The SCOOTER Store Settles False Claim Lawsuit

posted on:
September 17, 2007

author:
Staff

category:
Fraud

 As a result of a lawsuit filed by the United States, the SCOOTER Store Inc. will pay the government $4 million. The corporation will also give up many millions more in pending claims for reimbursement to Medicare. 

It was alleged that the company violated the civil False Claims Act and defrauded the United States. The settlement resolves a lawsuit brought by the United States in 2005, in which the government alleged that The SCOOTER Store engaged in a multi-media advertising campaign to entice beneficiaries to obtain power scooters paid for by Medicare, Medicaid, and other insurers.

Instead of the "zippy" power scooters that were advertised, The SCOOTER Store actually sold the beneficiaries more expensive power wheelchairs that they did not want or need. In some cases the buyer could not use the wheelchair at all.

The Scooter Store allegedly perpetrated the scheme 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 expensive. As a result of this scheme, 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. In fact, 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 violated another Medicare violation when it knowingly sold used power mobility equipment to beneficiaries and billed Medicare as if the equipment were new. In addition, the U.S. alleged that The Scooter Store charged Medicare millions for unnecessary power mobility accessories.

The civil settlement also resolves claims in a lawsuit brought by a whistleblower who was a former employee of The Scooter Store. As a result, the whistleblowers' lawsuit will be dismissed.

Under the qui tam provisions of the False Claims Act, private parties can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants like the one reached in this case.

As we have repeatedly stated, this Act provides incentives for whistleblowers to come forward and report fraudulent activity perpetrated against the United States Government. This results in the government being able to catch "cheaters" and to recover funds that were literally "stolen" from the taxpayers.

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