CVS Health will pay $37.76 million to settle allegations it dispensed too many insulin pens to patients, and then obtained improper reimbursements from Medicare, Medicaid, and other government healthcare programs, U.S. Attorney Jay Clayton in Manhattan said on Tuesday.
The settlement resolves charges that CVS violated the federal False Claims Act between Jan. 1, 2010, and Dec. 31, 2020, by dispensing more insulin pens than doctors prescribed, obtaining reimbursements for premature refills, and underreporting how much insulin its pharmacies dispensed.
CVS allegedly instructed pharmacy staff to report the maximum days-of-supply allowed when dispensing full insulin pen cartons, to ensure it could fill prescriptions as quickly as possible and that reimbursement claims would be approved.
Patients with diabetes use the pens to give themselves insulin shots.
The payout includes $24.45 million to the federal government, and the remainder to various U.S. states, Clayton said.
CVS, based in Woonsocket, Rhode Island, said in a statement that insulin pen billing "has long been a challenge for pharmacies" because of labeling changes, variable dosing and packaging, and varying payor supply limits.
"In recent years, the evolution of PBMs (pharmacy benefit managers) and payor practices to account for insulin pen packaging and other technological enhancements have helped alleviate some of these challenges," CVS said. "With this settlement, we're pleased to put this issue behind us."
Tuesday's settlement resolves a U.S. Department of Justice lawsuit and several whistleblower cases.
The first case was brought in 2018 by Adam Rahimi, a CVS pharmacist. Whistleblowers will receive 19.5% of the settlement amount, with Rahimi receiving most of it, his lawyers said.
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