January 24, 2013

Scooter Store Caught Cheating the Government Out of Millions

By Marlene Koury

It seems like such a wholesome company.  They have those nice commercials where elderly folks are scooting to and fro on their power-mobility devices.  It would seem that only an honest and trustworthy company would dedicate itself to caring for the needs of the elderly in this way.  But, according to an independent auditor, The Scooter Store – the purveyor of these fine commercials and the nation’s largest supplier of these power wheelchairs – duped the government out of tens of millions of dollars for paying for these elder-scooters when they were not medically necessary.  And the worst part is that the independent auditor that unearthed this fraud was auditing the company as part of a corporate integrity agreement that the government required because five years ago the company had been caught doing the exact same thing.

According to the audit, The Scooter Store received up to $87 million dollars in Medicare overpayments over the last several years for causing doctors to write prescriptions for these power wheelchairs that were not medically necessary.  Apparently, The Scooter Store is not alone in this activity.  Many of its competitors have behaved similarly in facilitating these types of overpayments.  Indeed, a 2011 report released by the Department of Health and Human Services said that an astounding 80 percent of power wheelchair claims did not meet Medicare’s coverage requirements.  Click here for the report.

Unsurprisingly, The Scooter Store disputed the $87 million dollar figure, but it ultimately agreed to repay the government $19.5 million dollars.  It did so, however, only after the Office of Inspector General threatened to exclude them from Medicare and other federal healthcare programs.  This would be a “death sentence” for a company such as The Scooter Store that relies so heavily on government reimbursement for the sale of its product. 

While the close to $20 million payment was certainly a hefty fine, many have complained that it represented such a small fraction of the amount allegedly received in overpayments.  Senators Richard Blumenthal (D-Conn) and Herb Kohl (D-Wis.) were particularly bothered by this disparity.  They sent a letter last month to the Centers for Medicare and Medicaid Services (CMS), demanding to know why they accepted what they considered to be a relatively paltry amount compared to what they overpaid.  They also wanted to know why it took the threat of exclusion from Medicare to get the company to pay.  CMS has yet to answer the letter.   And the OIG merely indicated that they were satisfied with the settlement because the CMS was satisfied.  

The failure to report and repay any overpayments may have put The Scooter Store in breach of its 2007 corporate integrity agreement.  That agreement requires that the company report and repay any overpayments within 30 days of identification.  Given the company’s recidivist activity here, some are wondering whether corporate integrity agreements serve any purpose at all.  The sentiment was articulated quite pointedly by Patrick Burns, a spokesman from Taxpayers Against Fraud in Washington.  He expressed significant disappointment that the government did not demand full repayment of the overcharges, stating that “[a]t some point, a corporate integrity agreement has to be more useful than birdcage liner — otherwise they need to print them on softer paper….”

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If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.