California says most halted disability claims are fraudulent
SACRAMENTO — After suspending 345,000 disability checks because of fraud concerns, California officials on Thursday said nearly all of those claims were associated with criminals trying to trick the state into paying them.
The Employment Development Department announced this month that they had halted payments on those 345,000 claims associated with 27,000 suspicious doctors. On Thursday, the department announced it had verified the identity of just 485 of those doctors, meaning about 98% of the claims are likely fraudulent.
“The few providers that were not fraud — but instead victims of identity theft — are completing verification along with their patients to then resume certifying claims,†the department said in a news release.
The department said most of the state’s disability claims were unaffected by the scam as the state continues to pay about $150 million in benefits each week. But it said a small number of legitimate claimants have had their payments frozen.
The Employment Development Department has been plagued by fraud since the start of the COVID-19 pandemic, mostly in unemployment benefits. The state paid out roughly $20 billion in fraudulent claims since March 2020, or 11% of the $180 billion in claims paid since then.
The department could not say how much money was associated with the latest fraudulent disability claims. It also couldn’t say how much money it had paid for those fraudulent claims.
The state Employment Development Department froze 27,000 medical provider accounts and 345,000 disability insurance claims that the agency suspected of fraud.
State officials have worked to root out fraud, installing software to help verify people’s identities before approving payments. Now, state officials are using that same software to verify the identities of doctors associated with disability claims.
But the department has had trouble distinguishing between fraudulent and legitimate claims. Lots of people with legitimate claims have had their payments halted while state officials sort things out.
“The EDD is quick to take a self-serving victory lap on this. If they know who the scammers are, they should be quick to pay the thousands of people on disability with legitimate claims who are calling us begging for help,†said Assemblyman Jim Patterson (R-Fresno). “The EDD has frozen payments to hurting people with real claims, and sadly it’s going to take a long time for them to unravel this mess.â€
Alex Silva said he can’t work as a truck driver because of his cancer treatments. He and his wife, Patricia, had been living off state disability checks since November, which paid him a portion of his previous income.
But he said those checks stopped in December with no explanation. Since then, the couple have lost their car insurance and their TV and internet service because they couldn’t afford to pay for them. Patricia Silvia said her husband’s doctors have verified their identities with the Employment Development Department, but their checks still have not restarted.
“We’re scared we’re going to be homeless,†Patricia Silva said. “We don’t know what’s next. We don’t know how we are going to live.â€
Ex-California EDD employee agrees to plead guilty to $1.6-million COVID benefits fraud. She previously served time for another scheme.
Silva said the department has told them they will receive paperwork in the mail to begin the process of verifying their identity, but they haven’t received it yet. The Employment Development Department said it sent various notices to claimants this week to verify their identity.
“To avoid tipping off fraudsters, further details about the various verification procedures will not be released,†the department said in a news release.
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