CVS Settlement Over $37.76 Million Insulin Pens Healthcare Fraud
- 3 days ago
- 2 min read
In a significant resolution concerning government healthcare funds, national retail pharmacy chain CVS has agreed to pay $37.76 million to settle allegations of violating the federal False Claims Act. The settlement resolves a healthcare fraud lawsuit covering alleged practices that took place over a decade, between 2010 and 2020.
The core issue centered on the dispensing of insulin pens to patients enrolled in government programs, such as Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program (FEHBP). Authorities alleged that CVS pharmacies repeatedly submitted reimbursement claims for premature refills, dispensed more insulin than patients required, and underreported the days-of-supply for the medicine. This conduct allegedly limited the system’s ability to prevent these premature refills.
U.S. Attorney Jay Clayton noted that these practices led to higher-than-necessary payments by insurers for insulin, affecting funds designated for the healthcare of individuals on government programs. Specifically, CVS allegedly instructed pharmacy staff to report the maximum days-of-supply when dispensing full insulin pen cartons, allowing prescriptions to be filled as quickly as possible and ensuring reimbursement claims were approved. CVS also acknowledged that its auto-refill program sometimes triggered premature refills based on inaccurate data.
As part of the resolution, CVS acknowledged responsibility for certain patterns of conduct and admitted that some of its pharmacies failed to follow proper billing procedures, particularly when dispensing full insulin pen cartons.
The financial settlement dictates that $24,446,240 will be paid to the United States (the federal government), with the remaining funds distributed among various states.
Government officials emphasized the seriousness of protecting federal healthcare funds. Naomi D. Gruchacz, Special Agent in Charge of the HHS-OIG, highlighted the importance of investigating allegations of improper billing to protect the federal healthcare system and the enrollees dependent on its programs. Derek M. Holt, Special Agent in Charge of the OPM-OIG, added that submitting claims for insulin refills beyond medical necessity directly impacts federal employee benefits and increases costs within the system.
The investigation leading to the settlement involved collaboration among several federal bodies, including the Department of Health and Human Services, the Department of Defense, and the Office of Personnel Management. The resolution also settles several whistleblower cases, the first of which was brought in 2018 by CVS pharmacist Adam Rahimi. Whistleblowers are set to receive 19.5% of the total settlement amount.
In response to the settlement, CVS stated that billing for insulin pens "has long been a challenge for pharmacies," citing factors like variable dosing, packaging, labeling changes, and varying payor supply limits. The company expressed satisfaction in putting the issue behind them, noting that the evolution of pharmacy benefit managers (PBMs) and technological enhancements are helping to alleviate some of these challenges. The case serves as a crucial reminder of the importance of adhering to stringent healthcare regulations.
This case underscores that maintaining the integrity of federal healthcare programs—often seen as a complex web of rules and procedures—requires strict adherence to billing guidelines, acting as a mandatory lock on the vault protecting taxpayer dollars designated for patient care.
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CVS Settlement
