AGs Claim Company Defrauded Medicaid on Insulin Prescriptions
By Hank Russell
A national pharmacy chain reached a $36.5 million settlement with New York Attorney General Letitia James, 36 attorneys general and the U.S. Department of Justice over claims that the company defrauded Medicaid when it came to dispensing insulin prescriptions.
From 2010 to 2020, CVS knowingly dispensed more insulin to customers than they needed while maintaining that they were reporting the correct amount of insulin in their prescriptions, according to the AGs. James and the coalition’s 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 CVS to overbill Medicaid millions of dollars for more insulin than it should have been dispensing.
To cover up their fraud, James and the coalition said, CVS falsely underreported the amount of time that the supply of insulin would last and failed to comply with certain rules used to calculate 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, according to James and the coalition.
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.
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.
“When big companies defraud Medicaid, hardworking New Yorkers pay the price,” James said. “Our state’s Medicaid funds should support health care for those in need, not unjustly boost the profits of big corporations like CVS. My office is focused on stopping fraud in all its forms, and I will continue to root out corporate corruption on behalf of New Yorkers.”
Joining Attorney General James in securing the settlement are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and the District of Columbia.
A National Association of Medicaid Fraud Control Units (NAMFCU) team investigated the allegations in conjunction with the United States Attorney’s Office for the Southern District of New York. The NAMFCU team included attorney representatives from the offices of the attorneys general for the states of New York, California, Florida, and Wisconsin.
Long Island Life & Politics reached out to CVS for comment.
“While we do everything we can to ensure patients can access the medications they need, insulin pen billing has long been a challenge for pharmacies,” the company said in a statement. “Factors like FDA labeling changes, no single pen packaging options, insulin dosing variability, and varying payor supply limits and instructions have made billing for these medications incredibly complex.”
“In recent years, the evolution of PBM [pharmacy benefit manager] and payor practices to account for insulin pen packaging and other technological enhancements have helped alleviate some of these challenges,” CVS continued. “With this settlement first announced in December 2025, we’re pleased to put this issue behind us and avoid the cost and expense of litigation.”