In a news release issued on Jan. 13, the state's Employment Development Department (EDD) stated that it suspected "organized criminal elements" of filing false claims using stolen credentials from doctors or other medical professionals. The department froze 27,000 suspicious medical provider registrants as well as 345,000 claims linked to those providers or other suspicious activity.
As the state works to unfreeze authentic accounts, the EDD is asking medical providers to fill out identification forms to confirm identities.
"While the majority of these providers and claims were most likely fraudulent attempts," the press release stated, "the Department has partnered with state regulators and medical provider organizations to coordinate the verification process in order to clear any legitimate claims as quickly as possible." "This is EDD's number one priority."
The pandemic revealed that many states were vulnerable to fraudulent insurance claims issued by the state and federal governments to assist people infected with the novel coronavirus. According to the Los Angeles Times, California has lost $20 billion due to fraudulent claims.
California is still working to unfreeze 1.4 million Pandemic Unemployment Assistance claims that were frozen due to fraud concerns. According to the Jan. 13 update, one in every five residents has refiled a claim for PUA, and 90 percent of those claims have been cleared by the state.
Americans who are disabled can benefit from disability insurance. Some people who rely on those benefits say they will struggle until the suspended claims are reprocessed.
Theresa Holt told Fox KTVU that she was "angry" after experiencing recent medical problems and being unable to access her disability insurance.
"I'm trapped in this loophole they've created. It is, in my opinion, unacceptable "She stated.
However, given the sheer number of fraudulent claims and the amount of money stolen in California, some are wondering how fraud has become so easy.
People can easily look up identities online, according to Sen. Richard Pan, a pediatrician who represents Sacramento in the state legislature.
"I think it speaks to the issue of internet privacy and the opportunity it provides people who want to scam and try to take over other people's identities," he said.