CITYWIDE — New York Attorney General Letitia James joined a bipartisan coalition of 36 other attorneys general and the United States Department of Justice in securing $36.5 million from CVS Pharmacy Inc. for fraudulently overbilling Medicaid for insulin prescriptions.
From 2010 to 2020, CVS knowingly dispensed more insulin to customers than they needed while maintaining that it was reporting the correct amount of insulin in their prescriptions. These fraudulent claims allowed the company to rake in millions in extra reimbursements from Medicaid for insulin distribution.
Under a settlement with James and the coalition, CVS will pay more than $25 million to state Medicaid programs across the country, including $2.25 million to New York.
“When big companies defraud Medicaid, hardworking New Yorkers pay the price,” said James. “Our state’s Medicaid funds should support health care for those in need, not unjustly boost the profits of big corporations like CVS.”
Insulin “pens” — a set dose of insulin in a syringe contained inside a plastic shell — are a common way for diabetic patients to give themselves the insulin they need.
Patients need a prescription for these pens and receive a supply from their pharmacy that will last them a certain amount of time — often 30 or 90 days — along with instructions on how to administer the correct dose at the right frequency.
The investigation found that CVS dispensed more insulin to Medicaid recipients than their prescriptions specified and refilled insulin pen prescriptions well before they were needed. This allowed them to overbill Medicaid millions of dollars for more insulin than it should have been dispensing.
To cover up its fraud, CVS underreported how long the insulin supply would last and failed to comply with certain rules for calculating refill dates.
As a result of CVS’s false claims, some Medicaid recipients accumulated large quantities of unused insulin, which was both wasteful and potentially dangerous, as insulin can expire.
As a result of the settlement, CVS will pay $36,500,000 to the states and federal government, including $25,108,480.45 for Medicaid programs in the participating states, and $2,257,250.51 for New York.
