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Scooter Store pays $4 million to settle Medicare fraud whistleblower case

The Scooter Store Inc. will pay the federal government $4 million and give up pending Medicare reimbursement claims worth $13 million to settle a whistleblower lawsuit and other government charges that the company violated the False Claims Act and defrauded Medicare, the U.S. Justice Department announced today.

As part of the $4 million settlement, the Scooter Store founder Douglas Trent Harrison will pay $500,000. He also agreed to forego dividends from his shares in the company for the next year in exchange for a release of his personal liability.

The U.S. alleged that the Scooter Store engaged in a multi-media advertising campaign to entice beneficiaries to obtain power scooters paid for by Medicare, Medicaid, and other insurers. Instead of the “zippy” power scooters that were advertised, the Scooter Store sold the beneficiaries expensive power wheelchairs that they did not want, need, and/or could not use.

The Scooter Store will operate for the next five years under a Corporate Integrity Agreement with the Office of the Inspector General at the Department of Health and Human Services that is designed to help ensure future compliance by the company with Medicare regulations.

The civil settlement also resolves claims in a suit brought by a whistleblower who was a former employee of the Scooter Store. The whistleblower will receive $3.2 million as a reward. Under the qui tam provisions of the False Claims Act, private parties can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.

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