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The SCOOTER Store raided by FBI and Texas Attorney General

More than 150 federal and state agents raided The SCOOTER Store headquarters in New Braunfels, Texas, on Wednesday, CBS News reported. As of this writing, the agents are still there. According to CBS, most workers were told to leave while a few select employees were asked to stay for questioning. All were ordered out of their offices and cubicles, and away from their desks and work stations. They were told to leave them just as they are. Reportedly, none of the workers will be allowed back into the headquarters while the company is under investigation.

The raiders included members of the Office of the Inspector General for the Department of Health and Human Services, the FBI, and the Texas Attorney General’s office.

A video shot by an exiting worker shows an agent telling workers, "Please exit the building when you have your personal belongings. There's an exit right here."

One worker asked, "Is there any way we can know what's going on?"

An unseen official answered, "We're executing a federal search warrant, sir."

As the employees exited the building, they were handed flyers with contact information for the FBI.

Outside the building, SCOOTER Store employee Ed Silvestry stood in the parking lot and said, "I pray to God that everyone's OK, and that they find employment if this place shuts down."

In an interview last year, former employees told CBS News that the company's main, if not only, goal had nothing to do with helping patients. Rather, increasing profits was the company’s raison d'être. In order to best accomplish this, bullying doctors into writing as many prescriptions as possible for the “product” was the tried and true method and just worked best and most effectively.

Former SCOOTER Store employee Brian Setzer agreed, saying that the company’s objective was to "bulldoze [doctors] and get them to get the paperwork done."

Special correspondent for CBS News Jeff Glor asked Setzer, "So people could get those wheelchairs?"

Setzer replied, "Yes."

"Even if they didn't need them," Glor said.

Setzer said, "Yeah."

The reason law enforcement was attracted to the SCOOTER Store is that for years Medicare had rarely verified whether the chairs prescribed by doctors were, in fact, a medical necessity for their patients.

The Inspector General of the Department of Health and Human Services has released this damning report, which documents that a full 80 percent of Medicare payments for The SCOOTER Store power chairs are “made in error.” That means that 80 percent of the approved chairs go to people who do not need them, or who cannot prove that they need them.

The numbers are staggering. According to the report, from 2009 to 2012, The SCOOTER Store overbilled Medicare by as much as $108 million.

Furthermore, three former SCOOTER Store employees told CBS News that the company used a “ranking system” for doctors. A doctor’s rank was based on whether he or she would prescribe chairs, and how many they would prescribe.

The company also had a program specifically designed to obtain chairs for people whom doctors had previously disqualified as ineligible. Setzer, the former employee, says that “program” consisted of making constant, annoying phone calls, sending hundreds of emails, invading doctors’ websites and social media outlets and contacting their contacts, and actual live visits to doctors’ offices until they were eventually, finally worn down into submission and agreement.

Setzer: "I'd get a call, 'Well, can you go in to get him to do this? Could you get him to do this.' I couldn't feel right in my heart to do that."

CBS’ Glor asked Setzer who was asking him to do this.

Setzer: "Corporate office."

Glor: "Even if you knew they didn't need it. And this happened a lot?"

Setzer: "Oh yeah. They pushed the docs so hard that they didn't want anything to do with you."

In its own defense, The SCOOTER Store told CBS News (off camera) that its main goal was the improvement of the quality of life for senior citizens and the disabled. They employ a "rigorous internal screening process -- including a Medicare-required, face-to-face doctor examination -- disqualifies 88 percent of those seeking Medicare or private insurance reimbursement for power mobility devices."

The state and federal agents’ evidence collection is expected to take several days

Interestingly, The SCOOTER Store agreed to pay back $19.5 million last year. Apparently, that is just the beginning of what could result in more payments…and prosecution.

Opinion:

We have all seen those ubiquitous TV commercials of happy, smiling seniors whizzing and whirling around in their new SCOOTER chairs, right? They are depicted as playing ball with the grandkids, trekking on down the sidewalk to the store, etc. "And at no cost to you!"

I often wondered how the company managed to do that -- provide these very expensive chairs free to so many people on low and/or fixed incomes. Well, as this investigation continues, we will get some answers, hopefully.

Yet and still, in a purely practical (and selfish) sense, I am actually relieved that the problems with The SCOOTER Store involve "only" financial shenanigans. Why? Because I or my relatives may someday need such a chair. The problems here do not seem to be related to the chair itself. I mean it has not been alleged to have caused injury or death to users -- just that, as usual, the American taxpayer is being ripped off. So what else is new?

At least the chair seems to perform as advertised. And that's a good thing.

References:

http://scooter-store.pissedconsumer.com/the-scooter-store-scam-20110128218706.html

http://news.yahoo.com/fbi-declares-war-scooter-store-165141419--finance.html

http://www.cbsnews.com/8301-505266_162-57570450/the-scooter-store-power-wheelchair-company-raided-in-federal-probe/

http://www.cbsnews.com/video/watch/?id=50141453n

http://sci.rutgers.edu/forum/archive/index.php/t-32949.html

http://www.theatlanticwire.com/business/2013/02/fbi-declares-war-scooter-store/62383/