The Collapse of The Scooter Store

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I know that you are probably tired of hearing about healthcare, Obamacare, and anything having to do with the phrase insurance. If there is something we can all agree on, it is probably the fact that our healthcare system has room for improvement. Whether or not the Affordable Healthcare Act is going to provide the solutions we need remains to be seen. Everyone has their own theories about how the law will or won’t fix our current problems, but the truth is that we simply won’t know until it is put into action. Otherwise, we are just speculating and arguing whose unproven theory is more likely to occur. scooterstore2It is all too easy to blame the system and politicians, but if you take a deep breath and a step back, some bigger problems come into focus. Here are some facts to chew on: Medicare, Medicaid, and the Children’s Health Insurance Program account for around 21% of our national budget. Around $472 billion per year goes to Medicare alone. Only Social Security accounts for more of the national budget. Out of that $472 billion approximately $98 billion is lost to fraud and abuse. If we are losing 20% of our Medicare budget to swindlers and scams, is the system really the only thing to blame? The truth is that doctors, medical health professionals, and Durable Medical Equipment (DME) dealers are responsible for robbing the system of billions of dollars every year. Take for example, the recent unraveling of The Scooter Store. In March of 2013, the FBI and several law enforcement agencies carried out a raid at the company’s headquarters in New Bruanfels, Texas. The company was accused of providing scooters and power chairs to people who did not need them. In some cases, Medicare was billed equipment at a rate of $4,000-6,000 per device and customers never even received a device. Whether or not the scooter even went to a patient, the Scooter Store was able to pocket the profits from fraudulent charges. By some estimates, around 80% of their equipment was sold under false pretenses.

Who is to Blame for Medicare Fraud?

While it has become clear that the Scooter Store was engaged in illegal and unethical practices, their scam never would have worked if doctors weren’t unnecessarily prescribing expensive medical equipment. Some defenders of doctors claim that they are simply overwhelmed with work and may not have the time to scrutinize every claim. While it is nice to give doctor the benefit of the doubt, there is also a large contingent of corrupt physicians who are more than happy to receive money in return for writing fraudulent prescriptions. Others claim that they were bullied and badgered into illegal practices. One former Scooter Store employee says, “They say we bullied doctors. That is factual. Not bullied, but we did have a color-code for doctors. Scooter Store employees were more than happy to direct patients to doctors that had been deemed as more “cooperative.” While some may agree that their aggressive sales practices don’t amount to criminal activity, the Justice Department disagrees. Soon after the FBI bust in March, the Scooter Store laid off most of its employees and shut down sales. It wasn’t long before they had to declare bankruptcy and now one of the nation’s most recognizable mobility equipment brands no longer exists. The business simply became unviable after they were unable to receive a contract as a durable medical equipment provider.

Punishment Enough?

As part of the settlement with the Justice Department, the Scooter Store has to pay a $19 million fine, which is nowhere near what they were able to steal from Medicare. It is unclear whymedicare_logo the fine seems so low, which brings us back to the whole moral of the story. There are at least a couple of takeaways. First, if it sounds too good to be true, it isn’t true. A look back at Scooter Store commercials with their promises of guaranteed Medicare approval should have instantly raised some red flags. Second, no matter what kind of healthcare system we create, there will always be people looking to make quick money and bilk the system. Perhaps we should be more worried about a culture where doctors and other trusted medical professionals are willing to commit fraud for some extra cash. The question we should really be asking is infinitely complex: what has gone into creating a healthcare culture that is so fraught with fraud? What are your thoughts? To read more specific examples of how individuals and companies are able to steal millions of dollars from Medicare, you can visit these watchdog sites: Examples of Healthcare Fraud Investigations Medicare Fraud 101


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