California says disability fraud became rampant during COVID. Who is to blame?
Most of the 345,000 disability claims the state is investigating as suspicious appear to be fraudulent and involve imposters posing as doctors and other medical providers, according to the California Employment Development Department.
EDD recently suspended thousands of questionable accounts of medical providers, such as doctors, in December after seeing potential fraud involving stolen identifying information from legitimate doctors and clinics.
Claims associated with those accounts or other suspicious activities were also suspended.
Since then, EDD has tried to verify any legitimate claimants associated with legitimate medical providers and separate them from the imposters. But it’s received few responses.
“These low response rates to EDD’s requests to verify information continue to confirm that most flagged claims were likely fraud attempts,” the agency said.
EDD has said the scheme involves suspected organized crime elements filing false disability insurance claims. They often try to pass themselves off as doctors or other health providers to confirm disabilities so that the state can pay the claims.
Claiming disability
Disability insurance benefits are available to eligible workers who can no longer work and who have lost pay because of illness, injury or pregnancy.
EDD says that most people with legitimate claims were not affected by this latest scam. The agency has been paying about $150 million a week in disability benefits to those claimants.
The likely fraud is the second major instance of widespread suspicious activity involving EDD since the COVID-19 pandemic overwhelmed the agency.
The agency continues to investigate allegations of fraud involving the unemployment program that it manages.
An estimated $20 billion has been paid in fraudulent unemployment claims, and organized crime is suspected to be behind much of the activity.
Investigators are looking at payments from the federally-funded Pandemic Unemployment Assistance program, which had different ways to qualify and therefore lacked the same safeguards that exist in the state’s regular Unemployment Insurance program. The PUA program ended in September.
EDD investigates possible fraud
The newer allegations concern the disability program. EDD suspended about 27,000 accounts of those claiming to be physicians and health clinics that were suspected of engaging in fraudulent activity.
The agency had reason to believe that identity thieves were using the providers’ licenses to certify disabilities on behalf of fraudulent claimants. That certification is needed to verify disabilities for benefit payments
So far, about 2% of the questionable provider accounts have verified they were legitimate.
EDD also began last month an effort to verify claimants associated with the suspicious provider accounts and other suspicious activity.
About 5%, or 17,000 people, have verified their identity. EDD says verifying these legitimate claimants and resuming payments is their top priority.
There was no estimate of potential financial loss. EDD noted that “fraud attempts are not necessarily financial losses.”
Medical providers must verify their identity using the ID.me system to certify a disability claim. EDD has noted “these personalized requests for medical provider verification through ID.me only come from an official EDD email address ending in @edd.ca.gov.”
A portion of the impacted claimants are also being directed through ID.me to verify their identity.
EDD encourages people to respond to instructions on their specific notice as quickly as possible to help EDD validate legitimate claimants.
This story was originally published February 15, 2022 at 11:33 AM.
.jpg)