The SCOOTER Store Power Wheelchair Company Raided In Federal Probe

By: CBS News
By: CBS News

Critics say it's putting seniors in costly equipment they don't need, and ripping off the government for what may be hundreds of millions of dollars a year.

Now law enforcement is taking action.

On Wednesday, 150 federal and state agents raided The SCOOTER Store headquarters in New Braunfels, Texas, and agents remain on the site. CBS News just spoke to an FBI agent Thursday morning who said workers will not be allowed back into headquarters through the day as the nation's largest power wheelchair company remains under investigation.

The agents came from the Office of the Inspector General for the Department of Health and Human Services, the FBI, and the Texas Attorney General. They held some workers back for interviews and told others to leave the building immediately, and leave their desks alone.

A video taken by one worker inside the headquarters shows, presumably an official, saying to workers, "Please exit the building when you have your personal belongings. There's an exit right here."

A worker can be heard on the video saying, "Is there any way we can know what's going on?"

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

Outside, employees were handed flyers with contact information for the FBI, as The SCOOTER Store, known for its abundant TV ads, became the subject of this federal investigation.

SCOOTER Store employee Ed Silvestry said, "I pray to God that everyone's OK, and that they find employment if this place shuts down."

Late last year, former employees told CBS News the company's main goal is not to help patients -- it's to bulldoze doctors into writing prescriptions to boost profits. Former SCOOTER Store employee Brian Setzer said, "Bulldoze and get them to get the paperwork done."

CTM special correspondent Jeff Glor asked, "So people could get those wheelchairs?"

Setzer replied, "Yes."

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

Setzer said, "Yeah."

The issue is that once a doctor has written a prescription, Medicare rarely verifies whether the chairs are actually necessary. The problem was crystallized when the Inspector General of the Department of Health and Human Services released this report, finding that industry-wide, 80 percent of Medicare payments for power chairs are made in error, most going to people who don't need them, or who lack proof they need them.

From 2009 to 2012, government auditors found The SCOOTER Store overbilled Medicare by as much as $108 million.

Three former SCOOTER Store employees told CBS News the company ranked doctors based on whether they'd prescribe chairs, and that it had a program specifically to get chairs for people that physicians had already deemed ineligible. Setzer, a former-employee, says incessant phone calls and visits wore doctors down.

Setzer recalled, "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."

Asked who was telling him to do this, Setzer said, "Corporate office."

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

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

Last month, The SCOOTER Store would not agree to an on-camera interview, but told us it's committed to improving quality of life for seniors and the disabled, saying its "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."

But now, the scrutiny of the nation's largest power wheelchair company has reached a new level, as federal agents begin their examination of evidence seized at its Texas headquarters.

The evidence collection will take days. CBS News has been told that as of yet, no arrests and no charges have been filed.

Asked if part of this is to build a case to recoup the money for people who spent money on these scooters, Glor said on "CTM," "The recoupment of the money is a big part of this. The SCOOTER Store did agree to pay back $19.5 million last year. Medicare said they were overbilled $108 million. So there's been some controversy about that because Medicare says that was not a settlement. That's just a starting point."

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