CVS Pharmacy has agreed to pay more than $2.2 million to New York as part of a multistate settlement resolving allegations that the company improperly billed government healthcare programs for insulin prescriptions over a decade-long period.
The settlement stems from allegations that CVS pharmacies submitted false claims to Medicaid and other government healthcare programs between January 2010 and December 2020 involving insulin pen prescriptions. New York officials alleged the company dispensed more insulin than patients were authorized to receive, underreported the actual days of supply provided to patients and allowed some prescriptions to be refilled earlier than permitted.
According to the agreement, the alleged conduct involved insulin pens commonly sold in sealed cartons containing multiple pens. Government healthcare plans and pharmacy benefit managers often limit reimbursements to a 30- or 90-day supply of medication and rely on pharmacies to accurately report the amount dispensed and the expected duration of the prescription.
State investigators alleged that some CVS pharmacies reported lower days-of-supply figures than were actually dispensed when billing government programs. Officials contended that the practice prevented insurers and pharmacy benefit managers from detecting premature refills and resulted in reimbursement for insulin quantities patients did not yet need.
CVS acknowledged that some pharmacies dispensed full insulin pen cartons that exceeded plan limits and that pharmacy staff at times reported days-of-supply figures lower than the actual amount dispensed. The company also acknowledged that refill calculations tied to those entries could generate automatic refill notifications earlier than appropriate, resulting in some patients receiving insulin before they were eligible for reimbursement under government healthcare program rules.
As part of the settlement, CVS agreed to participate in a nationwide resolution totaling $36.5 million. New York’s share of the settlement is $2,257,250.51, including more than $1.1 million designated as restitution. The agreement states that the total recovery attributed to New York, including portions paid through the related federal settlement, exceeds $3.8 million.
The settlement resolves civil claims related to the insulin billing allegations but does not release the company from potential criminal liability, antitrust claims, consumer protection actions or claims involving conduct outside the scope of the agreement. CVS did not admit liability in the settlement but accepted responsibility for the conduct described in the agreement.
The agreement was signed on behalf of New York by Amy Held, director of the Medicaid Fraud Control Unit in the Office of the Attorney General, and finalized in April and May.
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