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(by Matthew Perone, NBC News) AP – TV ads show smiling seniors enjoying an “active” lifestyle on a motorized scooter, taking in the sights at the Grand Canyon, fishing on a pier and high-fiving their grandchildren at a baseball game.
The commercials, which promise freedom and independence to people with limited mobility, have driven the nearly $1 billion U.S. market for power wheelchairs and scooters. But the spots by the industry’s two leading companies, The Scooter Store and Hoveround, also have drawn scrutiny from doctors and lawmakers, who say they create the false impression that scooters are a convenient means of transportation rather than a medical necessity.
Members of Congress say the ads lead to hundreds of millions of dollars in unnecessary spending by Medicare, which is only supposed to pay for scooters when seniors are unable to use a cane, walker or regular wheelchair. Government inspectors say up to 80 percent of the scooters and power wheelchairs Medicare buys go to people who don’t meet the requirements. And doctors say more than money is at stake: Seniors who use scooters unnecessarily can become sedentary, which can exacerbate obesity and other disorders.
“Patients have been brainwashed by The Scooter Store,” says Dr. Barbara Messinger-Rapport, director of geriatric medicine at the Cleveland Clinic. “What they’re implying is that you can use these scooters to leave the house, to socialize, to get to bingo.”
The scooter controversy, which has escalated with a government raid on The Scooter’s Store’s New Braunfels, Texas, headquarters last month, underscores the influence TV ads can have on medical decisions. Like their peers in the drug industry, scooter companies say direct-to-consumer advertising educates patients about their medical options. But critics argue that the scooter spots are little more than sales pitches that cause patients to pressure doctors to prescribe unnecessary equipment.
The Scooter Store and Hoveround, both privately held companies that together make up about 70 percent of the U.S. market for scooters, spent more than $180 million on TV, radio and print advertising in 2011, up 20 percent since 2008, according to advertising tracker Kantar Media. Their ads often include language that the scooters can be paid for by Medicare or other insurance: “Nine out of ten people got them for little or no cost,” states one Hoveround ad.
Hoveround did not respond to a half-dozen requests for comment. The Scooter Store, the nation’s biggest seller of scooters, said that most people who contact the company after seeing the ads do not ultimately receive a scooter.
“The fact that 87 percent of the persons who seek power mobility products from The Scooter Store under their Medicare benefits are disqualified by the company’s screening process is powerful evidence of the company’s commitment to ensuring that only legitimate claims are submitted to Medicare,” the company said in a statement. The Scooter Store has been operating with a streamlined staff in recent days, following massive layoffs in the wake of the raid by federal agents.
Insurance executives say doctors who don’t understand when Medicare is supposed to pay for scooters are partly to blame for unnecessary purchases.
Scooters – which are larger than power wheelchairs and often include a handlebar for steering – are covered by Medicare if they are prescribed by a doctor who has completed an evaluation showing that their patient is unable to function at home without a device.
The doctor fills out a lengthy prescription form and sends it to a scooter supplier that delivers the device to the patient and then submits the paperwork to Medicare for payment. Medicare pays about 80 percent of that cost, which can range from $1,500 to $3,500. The remainder is often picked up by supplemental insurance or the government-funded Medicaid program for low-income and disabled Americans.
The process can help immobile seniors get equipment that improves their lives. Ernest Tornabell of Boynton Beach, Fla., received a scooter from Pride, a smaller manufacturer, through Medicare about six years ago. The 73-year-old suffers from obesity, diabetes and lung disease and says he used to never leave his house. Now, using the scooter he can walk his dog, go to the grocery store and run other errands.
“I couldn’t really get out and do anything before. Now I have a lot more mobility,” said Tornabell, whose doctor recommended that he get the device.
But Dr. Stephen Peake, medical director for the insurer Blue Cross Blue Shield in Tennessee, says doctors can often be as uninformed about the appropriate role of scooters as patients.
“I talk to a lot of physicians about this subject … and after our discussions, they don’t understand that you can’t get a power mobility device so mom can go to the park with the family,” Peake said in testimony before the Senate Committee on Aging last year.
One reason for the confusion? Doctors say scooter companies are just as aggressive with health professionals as they are in marketing to their patients.
Dr. Jerome Epplin of Litchfield, Ill., who also testified before the Senate, estimates that only about one out of every 10 patients who ask him for a scooter actually needs one. But he said that sales representatives from some scooter companies put pressure on him by accompanying patients to his office. The effect is coercive, he says.
“It can be intimidating,” Epplin says. “I see it as an inappropriate attempt to influence my clinical judgment when I’m evaluating a patient.”
Allegations of Medicare fraud within the industry go back nearly a decade.
In 2005 the U.S. Justice Department sued The Scooter Store, alleging that its advertising enticed seniors to obtain power scooters paid for by Medicare, and then sold patients more expensive scooters that they did not want or need. The Scooter Store settled that case in 2007 for $4 million.
As part of the settlement, The Scooter Store was operating under an agreement that made the company subject to periodic government reviews between 2007 and last year. In 2011, the latest review available, government auditors estimated that The Scooter Store received between $47 million and $88 million in improper payments for scooters.
The Scooter Store took no action to repay the money until February 2012, when the Health and Human Services’ inspector general threatened to bar the company from doing business with Medicare, which accounts for about 75 percent of its income, according to its congressional testimony.
The company said the government’s estimate was flawed and that it was willing to repay $19.5 million in overpayments. The company has paid about $5.7 million, with the rest scheduled for repayment over a 5-year period to be completed in 2017.
Medicare said in a January letter that it accepted the fee based on The Scooter Store’s own assessment of what it owed, but that the agreement “does not absolve The Scooter Store from any further liability.”
In recent months Sen. Richard Blumenthal, D-Conn. and other members of the Senate Aging Committee have pushed Medicare to recover the millions of dollars spent on unnecessary scooters each year. Those purchases totaled about $500 million in 2011, the latest year available, according to a report by the Department of Health and Human Services’ inspector general. …..
From the Associated Press. Reprinted here for educational purposes only. May not be reproduced on other websites without permission from NBC News. Visit the website at nbcnews.com.
Questions
1. a) Why are doctors concerned by the advertisements scooter companies use to sell their scooters?
b) Why is Congress concerned by power scooter advertisements?
2. Why do critics oppose scooter advertisements?
3. How do scooter companies defend their advertising?
4. By how much have scooter stores increased their advertising in the past 5 years?
5. a) What are Medicare’s requirements for a patient to be eligible for a scooter?
b) Medical insurance executives say doctors don’t understand the Medicare requirements making patients eligible for reimbursement for a scooter. How does Dr. Stephen Peake, the medical director for Blue Cross Blue Shield Tennessee, explain the problem of doctors prescribing scooters for patients who don’t really need them?
6. a) Why did the U.S. Justice Department sue The Scooter Store in 2005?
b) After The Scooter Store lost the case and settled for $4 million in 2007, how much did government auditors estimate The Scooter Store took in in improper payments (Medicare fraud) over a 5 year period?
7. a) Again in 2011, government auditors estimated The Scooter Store received between $47 – $88 million in improper payments for scooters. How did The Scooter Store respond?
b) Who calculated the improper charge amount to be repaid to Medicare?
8. Scooter company ads often include language that the scooters can be paid for by Medicare or other insurance: One Hoveround ad states: “Nine out of ten people got them [scooters] for little or no cost.”
Re-read paragraphs 16-23. In your opinion, are The Scooter Store and Hoveround’s business practices ethical? Explain your answer.
9. What responsibility do the following people have in preventing unnecessary scooters being paid for by Medicare? Explain your answers.
- seniors who get scooters but can walk on their own
- doctors who prescribe scooters to patients who don’t really need them
- Medicare, which is aware of the massive fraud committed, which wastes millions in taxpayer dollars every year
- the Scooter Store executives who use the tactics they do to sell their product at the expense of ripping off Medicare (taxpayers)
- Daniel Levinson the Inspector General of the U.S. Department of Health and Human Services. Mr. Levinson is the senior official responsible for (among other duties) law enforcement efforts to combat fraud and abuse in Medicare and Medicaid. In 2012, he threatened to, but did not, bar The Scooter Store from doing business with Medicare
- Congress, for permitting The Scooter Store to continue doing business with Medicare
- The Scooter Store executives who resort to coercion, intimidation, and unethical business practices
Background
Medicare, which says that it does not have control over how companies market chairs, launched a pilot program designed to reduce wasteful spending on scooters.
Under the program, government contractors in seven states review patients’ medical documentation to make sure they need a wheelchair or scooter before approving payments for a device. The program is being tested in a small number of states – including Florida, California and New York – because the government must pay contractors extra to review additional paperwork.
The program has been criticized by The Scooter Store’s executives, who say that contractors are too strict in their reviews, rejecting payments for power chairs that are genuinely needed.
The reduced payments are taking a toll on the company, which was founded in 1991. The Scooter Store has spent nearly $1 million lobbying Congress over the last two years, almost exclusively focused on the Medicare review program. And the company laid off about 370 employees in the past year, blaming the reduced payments it’s been getting from Medicare.
Then, last week, The Scooter Store notified most of its remaining 1,800 employees that their jobs were being eliminated. The company said in a statement to the Associated Press that it is operating with a workforce of 300 employees — down from the 2,500 workforce it had at its peak — while trying to restructure its operations.
The mass layoffs followed a raid in February by about 150 agents from the FBI, the Department of Justice and the Texas attorney general’s Medicaid fraud unit at the company’s headquarters.
Federal authorities have declined to speak about the raid, but scooter industry critics in Congress praised the action.
“This raid is a welcome step toward cracking down on waste and fraud in Medicare,” said Blumenthal, the Connecticut senator. “I have urged action to stop abusive overpayments for such devices – costing taxpayers hundreds of millions of dollars and preying on seniors with deceptive sales pitches.” (from the NBC News article)
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