Yesterday, I received an official notice from the California Employment Development Department (EDD) with the disheartening news, “Notice of Benefit Suspension – Medical Provider Verification Required.”

The notice states, “We are currently reviewing your Disability Insurance Claim for medical provider verification. Disability claims are not completed until all requirements are satisfied, including establishing medical eligibility through a physician/practitioner certificate signed by a duly licensed provider.”

The notice goes on to say, “This impacts your disability claim: * If you have not received any disability benefits on this claim, we can’t begin making payments until your medical provider is verified. * If you have been receiving disability benefits, we have temporarily suspended your benefits until your medical provider is verified.”

Disheartening news because I am not eligible for Disability Insurance and have never filed a claim for disability benefits.

Even more disheartening because EDD acknowledges…

EDD Weeds Out Disability Insurance Scammers, Verifies Legitimate Medical Providers

EDD continues to confirm that most of the suspect disability insurance medical provider accounts it flagged as suspicious were fraud attempts. 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.

Most disability insurance claimants in California were not impacted by this scam and EDD has continued to pay approximately $150 million a week in benefits to legitimate claimants. Similarly, most California medical providers who certify disability insurance claims were not victimized by scammers and subject to the additional verification procedures at this time.

To date, EDD has confirmed that approximately 98 percent of the 27,000 medical provider accounts it initially flagged as suspicious were likely fraudulent. Specifically, 485 providers have verified their identity at this point and the rest did not.

Scam Warnings and Enhanced Online Fraud Reporting
With identity theft remaining a pervasive threat nationwide and globally, EDD has continued to issue consumer scam alerts throughout the pandemic that warn about cell phone and email phishing schemes designed to steal personal information. Californians who receive suspicious cell phone or email phishing communications can report those scam attempts to the Federal Trade Commission (FTC) at www.ReportFraud.ftc.gov. Phishing emails can be forwarded to the FTC’s Anti-Phishing Working Group at [email protected] and phishing text messages can be forwarded to the FTC at 7726.

EDD posts information about how Californians can guard against identity theft and report fraudulent activity on its Help Fight Fraud webpage. EDD also upgraded its AskEDD website tool to smooth the fraud reporting process and make it more user friendly. This includes custom fraud reporting for medical providers who suspect someone may be using their credential to attempt to certify fake disability insurance claims. After a fraud report is submitted, the victim or fraud reporter receives a report confirmation number. <Source>

Fraud on a massive scale. Is it incompetence or by design?

State auditor blasts EDD for bungling California unemployment crisis

The California State Auditor issued a scathing report Tuesday on the EDD's disastrous response to a surge in unemployment claims during the pandemic. The report says the mistakes by the EDD opened the door to rampant fraud, forcing millions of workers to struggle for benefits. Not only that, millions may have to pay back benefits they got by mistake. The report says EDD knew for 10 years it wasn't ready for a disaster - and when the pandemic hit, sure enough, the system buckled.

The audit said EDD started waiving eligibility checks to speed up the claims. That opened the door for rampant fraud. EDD admitted it has paid at least $11 billion dollars to fraudsters - but it's possible another $20 billion also was paid to scammers. <Source>

No excuses!

The single biggest problem we see with the handling of government money is that government bureaucrats are not held responsible for behaviors and results that would be unacceptable in the private sector. No matter how large their failure, top-level bureaucrats move to other positions or retire on overly generous pensions. Contractors that provide faulty systems rebate approximately 15% of their fees – often built-in as the cost of doing business.

Bottom line…

Notice this was not an individual fraudulent claim that was flagged but a provider account that could handle thousands of fraudulent claims.

Californians are screwed as billions of dollars wash through the system, and few wonder where they wind up.

-- steve