You may have seen a lot of ads over the years for the Scooter Store, a company that sells power scooters and wheelchairs to people with limited mobility. What you may not have known, however, is that the company has been under fire for selling scooters to people who really don't need them and sending Medicare the bill. Well, it finally caught up with them. Yesterday, The Scooter Store announced that it's closing its doors for good.
The Scooter Store's board of directors made the decision to essentially liquidate the business after it received notice it was being cut off from Medicare business.
Medicare has accounted for about three-quarters of the Scooter Store's business, a company representative told a U.S. Senate committee last year.
In its statement, the Scooter Store said it received two letters from the Centers for Medicare & Medicaid Services (CMS) on Thursday.
In one, CMS informed the company it was being terminated from a competitive bidding program that launched two years ago in nine cities. The termination takes effect Oct. 26.
In the other letter, the Scooter Store learned CMS wouldn't execute contracts with the company for a second round of competitive bidding. Inclusion in the second round, covering 91 cities, “would have enabled (the Scooter Store) to continue operating in critical geographic markets around the country,” the company said.
The Scooter Store statement didn't say whether CMS gave any reasons for its actions.
The company
filed for Chapter 11 bankruptcy back in April. However, being kicked out of Medicare made it all but impossible to sell assets, so the company decided to fold the tent.
The Scooter Store has been under fire since 2005, when the Justice Department sued it for luring seniors into buying scooters, then selling them more expensive equipment they didn't need. The Scooter Store settled the charges for $4 million and entered into a five-year corporate integrity agreement with the government. In the last review available, in 2011, government auditors found that The Scooter Store had received as much as $88 million in overpayments. It only agreed to pay back $19.5 million after the HHS inspector general threatened to kick it out of Medicare.
However, a new round of scrutiny began after a CBS News investigation revealed that bullying doctors into writing prescriptions for scooters was SOP for the company. A month later, federal and state agents raided The Scooter Store's headquarters in New Braunfels, Texas (a suburb of San Antonio), apparently as part of an investigation into Medicare fraud. According to court documents, the investigation is focused on former members of the company's management team.
I say good riddance. Companies that prey on seniors' vulnerabilty and send taxpayers the bill deserve to be driven out of business.