TRENTON, N.J. — New Jersey has joined a multistate settlement with CVS Pharmacy that will return more than $365,000 to the state after allegations the company fraudulently overbilled Medicaid for insulin prescriptions, Attorney General Jennifer Davenport announced.
The settlement, reached by a bipartisan coalition of 37 attorneys general and the U.S. Department of Justice, requires CVS to pay $36.5 million nationwide, including more than $25 million to participating state Medicaid programs.
New Jersey’s share of the settlement totals $365,725.
According to investigators, CVS knowingly dispensed more insulin to customers than prescribed between 2010 and 2020 while reporting that it had dispensed the correct amount. The practice allegedly resulted in millions of dollars in improper Medicaid reimbursements.
“Medicaid is intended to provide essential healthcare services to individuals and families who need it most. We will not tolerate corporations who seek to exploit this important resources to benefit their bottom line,” said Attorney General Davenport. “Fraud steals taxpayer funds that are intended for use by individuals and families for essential healthcare services. We will continue to work with our state and federal partners to investigate complex fraud schemes, protect public funds, and preserve the integrity of the Medicaid program.”
Investigators found CVS dispensed excess insulin through insulin pen prescriptions and refilled prescriptions before they were needed, allowing the company to bill Medicaid for more insulin than patients should have received. Authorities also alleged CVS underreported the amount of time insulin supplies would last and failed to follow refill-date calculation rules.
As a result, some Medicaid recipients accumulated large quantities of unused insulin, which investigators said was wasteful and potentially dangerous because insulin can expire.
The investigation was conducted by a team from the National Association of Medicaid Fraud Control Units in coordination with the U.S. Attorney’s Office for the Southern District of New York.
New Jersey’s Medicaid Fraud Control Unit, which operates within the Office of the Insurance Fraud Prosecutor, participated in the settlement effort.
The settlement resolves allegations related to Medicaid billing practices and does not constitute an admission of wrongdoing by CVS.
