The Scooter Store has filed bankruptcy amid claims that they owe Medicare and Medicaid nearly $20 million. The company, which sold electric mobility chairs, reportedly overbilled the agencies over $100 million in a period of three years between 2009 and 2012.
FBI agents raided The Scooter Store’s Texas headquarters in February, seizing documents that were reportedly related to fraudulent billing. Weeks later, over 1,000 employees were informed that they were terminated “until further notice.”
As a result of the raid, The Scooter Store removed their popular TV commercials and advertisements. As reported by ABC News, they are no longer selling the mobility chairs, and may be forced to sell the company.
The company was known for their commercials advertised “free” electric mobility chairs. However, the chairs were not free, they were paid for by Medicare and Medicaid. The audit revealed that The Scooter Store overcharged the government agencies millions of dollars for the chairs.
Additionally, the audit concluded that The The Scooter Store routinely pressured doctors to prescribe the scooter chairs for patients who did not need them.
The audit, and subsequent fines and restitution likely contributed to The Scooter Store filing bankruptcy.
The bankruptcy filing includes 71 affiliates of The Scooter Store, and states that the company currently has up to $100 million in liabilities. The filing lists up to $10 million in assets. They report a total of 300 active employees.
Attorneys for The Scooter Store claim that the company was forced to file bankruptcy as the federal investigations interfered with their business. They blame former management for the misconduct and overbilling practices.
As reported by the Houston Chronicle, in addition to the civil investigation and bankruptcy, several former executives from The Scooter Store are being investigated criminally for fraudulent practices.
Sources are conflicting as to whether The Scooter Store will remain in business. One spokesman discussed plans to sell the company, while bankruptcy documents state that they will remain in operation.
The Scooter Store’s bankruptcy was filed on April 15 in the US District Bankruptcy Court of Delaware.