CVS to pay $36.5M over insulin billing scheme as New Jersey joins settlement

Officials say the pharmacy chain overbilled Medicaid for insulin prescriptions over a decade, resulting in millions of dollars in improper reimbursements

TRENTON, N.J. — CVS Pharmacy has agreed to pay $36.5 million to resolve allegations that it overbilled Medicaid programs nationwide for insulin prescriptions, with New Jersey joining a multistate settlement that will return hundreds of thousands of dollars to the state.

Attorney General Jennifer Davenport announced Monday that New Jersey joined a coalition of 36 other attorneys general and the U.S. Department of Justice in securing the settlement.

According to investigators, CVS knowingly dispensed more insulin to Medicaid recipients than prescribed between 2010 and 2020 while billing Medicaid as though the prescriptions were being filled correctly.

Officials alleged that CVS provided excess insulin through insulin pen prescriptions and allowed refills to occur sooner than permitted, resulting in millions of dollars in improper Medicaid reimbursements.

The investigation found that CVS allegedly underreported how long insulin supplies would last and failed to follow certain refill-date calculations, leading to excess insulin being dispensed to some patients.

Authorities said some Medicaid recipients accumulated significant quantities of unused insulin, which investigators noted could become wasteful and potentially unsafe if expired.

Under the settlement, CVS will pay $36.5 million to participating states and the federal government.

Of that amount, more than $25 million will be distributed among state Medicaid programs. New Jersey is expected to receive $365,725.

Attorney General Davenport said Medicaid funds are intended to provide healthcare services to vulnerable individuals and families and that the state will continue pursuing cases involving alleged fraud against public programs.

The investigation was conducted by a team assembled through the National Association of Medicaid Fraud Control Units in coordination with the U.S. Attorney’s Office for the Southern District of New York.

The settlement includes participation from 36 states, the District of Columbia and federal authorities.

CVS has agreed to resolve the allegations through the settlement, which concludes the claims brought by the participating governments.

Key Points

CVS agreed to pay $36.5 million to resolve allegations involving Medicaid insulin billing practices.
Investigators said the company dispensed more insulin than prescribed and billed Medicaid for excess amounts.
New Jersey will receive $365,725 as part of the nationwide settlement.