Whistleblower Attorneys Secure $37.76 Million CVS Settlement for Insulin Overbilling Fraud
The United States Attorney's Office for the Southern District of New York announced that CVS will pay $37.76 million to resolve allegations that it violated the False Claims Act by overbilling government health plans for insulin between 2010 and 2020. The settlement resolves several qui tam (whistleblower) lawsuits, including one filed by a CVS pharmacist represented by attorneys Sarah M. Frazier of Murphy Anderson PLLC and Chet Rabon of Rabon Law Firm, PLLC.
Under the settlement, CVS will pay the United States, thirty States, the District of Columbia, Puerto Rico, and the Virgin Islands. Multiple whistleblowers involved in the combined cases will collectively receive 19.5 percent of the government's total recovery, approximately $7.1 million.
The complaints alleged that CVS submitted millions of false claims to government payors by intentionally overfilling "insulin pen" prescriptions and dispensing more product than indicated for a standard 30 or 90 days' supply. The whistleblower represented by Murphy Anderson and Rabon further asserted that the defendants placed these prescriptions on unauthorized automatic refill, regardless of patient instruction or physician orders.
In the “Stipulation and Order of Settlement and Dismissal” marking the end of the case, CVS admitted, acknowledged, and accepted responsibility for the conduct underlying its liability. That conduct included reporting inaccurate days of supply to Government healthcare programs (GHPs), including Medicare and Medicaid, for some patient prescriptions, which then resulted in CVS having dispensed refills for insulin that exceeded applicable days-of-supply limits.
CVS further admitted in the Stipulation that “many of these CVS pharmacies at times did not adhere to the appropriate refill intervals for patients that were to be based on the actual days-of supply dispensed.” The company acknowledged that the healthcare programs had “paid CVS substantial amounts for insulin pen refills that were ineligible for reimbursement, and CVS pharmacies dispensed more insulin to GHP beneficiaries than they needed.”
Frazier stated, "I have nothing but praise for the investigative work of government lawyers and agents, state and federal, over the last several years, and in particular SDNY's leadership role in safeguarding government healthcare programs and holding those who overbill accountable."
Rabon acknowledged the essential role of CVS whistleblowers, stating, "This case proves the merit of the False Claims Act in using insider information from courageous whistleblowers to expose fraud and to protect the integrity of programs relying on taxpayer funds."
------