Ohio Company Indicted in ‘Power Chair Scooter’ Billing Scam

CINCINNATI–Ohio company Active Solutions of Worthington
conspired to defraud Medicare and Medicaid through a
“bait-and-switch” scheme that selectively targeted people who
wanted portable scooters, according to a federal indictment
unsealed Wednesday.

Filed in U.S. District Court for the Western District of
Virginia, the indictment accused the company of deceptively billing
the government programs for power wheelchair claims totaling $25.9
million from 2002 through 2005.

Michael Cowen, one of Active Solutions’ two owners, was charged
under the indictment with 32 criminal counts, including conspiracy
to commit health care fraud, conspiracy to launder money, mail
fraud, telemarketing fraud and obstruction of justice.

According to the indictment, the company advertised lightweight
portable scooters on television, implying the cost would be covered
by Medicare and Medicaid, to interest beneficiaries. Once they
called for more information, beneficiaries were screened to see if
their diagnosis would qualify them for a power wheelchair.

If so, company sales reps would set up a three-way call with the
beneficiary and their physician to obtain a prescription for a
“power chair scooter.” The reps would then prepare a power
wheelchair CMN for the doctor to sign.

The indictment alleged Cowen coined the term “power chair
scooter” to confuse both beneficiaries and physicians, knowing that
the scooters featured in Active Solutions’ ads are considered
convenience items and are not routinely covered by Medicare and
Medicaid.

On delivery, “most beneficiaries were dissatisfied, since they
were expecting to receive a lightweight, portable power scooter as
shown on the television advertisement and not the heavier and less
transportable motorized wheelchair,” the indictment said, noting
that some of the units were placed in basement apartments or mobile
homes where limited space made it impossible for the PWCs to
maneuver freely.

The indictment alleged that, in anticipation of beneficiary
complaints, Active Solutions’ delivery staff “learned how to close
the sale by providing information, some of which was false and
misleading, including: power scooters tend to tip over easily; the
motorized wheelchair is what your doctor ordered and your doctor
knows your physical situation best; the motorized wheelchair is
paid for and costs you little or nothing at all; Medicare will not
pay for scooters;” and “your physician is looking at the future as
well as the present.”

In addition, during DMERC audits and appeals of denied claims,
files sent to the auditors and Administrative Law Judges “were
‘seeded’ with documents, such as the CMN instruction sheet, which
was never provided to the physicians during the sales process,” the
indictment charged.

Cowen and others enjoyed the proceeds of the scheme, according
to the indictment, through the purchase of various vehicles,
investing in securities and leasing a Cessna Citation jet for $1.09
million, among other things.

Cowen has been arrested in Florida and will be extradited to
Virginia, prosecutors said.

Jan Michael Bliwas, Active Solutions’ other owner, pleaded
guilty in September to conspiracy to commit health care fraud,
telemarketing fraud, mail fraud and money laundering. Bliwas is
scheduled to be sentenced Dec. 20 in the Roanoke federal
court.