It’s Just Not Necessary


On any given day, if you asked someone what they thought was necessary for living a satisfying life, they might answer: food, water, oxygen, sleep, health, family, friends, freedom, love, faith, a good job, or purpose in life. The former owner-operator of a Burbank, California medical clinic built a satisfying life, albeit a brief one, on fraud. She committed Medicare fraud by prescribing unnecessary services and equipment, which were usually not provided. (It’s one thing to prescribe unnecessary treatment, but it’s even worse when the prescriber pockets government benefits they don’t deserve without performing the service.)

 The U.S. Department of Health and Human Services reports that in 2017, 9.5 percent – or $36.2 billion – in payments by Medicare were improper. If you dive down even deeper into the common causes of improper payments, 17.5 percent of the improper payments were related to medical necessity issues. (Meaning payments were disbursed by Medicare for prescribed medical treatments that were just not necessary.)

 The 53-year-old woman evidently thought that fraud was necessary to keep her high standard of living funded. (It didn’t seem to matter that she was living the high life at the expense of American taxpayers, the federal government and vulnerable citizens who had paid into the healthcare plan.)

The former medical clinic owner illegally profited about $1.7 million from the Medicare program by billing for medically unnecessary office visits and diagnostic tests. She also submitted bills for prescriptions and orders for medically unnecessary durable medical equipment and home healthcare services. She used “marketers” to offer free unnecessary medical equipment or food to Medicare beneficiaries who agreed to come to her clinic for treatment, whether they needed it or not. (Word to the wise, if you have to be lured to a medical clinic with a burger, something isn’t right.)

Today’s fraudster pleaded guilty to Medicare fraud. She was sentenced to 37 months in prison and must pay $1,711,789 in restitution to the Centers for Medicare & Medicaid Services for prescribing unnecessary services and equipment. (If you asked this criminal today what would make her life satisfying, she would most likely say that her fraudulent acts were totally unnecessary. And, prison is definitely not part of the equation for happiness.)

Today’s “Fraud of the Day” is based on an article entitled, Burbank Clinic Owner Sentenced to Federal Prison,” published by North Hollywood Patch on October 3, 2017.

LOS ANGELES (CNS) – The former owner-operator of a Burbank medical clinic was sentenced Monday to three years behind bars for participating in a scheme to defraud Medicare by prescribing unnecessary services and equipment, which often were not even provided.

Knarik Vardumyan, 53, of Burbank was sentenced by U.S. District Judge Dale S. Fischer, who ordered Vardumyan to pay more than $1.7 million in restitution to the Centers for Medicare & Medicaid Services, according to the U.S. Attorney’s Office.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.