CVS to pay out millions to NYS, federal government for alleged Medicaid fraud

CVS Pharmacy, Inc. will pay $2.25 million to New York after allegations that it overbilled Medicaid for insulin prescriptions between 2010 and 2020.

The payment is part of a $36.5 million settlement that will be paid to the federal government and state Medicaid programs around the country. The retail giant came to the agreement after giving customers more insulin than outlined in their prescriptions, allowing the company to seek extra reimbursements from Medicaid, according to the New York State Attorney General's Office.

“When big companies defraud Medicaid, hardworking New Yorkers pay the price,” said Attorney General Letitia James Tuesday in a news release.

James obtained the settlement along with 36 other attorneys general and the United States Department of Justice.

Following an investigation, the bipartisan coalition determined that CVS distributed more insulin to patients than they needed, underreported how long insulin supplies would last and did not comply with rules used to calculate refill dates, according to the attorney general’s office.

Advocates praised the state for securing repayment and ending "the waste of life-saving insulin."

"Medicaid fraud diverts resources from the care of people who need it and makes healthcare more expensive for everyone," said Janine Logan, vice president of communications and population health for Suburban Hospital Alliance of New York State. The regional organization advocates for suburban hospitals in the Hudson Valley and on Long Island.

CVS said in an emailed statement that "insulin pen billing has long been a challenge for pharmacies."

"Factors like FDA labeling changes, no single pen packaging options, insulin dosing variability, and varying payor supply limits and instructions have made billing for these medications incredibly complex," company spokesperson Amy Thibault said Tuesday.

Evolving administrator practices and technology have helped "alleviate some of these challenges in recent years," Thibault added. "With this settlement first announced in December 2025, we’re pleased to put this issue behind us and avoid the cost and expense of litigation."

The pharmaceutical company has come under fire for other government fraud cases in recent years.

Last fall, CVS Health subsidiary Omnicare filed for bankruptcy just months after a federal court ordered the company to pay $949 million in a conclusion to a legal fight that accused Omnicare of filling expired scripts and prescriptions without refills.

By Brianne Ledda

brianne.ledda@newsday.com@brianne_ledda

Brianne Ledda covers personal finance and affordability for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.