Scooter Store Files for Bankruptcy After Alleged Medicare Fraud
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Scooter Store Files for Bankruptcy After Alleged Medicare Fraud

April 22, 2013


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The Scooter Store filed for bankruptcy in Wilmington, Delaware, last week, thanks in part to several government investigations that have hampered its business, according to a report from the Houston Chronicle.

Sources say the Scooter Store, which sells wheelchairs and scooters and has 71 affiliates, plans to stay open during the bankruptcy process, but it is also looking to sell a significant portion of its assets.

The Scooter Store’s finances are in great peril, as it has more than $50 million in outstanding debt, compared with less than $10 million in assets, according to its bankruptcy filing.

The company, which once had as many as 2,400 workers, has seen its financial health crippled after a series of allegedly illegal activities, which forced the Scooter Store to reduce its workforce to a mere 300 people, sources report.

The store’s struggles started this February, when roughly 150 federal agents raided its corporate headquarters. In its bankruptcy filing, the Scooter Store admitted that former executives are being investigated for criminal matters.

In addition to the pending criminal charges, the company also claimed that it has been sued in civil court for alleged wrongdoing related to "former business practices, including billing and reimbursement procedures."

The February investigation was prompted by an inquiry last December by two U.S. senators, who asked why the Scooter Store had received between $46.8 million and $87.7 million in Medicare overpayments, but only had to pay back $19.5 million, according to reports.

Sources suggest that the Scooter Store is not on the official list of contractors allowed to supply equipment to people on Medicare, so there is also some question as to whether the company could even participate in the program.

A few months ago, a CBS News investigation claimed companies like the Scooter Store were "ripping off the government," and a former employee claimed the company tried to "bulldoze" physicians into giving unnecessary prescriptions for power wheelchairs.

While these charges will be sorted out in criminal court, it should be noted that the Centers for Medicare & Medicaid Services was listed as a senior creditor in the company's bankruptcy filing, although the agency has remained quiet about its involvement.

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