150 federal and state agents raided the Headquarters of The SCOOTER Store, the country’s largest power wheelchair maker, in New Braunfels, Texas, on Wednesday. Agents remained on site and employees were not allowed back in the building Thursday.
A video taken by an employee shows agents asking them to exit the building. When asked why, the agents said, “We’re executing a federal search warrant.” Outside the building, employees were givens flyers with FBI contact information.
The probe comes after CBS This Morning aired its investigation called “Are power wheelchairs ripping off the government?” last month. Former employees told CBS last year that the company’s goal is to pressure doctors into writing prescriptions for power wheelchairs, not helping elderly patients.
“Bulldoze them and get them to get the paperwork done,” said former employee Brian Setzer.
Patients were apparently getting power wheelchairs even if they didn’t need them. Furthermore, The SCOOTER Store ranked doctors based on how willing they were to write power chair prescriptions. After the prescription is written, Medicare does not always verify that the claim is necessary.
In 2011, a report released by the Inspector General of the Department of Health found that 80 percent of Medicare power chair payments are made in error. Most go to patients who don’t need them or haven’t shown adequate proof that it is necessary.
Earlier this month The SCOOTER Store cut 150 jobs citing pending government changes to processing and claim reimbursement that would hurt the business. They also laid off 220 workers in September claiming that Medicare payments had dropped.
Government auditors claim the store overbilled Medicare by as much as $108 million from 2009 to 2012. The SCOOTER Store agreed to pay back $19.8M last years, but the government says that is not a settlement.
The investigation involves the Office of the Inspector General, the Department of the Justice, the FBI and the Texas Attorney General’s Medicaid fraud unit. As of now, no arrests have been made.
Source: CBS News