WASHINGTON -- A renowned political powerbroker and chief legal strategist for the Scooter Store (TSS) has called on CMS Administrator Mark McClellan to halt federal actions that "threaten the very existence of TSS."

In a May 4 letter obtained by HME News Mark Racicot of the Bracewell & Giuliani law firm said the damage caused by repeated requests for documentation and the Justice Department's counterclaim (see HME Newswire, 5/2/2005) is immeasurable and may soon become irreversible. Since April 19, TSS has been fulfilling information requests from the DMERCS for hundreds of Medicare claims.

"The barrage of punitive actions taken against TSS over the past two months lead inescapably to one conclusion: that the federal government is targeting TSS as a high-volume supplier of power mobility equipment in order to drive down utilization," writes Racicot.

The Scooter Store is marshaling tremendous firepower to defend itself against the Justice Department accusations and "punitive" CMS actions. Racicot was chairman of the Bush-Cheney re-election campaign and governor of Montana from 1993-2001. Former New York City mayor Rudy Giuliani joined the Bracewell firm as a name partner in March.

The Justice Department on April 28 filed a counterclaim to a Scooter Suit lawsuit, claiming that the nation's largest supplier of power wheelchairs had engaged in bait-and-switch sales tactics.

The counterclaim came in response to an earlier Scooter Store lawsuit against the Department of Health and Human Services. In that suit, TSS claimed DHHS had illegally withheld reimbursement for more than 100 power wheelchairs between 2000 and 2003.

The counterclaim paints a manipulative picture of Scooter Store sales people, known as 'mobility consultants.' The Justice Department (DOJ) claims that these sales people "regularly add diagnostic information to the CMN to make it more likely that the claim will be reimbursed by Medicare."

"If their allegation is that our mobility consultants regularly forge documentation in violation of federal law, that is absolutely preposterous and we're offended that they would even have the nerve to allege that in their complaint," said Scooter Store CEO and founder Doug Harrison.

He said the company has fired employees who've violated company and Medicare policy.

The DOJ counterclaim also says TSS encourages patients to harass physicians if their doctor doesn't believe they qualify for a power wheelchair. Some physicians, according to the complaint, have lost patients because they've refused to sign a CMN.

Harrison calls those charges preposterous as well. "We don't feel it's our job to get between a patient and their physician," he said. "We're not going to call their doctor back and say, 'Your patient says you're wrong. Change the form.'"

A spokesman in the DOJ's public affairs office declined to answer questions for this story.

At the heart of the Justice Department's complaint is this: Beneficiaries call for a scooter, but then, because a power wheelchair is more profitable, TSS reroutes beneficiaries into power wheelchairs. But confusion over just what is a power chair and what is a scooter may factor into this allegation, say industry sources.

"Even doctors call up and say they want a Jazzy scooter," said Jeff Day, CEO of Freedom Fighters in Abilene, Texas. "If it's electric, it's a scooter."

Harrison points out Medicare's "irrational" reimbursement structure is also at the heart of the mobility problem.

"The system is designed to make it harder to get a $2,000 scooter than a $6,000 power wheelchair," said Harrison. "We think it's silly for them [DOJ] to say 'Hey, you've been following our irrational system. How come you are selling more of the one that's easier to sell?'"

Likewise, Harrison describes the in-the-home restriction as irrational. Under existing guidelines, Medicare will only pay for durable medical equipment that's primarily used in the home. A scooter's turf is outdoors. Power wheelchairs are equally at home indoors and outdoors.

In recent months, both CMS Administrator Mark McClellan and DHHS Secretary Michael Leavitt have championed the cost-effectiveness of home care.

"Although they clearly understand that the time for arguing about [the cost-effectiveness of home care] is done, they are fighting tooth and nail on the other hand to say we don't want to provide mobility equipment that will allow you to be mobile in the community, much less in the home," said Harrison. "That's a gross contradiction."

The Bracewell & Giuliani letter to McClellan describes a company under siege by the government, a company subject to undercover investigations, to "punishing and illegal paperwork demands," such as 990 post-pay information collections in the last three weeks.

TSS now believes, according to the letter, that government contractors are on a mission to undercover a "high error rate" and to then extrapolate that rate over all of TSS's claims. The Region B DMERC, the letter states, is already working on its extrapolation. Any day now, TSS expects to be asked for millions of dollars in recoupment from the government.

"The damage done to TSS is already immeasurable and at a point not far away will become irreversible," writes Racicot.