WASHINGTON--The U.S. Department of Justice filed suit against
The Scooter Store on Friday, charging the New Braunfels,
Texas-based company with submitting fraudulent power wheelchair

Filed in federal court in San Antonio, the government alleges
The Scooter Store told potential customers who had called in on its
toll-free number that Medicare would pay for expensive power
wheelchairs but not less expensive scooters.

The government suit is a counter-claim to a lawsuit The Scooter
Store filed against HHS earlier this year seeking payment for
denied power chair and scooter claims. That suit also charges HHS
with violating the law by demanding documentation to prove patient
need for the equipment in addition to a physician-signed
Certificate of Medical Necessity.

In September 2003, the government rolled out its Operation
Wheeler Dealer, including increased scrutiny of all K0011 claims,
in an effort to contain fraud and abuse of Medicare's power chair
benefit. In October 2003, the FBI conducted interviews with about
two dozen Scooter Store employees, which an FBI field agent said
was the continuation of a two-year-old investigation of the

During 2004, The Scooter Store laid off 400 employees, blaming
the government's tightened power wheelchair claims policies. By the
end of the year, the company announced it would no longer provide
power chairs or scooters to Medicare beneficiaries in the Houston
area, citing "drastically more restrictive interpretations of
coverage guidance than anywhere else in the country." Harris
County, Texas, where Houston is located, is the epicenter of the
government's crackdown, where K0011 claims must be personally
approved by a member of a special CMS task force.

Responding to the government suit, The Scooter Store President
Mike Pfister issued a statement, saying:

"Justice Department lawyers today responded to The Scooter
Store's pending suit for Medicare reimbursement with compulsory
counterclaims. This procedural action was expected and was
necessary for the government to retain its options.

"The government has applied inconsistent standards, violated the
law, and wrongfully denied claims. The specific claims made by the
government reflect an ignorance of actual conditions faced by
Medicare beneficiaries. The Scooter Store will continue to pursue
reimbursement from Medicare for power wheelchairs provided to
Medicare beneficiaries at the request of their treating physicians.
This equipment allows qualified beneficiaries to live more
independently, perform the normal activities of daily living, and
by preventing injuries and unnecessary hospitalization saves the
Medicare system more than two dollars for every dollar spent

"Unfortunately, this action by the government indicates that
some officials appear more interested in second-guessing the
conclusions reached by doctors than they are in making sure that
qualified Medicare beneficiaries have access to the medical
equipment their doctors say they need."

According to an Associated Press report, The Scooter Store has
billed the government for more than $400 million in claims since