Wheelchair Fraud a Painful Reminder of How Medicare Scams Often Operate By Tod Aronovitz | 08/27/14 | 0 Comment

A long-lived Medicare scam, which first appeared in Miami in the mid-1990s before spreading throughout the country, has finally been reined in. Central to this particular scheme were power wheelchairs and motorized scooters. They were instrumental in helping fraudsters pocket a huge mark up on medical equipment—equipment that was not needed or delivered to patients, as revealed in an August 16th feature in the Washington Post.

According to the story, Medicare has paid $8.2 billion to procure power wheelchairs and scooters for 2.7 million people since 1999. However, the government does not know how much of that money was paid out to fraudsters, underscoring Medicare’s shaky defenses against fraud. It took officials about 15 years to finally put steps into place to deter this particular type of fraud.

The cracks in stopping it could be attributed to a variety of reasons including the fact that Medicare is enormous, receiving about 4.9 million claims per day. Second, the system was set up to be fast and generous, so by law, Medicare must pay most claims within 30 days, leaving little time to filter out bogus claims. Third, the wheelchairs were a good way to evade attention because “trouble with mobility” diagnoses are easier to fake. And, fourth, power wheelchairs made up just 3 percent of Medicare’s $248 billion outpatient spending—overall, a blip on the radar.

During the height of the scam, Medicare based its payments for most power wheelchairs on manufacturers’ suggested retail prices, and didn’t lower those prices for years even when wholesale prices fell—making it a worthwhile scam for fraudsters.

In the early 2000s, the wheelchair fraud scam spread from Miami to Houston and exploded, spanning to Louisiana, Arkansas and California. Nationwide, Medicare saw an abrupt spike in wheelchair claims.

Before the fraud had taken off, the chairs were uncommon. One study estimated that in 1994, only 1 in 9,000 beneficiaries got a new wheelchair, but in 2000, it was 1 in 479; by 2001, it was 1 in 362; and by 2002, it was 1 in 242.

Medicare officials started changing its rules in 2003 requiring that doctors prescribing power wheelchairs must see their patients in person. When that didn’t make a big enough dent in deterring fraudsters, the government began a legal crackdown in 2007 with a strike force of prosecutors.

The decrease in fraud really took off when Medicare began using competitive-bidding processes to lower what it paid for wheelchairs. It also required wheelchairs to be provided to patients on a rent-to-own basis, instead of being paid in total up front. In 2012, another change in the way Medicare handled claims also helped decrease fraud. Now, 19 states have the government review all wheelchair bills before paying for them.

Perhaps the biggest change was going after the Scooter Store which claimed in television commercials that power chairs would “be paid in full.” The store had been fined for fraudulent practices in 2007, but a new investigation and search warrant last year enabled federal agents to raid the Scooter Store. Although no new criminal charges have been brought, Medicare still cut funding to the store, and as a result, it went out of business.

These actions are having an impact. Last year, only about 124,000 people got power wheelchairs from Medicare—the lowest number since 2001.

However, even though the wheelchair fraud scam is in decline, Medicare’s “pay and chase” system—a system in which most claims are reviewed after the money is spent—is allowing other Medicare equipment scams to crop up an thrive.

How to Report Miami Medicare Fraud

Healthcare professionals or medical billing employees who have knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect up to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.