Attorney General Bonta: CVS to Pay $36.5 Million to Settle Allegations of Overbilling Medi-Cal for Insulin Pens

OAKLAND - California Attorney General Rob Bonta, in collaboration with the United States Department of Justice, today announced a settlement with national pharmacy chain CVS Pharmacy, Inc. (CVS) over its submissions of false claims to the Medi-Cal program for excessive dispensing of insulin pens. The settlement resolves allegations that between January 2010 and December 2020, CVS broke the law by submitting fraudulent claims to Medi-Cal, intentionally giving patients more insulin than prescribed and lying about refill timelines to get paid for unauthorized, unnecessary medication. The settlement agreement requires CVS to pay $36.5 million total with California's share being over $2.7 million.

"Today's settlement holds CVS accountable for its fraudulent drug dispensing and billing practices," said Attorney General Bonta. "Pharmacies have an important responsibility to ensure all claims they submit to Medi-Cal are true and accurate to ensure that Medi-Cal funds go to people who actually need them. My office is committed to protecting the integrity of the Medi-Cal program and recovering ill-gotten funds."

Between January 2010 and December 2020, CVS broke federal and state laws by overcharging Medicaid for insulin pens. The pharmacy chain knowingly cheated the system by giving patients more insulin than their doctors prescribed and refilling those prescriptions far too early. To hide this, CVS under-reported how many days the insulin supply should actually last, which tricked tracking systems into approving the premature refills. They also ignored official rules that require pharmacies to use accurate usage data to calculate refill dates. As a result of these fraudulent claims, government programs ended up paying CVS for massive amounts of extra insulin that patients did not need and doctors never authorized.

The settlement is the result of a joint effort by the California Department of Justice's Division of Medi-Cal Fraud and Elder Abuse (DMFEA) and the United States Attorney's Office for the Southern District of New York. DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These settlements are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud through False Claims Act filings and at oag.ca.gov/dmfea/reporting.

Here is a copy of the settlement.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.