CVS Accused Of Years Of Faulty Insulin Refills In $37.8 Million Settlement

Federal prosecutors on Tuesday said Jay Clayton, the U.S. attorney for the Southern District of New York, alleged that CVS Health Inc. (NYSE:CVS) engaged in a years-long pattern of improper billing tied to insulin pens dispensed to patients in federal healthcare programs.

Officials from multiple federal oversight agencies said the company repeatedly sought reimbursement for refills that were either unnecessary, premature, or inaccurately reported, ultimately leading to a multimillion-dollar settlement.

The United States filed and simultaneously settled a civil healthcare fraud lawsuit against CVS Pharmacy, Inc., resolving allegations that the company violated the False Claims Act between 2010 and 2020.

Also Read: CVS Pays $18.3 Million To Resolve Alleged Medi-Cal Billing Failures

The government said CVS sought reimbursement from Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program for insulin pens that exceeded prescription requirements and were refilled too early.

Under the settlement, CVS agreed to pay $37.76 million.

Of that, $24.4 million will go to the federal government, with the remainder distributed to states participating in the underlying healthcare programs.

CVS also admitted to certain conduct described in the complaint, including receiving government payments for refills that should not have been reimbursed.

According to prosecutors, CVS’s reporting of “days-of-supply”, a key factor used by pharmacy benefit managers to determine refill eligibility, frequently understated the amount of insulin dispensed.

By reporting only the maximum days allowed under a patient’s plan rather than the true quantity, CVS often avoided claim denials while providing patients more insulin than prescribed.

Federal officials said this inaccurate reporting enabled pharmacies to process premature refills automatically through CVS’ auto-refill system, which calculated refill dates based on the flawed data. That led to some patients accumulating excess insulin, posing safety concerns due to expiration risks.

The government also said CVS management knew from internal audits and PBM chargebacks that the company was over-dispensing insulin, but failed to correct the issues for several years.

CVS Price Action: CVS Health shares were down 1.61% at $76.37 at the time of publication on Wednesday, according to Benzinga Pro data.

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