California Freezes Hundreds Of Thousands Of Disability Claims

( The state of California has frozen the disability insurance claims of roughly 345,000 people.

On January 13, the Employment Development Department of California said it suspects that there are many fraudulent actors who are trying to exploit the state’s disability system.

In news release, the EDD said they suspect “organized criminal elements” have filed false claims, and they’ve done so using credentials that they have stolen from medical professionals and doctors.

The agency has frozen 27,000 medical provider registrants they believe to be suspicious, as well as 345,000 claims that were associated with either those providers or which looked suspicious in their own right.

The EDD is working to confirm the identities of all medical providers. As such, they’re asking the providers to fill out identification forms that would verify the authenticity of the claims. The agency then plans to un-freeze the accounts that are proven to be real.

In the press release, the EDD said:

“While the majority of these providers and claims were likely fraud attempts, the Department has partnered with state regulators and medical provider organizations to coordinate the verification process to clear any legitimate claims as quickly as possible. This is EDD’s top priority.”

One thing that the COVID-19 pandemic proved is that many states are vulnerable to insurance benefits claims being filed fraudulently. This happened all across the country, with various type of assistance provided by both the federal and state governments.

The Los Angeles Times has reported that California alone suffered a $20 billion loss due to fraudulent insurance claims.

The disability benefits aren’t the only area that has affected California, either. The state is still working to try to un-freeze up to 1.4 million claims under the Pandemic Unemployment Assistance program after it was subject to concerns of fraud.

The EDD provided an update on that as well, saying that roughly 20% of residents were able to re-file their claims under the PUA program thus far, 90% of which the state has already cleared.

The disability insurance program helps people who are struggling with a specific disability that prevents them from working or live other parts of their lives. Now, with the program suspended, these people could face significant struggles to pay for their everyday necessities while the state figures the mess out.

The people who file the legitimate claims are the ones who pay the most when this fraud happens. And many people are questioning how it has become so easy for bad actors to commit fraud on such a widespread basis in states such as California.

State Senator Richard Pan, for example, told the Times recently that it’s very easy for people to search other people’s identities online. Pan, a pediatrician by practice who represents the Sacramento area on the state Senate, said:

“I think it speaks to the issue of privacy on the internet and the opportunity it gives people who want to scam and try to take over other people’s identity.”