State joined a multistate agreement resolving allegations that CVS overbilled Medicaid for insulin prescriptions

New Jersey will receive $365,725 as part of a $36.5 million multistate settlement with CVS Pharmacy over allegations that the company overbilled Medicaid for insulin prescriptions, Attorney General Jennifer Davenport announced Monday.

According to state and federal investigators, CVS knowingly dispensed more insulin to customers than they needed between 2010 and 2020 while reporting that it was dispensing the correct amount, resulting in millions of dollars in improper Medicaid reimbursements.

Investigators found that CVS dispensed more insulin to Medicaid recipients than their prescriptions specified and refilled insulin pen prescriptions before they were needed. They also alleged that CVS falsely underreported how long insulin supplies would last and failed to comply with rules used to calculate refill dates, allowing some recipients to accumulate excess insulin that could expire before use.

Under the settlement, CVS will pay $36.5 million to states and the federal government, including more than $25 million to participating state Medicaid programs.

“Fraud steals taxpayer funds that are intended for use by individuals and families for essential healthcare services,” Davenport said in a statement.

New Jersey joined the settlement with 35 other states, the District of Columbia and the U.S. Department of Justice. The investigation involved the National Association of Medicaid Fraud Control Units and the U.S. Attorney’s Office for the Southern District of New York.