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 million.
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 use."
"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 beneficiaries."
"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.
