CVS Pharmacy will pay the state of California more than $18 million in a settlement of a lawsuit that accused the national chain of submitting fraudulent claims to the Medi-Cal public health insurance system, Attorney General Rob Bonta announced this week.
The state and the U.S. Department of Justice had sued CVS over allegations that, from 2010-2021, CVS used false electronic certifications to demonstrate that patients had medical conditions that qualified for the payment of prescription drugs under Medi-Cal, says a press release from Bonta’s office.
The pharmacy company knowingly failed to verify or document mandatory compliance for many claims, resulting in payments from Medi-Cal worth millions of dollars in false claims, Bonta’s office said.
The settlement agreement requires CVS to pay $18.2 million.
“Today’s settlement holds CVS accountable for its fraudulent drug dispensing and billing practices,” Bonta said. “Pharmacies have an important responsibility to ensure all claims they submit to Medi-Cal are verified, true, accurate and well documented. These practices ensure safe and cost-effective prescription drug use and are essential in ensuring Medi-Cal funds go to people who actually need them.”
The allegations were raised by a former CVS pharmacist under the whistleblower provisions of the False Claims Act, the press release continues. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter alleged that CVS, motivated to quickly obtain claim payments, recklessly submitted billing codes without doing the necessary verification and documentation.
Authorities said the settlement is the result of a joint effort by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse and the U.S. Attorney’s Office for the Eastern District of California. As Medi-Cal is funded jointly by the state and federal governments, the U.S. will receive 44.34% of the settlement proceeds.
CVS has not admitted it is guilty of the allegations by agreeing to the settlement, the press release says.
