If you watch daytime TV or have been stuck watching daytime TV while visiting your parents, surely you’re familiar with The Scooter Store. The power wheelchair vendor has had some trouble lately, including accusations of Medicare and Medicaid fraud, a raid by the FBI, and even a lawsuit from the company’s hometown, of New Braunfels, Texas. The company laid off most of its employees, and plans to deal directly with health care providers, rather than blanketing the airwaves and selling directly to consumers.

Those investigations came after a scathing investigative piece by CBS News about the company. (Warning: the video at that link plays automatically.) Former salesmen and doctors who prescribed chairs in the past explained the company’s tactics: contact doctors’ offices incessantly to wear them down and convince them to prescribe scooters and power chairs whether the patient really needed one or not, and to depend on bureaucratic incompetence and error to get them approved by Medicare and Medicaid.

That got the attention of the federal government, and led to a raid by the Federal Bureau of Investigation. The company’s CEO insists that The Scooter Store itself wasn’t accused of fraud. Just a few weeks later, the company furloughed all employees, then permanently laid off about 1,000.

An independent audit found that the company had overbilled Medicare and Medicaid somewhere between $46.8 million and $87.7 million. The company had agreed to pay back $19.5 million. The Centers for Medicare and Medicaid Services is one of the largest creditors listed in the company’s bankruptcy petition, which details about $50 million in debt.

Just a few short years ago, in 2009, the city of New Braunfels gave the Scooter Store economic development money to convert a former Kroger store into their sparkling new headquarters. On Friday, the city filed a lawsuit to to get $2.6 million of that money back.

Scooter Store files for bankruptcy [San Antonio Express-News]
The Scooter Store Enters Court with Plans for New Distribution Footprint and Sales Model [Press Release]
City/4B Board File $2.6M Breach of Contract Lawsuit Against The Scooter Store [KGNB]
Are power wheelchair companies ripping off the government? [CBS] (Warning: auto-play video)

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