WASHINGTON--The Scooter Store will pay the government $4 million
and give up millions more in reimbursement for pending claims to
settle fraud allegations, the Department of Justice said in a
statement issued May 11.

Along with the cash payment, the New Braunfels, Texas-based
provider will give up reimbursement for pending Medicare claims
totaling more than $43 million, but Medicare estimates that
payments based on those claims would actually have been $13

The settlement includes a $500,000 contribution by The Scooter
Store founder and CEO Doug Harrison, who the DOJ said agreed to
forego dividends from his shares in the company for the next year
in exchange for a release of his personal liability.

In addition, for the next five years the company will operate
under a corporate integrity agreement with the HHS Office of
Inspector General.

The settlement resolves a 2005 government lawsuit alleging the
company "engaged in a multi-media advertising campaign to entice
beneficiaries to get power scooters paid for by Medicare, Medicaid
and other insurers. Instead of the 'zippy' power scooters that were
advertised, The Scooter Store sold the beneficiaries expensive
power wheelchairs that they did not want, need, and/or could not

"Many beneficiaries had no idea what kind of equipment they were
getting, until it was delivered by The Scooter Store," according to
the DOJ.

In addition, the government's lawsuit alleged the company sold
used power mobility equipment to beneficiaries and billed Medicare
as if the equipment were new, and alleged the company charged
Medicare millions for unnecessary power mobility accessories.

The settlement also resolves several lawsuits filed by The
Scooter Store alleging that Medicare unfairly denied claims it had
submitted with valid certificates of medical necessity.

In a company statement, however, The Scooter Store said it
relinquished its right to collect Medicare reimbursements for
certain power wheelchairs and scooters, "which the company
maintains were properly delivered to qualified Medicare

"Unfortunately, the unstated policy of this government is to
limit costs to the Medicare program and do whatever it can to
curtail access to power wheelchairs and scooters," The Scooter
Store's Harrison said. "Our company got caught in the middle. We
did nothing wrong."

The DOJ said the settlement also resolves claims in a suit
brought by a whistleblower who was a former Scooter Store employee.
The whistleblower will receive $3,228,251 as the statutory award,
and the whistleblowers' suit also will be dismissed.