Government agents raid New Braunfels Scooter Store; Employees told to leave

FBI, Department of Justice investigates possible Medicare fraud

Published On: Feb 20 2013 11:49:20 AM CST   Updated On: Feb 20 2013 11:46:18 AM CST

Federal and state officials raided the Scooter Store headquarters in New Braunfels Wednesday morning, as part of an ongoing investigation into possible Medicare fraud.

Most Scooter Store employees left the building mid-morning without comment, referring all inquiries to the FBI.

"This is a Department of Justice investigation involving the FBI, the Office of the Inspector General and the Texas Medicare Fraud Department," said Timothy Menke, senior advisor for investigations with the Office of the Inspector General.

Beyond that, Menke had no other information and said he did not know how long the store would be shut down.

However, one employee, who asked not to be identified, said they were told at least two days.

That employee said workers were escorted to the door, where they were met by government agents who had a list of names of employees. The employee said if their names were on the list, they were not allowed to leave.

On Feb. 8, the Scooter Store the elimination of 150 jobs. In a news release issued at the time, the company blamed the layoffs on "the result of recent announcements by government agencies related to fundamental changes in claims processing procedures and reductions in reimbursement amounts."

In September 2012, the company laid off 220 workers.

At the time, company officials blamed a 40 percent drop in Medicare reimbursements for power mobility devices in part for the reduction in force.

The government also changed its pay schedule, requiring patients to rent the scooters rather than pay for them outright. Those changes, coupled with a new program that requires prior authorization for patients to get coverage for a scooter, forced the company to reassess its business model, a spokesman said at the time.

The changes to the way Medicare handles scooter claims came after an audit by the Office of the Inspector General, which found rampant fraud in seven states, including Texas, involving power mobility devices.