Are power wheelchair companies ripping off the government?

Motorized wheelchairs line up on the showroom floor of The Scooter Store in Houston Wednesday, Nov. 10, 2004. The New Braunfels-based Scooter Store says that a fraud crackdown is hurting legitimate businesses and now requires Medicare patients to pay for chairs upfront and accept direct Medicare reimbursement. The scooters start at about $5,500 hundred, and Medicare pays for 80 percent of the cost. (AP Photo/Pat Sullivan)

(CBS News) Medicare fraud costs taxpayers an estimated $60 billion annually. One problem area is power wheelchairs, which cost the program hundreds of millions of dollars a year. Over the course of a several month "CBS This Morning" investigation, numerous people who have sold and prescribed these wheelchairs told CBS News that the industry bullies doctors, and that Medicare is writing checks that should never be cashed.

The SCOOTER Store is the largest supplier of power wheelchairs in the country -- the TV ads are everywhere. According to Kantar Media, it spends more than a hundred million dollars on them every year. If you saw one and became intrigued, Brian Setzer was one of the men you talked to next. He worked as a salesman at The SCOOTER Store, from 2006 until 2011.

Setzer and three other former SCOOTER Store employees told "CBS This Morning" that the company's strategy was to "bulldoze" doctors into writing prescriptions, so people would get the chairs, whether they needed them or not. "They were just pushing harder and harder to get chairs sold," Setzer said.

And, once a doctor has written a prescription, Medicare rarely checks whether the chairs are actually necessary. The issue was crystallized when the Department of Health and Human Services Inspector General released a report, finding that industry-wide, 80 percent of Medicare payments for power chairs are made in error, with most going to people who don't need them or lack proof they need them. From 2009-2012, government auditors found The SCOOTER Store overbilled Medicare by as much as 108 million dollars.

Senator Bob Corker, of the Special Committee on Aging, is looking into this very issue. "Just think about that. We have people within the bowels of government here, that know we have an eighty percent error rate, and it just continues," Corker said.

Three former employees of The SCOOTER Store told "CBS This Morning" the company also ranked doctors based on whether they'd prescribe chairs, and that it had a program specifically to get chairs for people that physicians had already deemed ineligible. Brian Setzer says incessant phone calls and visits wore doctors down.

"They pushed the doctors so hard that they didn't want anything to do with you," he said.

Physicians say the industry's television commercials are another problem. Dr. Jerome Epplin runs a family practice in Litchfield, Illinois. He says the ads give patients a sense of entitlement, and that some have left his practice because he's refused to prescribe them a chair. "They're led to believe they need them, deserve them, and if we don't sign for them, they get upset and go elsewhere."

When the ads aren't enough, Epplin says reps from some companies have gone as far as to accompany patients to their appointments with him. "There's a significant amount of pressure when that happens," he says. "Obviously they have the right to do it if the patient says it's OK, but I don't think they should do itI don't think the representative belongs in the room at all. It's between me and the patient."

The SCOOTER Store would not agree to an on-camera interview, but told "CBS This Morning" it's committed to improving quality of life for seniors and the disabled, saying its "rigorous internal screening process -- including a Medicare-required, face-to-face doctor examination -- disqualifies 88 percent of those seeking Medicare or private insurance reimbursement for power mobility devices."

The company did agree to give back $19.5 million for chairs it admitted should not have been paid for. They said the amount was less than 4 percent of the Medicare payments it received in the last two years.

But according to the Special Committee on Aging, the company only agreed to a repayment after the HHS Inspector General threatened to suspend it from federal health programs. And while The SCOOTER Store disputes the government's audits, the government found the company owes as much as four times what it's agreed to repay.

In September, the government launched a pilot program to address the issue. It requires Medicare to approve chairs before they're paid for. But the same companies - with the high error rates - were hired to run it, processing payments to suppliers from the government. Sen. Corker, not convinced the pilot will make a difference, says he is looking into alternative solutions. Meanwhile Senators Herb Kohl and Richard Blumenthal have written a letter to the Centers for Medicare and Medicaid asking why it didn't require The SCOOTER Store to repay more money.

Corker says it's all an example of a bureaucracy that is broken. "It just must make your blood boil. It made mine boil," he told "CBS This Morning." "Taking total advantage of taxpayers, and damaging a program that is one seniors count on and depend upon."