On January 13, 2022, the State of California announced that it would pause 345,000 pending disability claims in an effort to combat a recent surge in suspected fraud.
Scammers have purportedly begun to impersonate doctors as they make fraudulent disability claims for nonexistent patients. The California Employment Development Department (EDD) said that they are in the process of investigating the claims of about 27,000 doctors whose credentials were used to file these dubious claims.
What is the California Employment Development Department?
Formed in 1935, the EDD is responsible for administering unemployment, disability, and family leave programs in the state of California. The EDD also performs the following functions:
- Auditing and collecting payroll taxes
- Keeping employment records for millions of California workers
- Gathering, analyzing, and publishing market labor information
What is being done?
According to their January 13th press release (read our report on the EDD), the EDD maintains that most of the suspended claims are fraudulent, but that they are working with state regulators and medical provider organizations to clear up any legitimate claims as quickly as possible.
In order to prevent further instances of fraud, the EDD stated that going forward, all purported medical providers must use ID.me to provide additional verification. Through ID.me the EDD will send medical providers a personalized verification request via email.
The EDD also stated that answers to any questions regarding fraud could be found on the Ask EDD page on the department’s website.
Who is affected?
Despite the EDD’s statement that a majority of the suspended claims are fraudulent, this recent crackdown has left many Californians with disabilities unsupported. Jim Patterson, an assembly member from Fresno, CA, has stated that some of his constituents haven’t received payments in weeks.
Of those legitimate claimants caught in the bureaucratic crossfire, Patterson said they are “at their wit's end simply because they are running out of money. They are at the end of their financial rope.”
The Associated Press reported on one such case involving a woman who claims her doctor’s office doesn’t use email and thus has been unable to engage in EDD’s new verification measures. According to the article, the woman sustained a foot injury, has been unable to work and has exhausted her savings since her benefits were suspended in December.
Familiar woes
This is not the first time the EDD has had to deal with the effect of scammers. In October 2021, ABC reported that the EDD had given out at least $20 billion in benefits to inmates who fraudulently filed for unemployment benefits. As a result the EDD similarly put a freeze on benefits to combat the fraud. This also ended up suspending the benefits of legitimate claimants.
Unfortunately, with an investigation ongoing, its unclear how long it will take for operations to return to normal for legitimate claimaints. We'll continue to follow this story as new details emerge.
Comments