Power Wheelchairs for Seniors: Scooter Store's Pursuit of Medicare Benefit Opens Door to Fraud ($19 Million+)

Taxes should be less, not more, right? It seems like most people, as we approach April 15th, especially, agree with this.  It would also make sense that we would always want to save the government money on any programs, to help make our tax dollars go further.  But as we know, there are those who are looking to profit handsomely from any government program that will allow them to do so. The new healthcare law has been effective in cracking down on Medicare fraud and now it seems The Scooter Store could be the next company to go away, after selling seniors wheelchairs they could not use, did not want or need. So much for trying to save the government money, right? And they took advantage to the tune of $100 million in overcharges. Medicare reimbursements for power wheelchairs increased by more than 350% after The Scooter Store came along.  Scooter Store employees are now sharing stories of how the company color-coded doctors to indicate which doctors would approve of a "power wheelchair" for medical need, paid for by Medicare or Medicaid.

Medicare reimburses seniors for the purchase of a "power wheelchair" when a medical doctor has approved the need for the power wheelchair.  The reimbursement to medical supply companies was generous - so much so that some medical supply companies would call the home care agency I owned for 7 years and offer us $200 for each power wheelchair referral.  They received upwards of $2,000 for the sale of each power wheelchair from Medicare.

However, in 2011, Medicare finally changed the power wheelchair reimbursement to match the payment format for regular non-power wheelchairs which was a monthly rental fee.

A funny thing then happened at The Scooter Store when they were faced with "normal" profit margins.  Cash flow became tight, layoffs began and the push to gain medical doctor "approval" by going from doctor to doctor to doctor began. Former employees say they were urged to go to another more "friendly" doctor and to reach out to as many as 3 doctors if the first medical doctor declined approval for the wheelchairs.

This is why The Scooter Store would purchase television advertisements and announce to seniors that they could keep their wheelchair if it turns out they did not meet Medicare approval.  The Scooter Store scooted off to find wheelchair manufacturers who would go to China to produce wheelchairs for a very low cost and then of course they also helped facilitate the medical doctor "approval" of the wheelchairs.  A whistle-blower at the company took advantage of the government's whistle-blower protection program and shared that The Scooter Store sort of had their own medical doctor network who would approve of the need for the wheelchair. 

Here is the good and bad news.  If you truly do need a power wheelchair, for sure both you and your doctor know this.  It is simple.  You have difficulty with mobility and walking.  If a company needs to buy advertisements on television to convince you that you need a "scooter", which by the way, they can get for you for free from Medicare, well, there is probably "all kinds of wrong" with this, as my Grandmother would say.  A private company is trying to take advantage of a government program and profit at a much higher percentage than they would if truly operating as a private company with out a juicy government payment.  The fact that The Scooter Store could not operate a profitable company once Medicare reimbursements changed in 2011 speaks for itself.  Many, many other power wheelchair companies operate fairly and are profitable and were not impacted by the change in reimbursement from a lump sum to a monthly payment as it also is profitable reimbursement level.

The reality of needing a power wheelchair also comes with the fact that you will need assistance in customizing the wheelchair to fit your height, weight and arm and hand movement capabilities.  What if you also have arthritis?  This means that the medical equipment company fitting you for the wheelchair truly has some work to do to make sure the wheelchair is customized to fit both you and your home.  Then they also need to train you on how to properly use the wheelchair safely.  This is worth having Medicare pay them a fair price for their labor and is why the reimbursements may sound a bit generous to those who don't understand all the customization that is necessary.

A quality medical equipment company will also come to the home as much as is necessary in order to make sure the senior's wheelchair fits them properly and that all the necessary adjustments have been made.

Ordering a wheelchair that is really a "scooter" from a television ad takes away the customization.  In addition, promoting taking advantage of the power wheelchair benefit for use as a "scooter" just because you might want to get around a bit quicker is taking advantage of a program that was set-up to benefit those who truly cannot walk easily.  Used golf-carts might be a better solution for the senior who just wants a scooter to tool around the neighborhood in.

Medicare changed the definition of power wheelchairs precisely because of The Scooter Store.  Even if The Scooter Store's wheelchairs were high quality, it still cost taxpayers a huge amount of money by pocketing the profits from a program that was meant for seniors who truly needed a power wheelchair.

The Scooter Store settled with the government after the whistle-blower case for around $4 million and you may review this case with the Department of Justice here.

And now it seems The Scooter Store has been excluded from a list of 800 companies awarded contracts to supply medical equipment to Medicaid and Medicare beneficiaries beginning July 1, 2013.  In February, 2013, law enforcement officers raided The Scooter Store's Texas headquarters as part of an investigation in alleged fraud.  The Scooter Store founder, Doug Harrison, did step down from his role as CEO in 2011 and while many of us are trying to save the government money, he has in the past been a bit bummed out that the government was being more efficient about reimbursements, as you can see in this news release, when he complained that the government would no longer reimburse for wheelchairs at 6x's their wholesale price.............most retailers, by the way, are happy with 100% mark-ups.

Timothy Menke with the Office of the Inspector General says the investigation involves his agency, plus the Department of Justice, the FBI and the Texas attorney general's Medicaid fraud unit, according to The Associated Press.  

In 2012, an independent auditor determined that the company over-billed Medicare between $46.8 million and $87.7 million, the Express-News reported. The company agreed to repay $19.5 million after the Office of the Inspector General threatened to exclude it from federal health care programs.

We wonder if the U.S. Government will take one more step and hold accountable Mr. Harrison, the founder of The Scooter Store, as well.  Just as the Enron executives were held accountable for their actions.

The U.S. government had to create specific definitions about how a power wheelchair is not a scooter because of The Scooter Store trying to capitalize on the power wheelchair reimbursement from Medicare:

"By representing to physicians that their patients wanted and needed power wheelchairs, The SCOOTER Store obtained thousands of “Certificates of Medical Necessity” from physicians who did not know about the company’s fraudulent practices. The SCOOTER Store then billed government and private health care insurers for power wheelchairs, which were far more costly than power scooters, and collected millions of Medicare and Medicaid dollars.

The SCOOTER Store received $5,000 to $7,000 in reimbursement for each power wheelchair it sold, more than twice the amount for a scooter, which sold for around $1,500 to $2,000. Many beneficiaries had no idea what kind of equipment they were getting, until it was delivered by The SCOOTER Store.

The government’s lawsuit also alleged that The SCOOTER Store knowingly sold used power mobility equipment to beneficiaries and billed Medicare as if the equipment were new, in violation of Medicare regulations. In addition, the U.S. alleged that The SCOOTER Store charged Medicare millions for unnecessary power mobility accessories."

 Note:  The Scooter Store spent $1 million + lobbying Congress to maintain the previous Medicare reimbursements for wheelchairs.

 

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