billing?
DMEPOS billing touches a wider range of podiatry services than many practice managers realize. Any time a podiatrist prescribes, orders, or refers a patient for a device, supply, or product that falls under the DMEPOS category, the practice creates a documentation trail that CMS and its MACs can audit.
The most common DMEPOS items in podiatry billing include custom foot orthotics billed under L-codes (L3000 through L3030), therapeutic shoes and inserts for diabetic patients billed under A5500 through A5513, ankle-foot orthoses billed under L1900 series codes, wound care supplies including skin substitutes and surgical dressings, and pneumatic walking boots or other post-surgical devices. Each of these categories carries its own LCD coverage criteria, documentation requirements, and frequency limits that vary by MAC jurisdiction.
In our experience matching providers with billing partners, DME-related documentation is one of the areas where practices lose the most revenue to preventable denials. The ordering process requires a face-to-face encounter, a written order signed and dated before delivery, a detailed description of the item, medical necessity documentation tied to a covered diagnosis, and proof that the supplier delivered the correct item. When any one of those elements is missing or incomplete, the claim is at risk.
Why Podiatry Faces Elevated DME Audit Risk
Podiatry is already under heightened scrutiny from CMS and the OIG. In December 2025, the OIG completed two audits of Medicare Part B payments to podiatrists. The first audit (A-09-22-03011) examined routine foot care claims and found that nearly half of the sampled claims did not comply with Medicare requirements. The second audit (A-09-22-03012) reviewed podiatry evaluation and management claims and found that 44 out of 100 sampled E/M claims failed to meet Medicare standards, translating to an estimated $39.6 million in improper payments during the audit period.
CMS concurred with the OIG’s recommendations and stated it would forward them to the MACs for action. That action is now materializing. MACs are increasing their audit focus on podiatry claims, and the DMEPOS fraud crackdown adds another layer. If your practice orders DME items from suppliers that have compliance problems of their own, your claims could be flagged as part of a broader pattern review, even if your documentation is clean.
The risk compounds when you consider the volume. According to the CMS DMEPOS supplier data, therapeutic shoe claims for diabetic patients and custom orthotic claims are among the highest-dollar DMEPOS categories in podiatry. A single practice billing 20 to 30 therapeutic shoe claims per month generates enough volume to trigger automated pattern detection if the supplier, documentation, or coding falls outside expected norms.
| Enforcement Area | Before 2026 | Current Environment (September 2026) |
|---|---|---|
| DMEPOS supplier enrollment | Surety bond and background check required | OIG calls existing safeguards insufficient; CMS using advanced data analytics to identify suspect suppliers |
| Enrollment moratorium | No moratorium in effect | 6-month moratorium ran Feb-Aug 2026; prevented $1.5B in fraud; post-moratorium enforcement continues |
| Podiatry E/M claims | Standard MAC audit cycles | OIG found 44% non-compliance; CMS directing MACs to increase oversight |
| Preclusion List actions | Used primarily for Original Medicare | Now extended to bar suppliers from Medicare Advantage and Part D |
| Skin substitute billing | Product-specific pricing | Flat rate of $127.28/sq cm; CMS FDOC stopped $185M in improper skin substitute payments in 2025 |
How Should Podiatry Practices Verify Their DME Suppliers?
The most immediate action step from this crackdown is supplier verification. CMS’s own analysis showed that four of the 11 barred companies had already been revoked from Original Medicare and simply started billing Medicare Advantage instead. That means a supplier could appear active in one program while being flagged or revoked in another.
Providers often come to us after discovering their DME supplier had a compliance issue they were never aware of. The problem is that most practices check supplier status once, during initial setup, and never recheck. But supplier enrollment status changes. Ownership changes. Compliance actions happen.
To verify a supplier, start with the Medicare Supplier Directory through the CMS PECOS system. Confirm the supplier has an active enrollment status, a valid National Supplier Clearinghouse number, and a current surety bond. Cross-reference the supplier against the OIG’s List of Excluded Individuals and Entities (LEIE) and the CMS Preclusion List. If the supplier appears on either list, stop ordering immediately. For practices that outsource billing, confirm with your billing company that they have a supplier verification protocol built into their workflow and that it runs at least quarterly.
If your podiatry practice bills for orthotics, therapeutic shoes, or wound care supplies, the billing company handling those claims needs to know the current DMEPOS compliance requirements inside and out.
Podiatry Bill Co connects you with billing partners who specialize in podiatry documentation and DME compliance, with rates starting as low as 2.95%.
Steps to Protect Your Practice from DME Billing Exposure
Podiatry practices that order or prescribe DMEPOS items should complete each of the following steps before the end of Q3 2026 to reduce exposure as CMS enforcement escalates.
- Verify every active DME supplier’s enrollment status through PECOS and cross-check against the OIG LEIE and CMS Preclusion List.
- Confirm that each DME order includes a signed, dated written order prior to delivery with a detailed item description and covered diagnosis.
- Audit your therapeutic shoe billing to ensure every claim includes the required certifying physician statement documenting the diabetic condition and medical necessity.
- Review your orthotic claims for correct L-code selection, supporting documentation of the face-to-face encounter, and proof of medical necessity tied to a specific functional limitation.
- Check that wound care supply claims match your MAC’s LCD for covered products, proper units, and frequency limits.
- Set a quarterly schedule for rechecking supplier enrollment status so ownership or compliance changes do not go undetected.
- Train front-office and billing staff on the updated CMS DMEPOS documentation standards and the consequences of ordering from non-enrolled or excluded suppliers.
Common DME Documentation Mistakes in Podiatry
The most common issue we see providers run into with DME billing is treating the written order as a formality rather than a compliance requirement. CMS requires a detailed written order that is signed and dated by the ordering physician before the item is delivered. The order must specify the item, the quantity, the diagnosis supporting medical necessity, and the expected duration of need. A generic order that says ‘orthotics as needed’ does not meet this standard.
Therapeutic shoe claims carry their own documentation trap. Medicare requires a certifying physician statement from the treating physician confirming the diabetic condition and the medical necessity of the shoes and inserts. The certifying statement must be a separate document from the order. Practices that combine the certification and the order into a single form risk a denial because the MAC cannot distinguish the certification from the order.
Another pattern that triggers audits is ordering DME items from a supplier that shares ownership or financial relationships with the ordering practice without proper disclosure. CMS tracks supplier-to-provider referral patterns using advanced data analytics. If your practice consistently orders from one supplier and that supplier’s billing volume spikes after your referrals begin, both the supplier and the practice can expect a closer look. The billing companies we vet through our platform flag these referral patterns during onboarding so practices can address them before they become audit triggers.
Frequently Asked Questions
The September 2026 action targeted DME suppliers, not ordering physicians. However, podiatry practices that order from barred or excluded suppliers risk claim denials, recoupment demands, and potential fraud referrals. CMS holds ordering providers responsible for verifying supplier enrollment status before referring patients.
CMS publishes the Preclusion List through the Medicare Advantage and Part D programs. Providers can access it through the CMS website or by contacting their Medicare Advantage plan directly. Cross-reference the supplier’s National Provider Identifier against the OIG LEIE at oig.hhs.gov/exclusions for additional verification.
Claims submitted before the supplier was placed on the Preclusion List are generally not retroactively denied solely because the supplier was later barred. However, if an audit reveals that the claims themselves lacked proper documentation, those claims remain at risk regardless of the supplier’s current status.
Yes. Therapeutic shoes for diabetic patients (A5500 through A5513) require a certifying physician statement, a written order prior to delivery, and documentation linking the footwear to the diabetic diagnosis. Missing any one of these elements results in a denial and can trigger a broader review of the practice’s DME claims.
Outsourcing to a billing company that specializes in podiatry can reduce DME audit risk because specialized coders understand the LCD requirements for each MAC jurisdiction and can flag documentation gaps before claims are submitted. The billing company does not remove the ordering provider’s compliance responsibility, but it adds a layer of review.
CMS does not mandate a specific verification frequency for ordering providers, but industry best practice is quarterly. Supplier ownership changes, compliance actions, and enrollment revocations can happen at any time, and a quarterly check is the minimum frequency needed to catch changes before they result in denied claims.
Next Steps
- Start by verifying every DME supplier your practice currently orders from. If you need to review how podiatry billing compliance connects to your quality reporting obligations, that guide covers the MIPS Value Pathway requirements for podiatry in 2026.
- For practices that are also tracking the 2027 Medicare fee schedule changes for podiatry, the reimbursement and compliance pressures are converging. Getting DME documentation right now protects revenue before the 2027 payment cuts take effect.
- If your billing team is not equipped to handle the current compliance environment, a specialized podiatry billing company can close the gaps.
Podiatry Bill Co matches your practice with billing companies that handle podiatry DME documentation, LCD compliance, and denial management.
The matching is free, takes about 30 minutes, and covers all 50 states, with billing rates starting as low as 2.95%.
