Early this month, CVS agreed to pay nearly $38M to settle five related whistleblower cases concerning its dispensing of insulin pens.  The government and many whistleblowers alleged that CVS improperly requested and received reimbursement for premature refills, dispensed more insulin pens than patients needed according to their prescriptions, and falsely under-reported the days-of-supply of insulin that its pharmacies dispensed.

The programs at issue included Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program.

As part of the settlement, CVS admitted that government healthcare programs paid it substantial amounts for insulin pen refills that were ineligible for reimbursement and that CVS pharmacies dispensed more insulin to beneficiaries than they were prescribed. Insulin pens are devices for diabetic patients to self-administer insulin at home, and specific dosages are often calculated by a pharmacist. Most government health programs, and PBMs who administer them, have limits for how much insulin can be dispensed at once, for example, a one-month supply, and will not reimburse for more than those limits.

CVS allegedly skirted data reporting to circumvent these rules. To fill prescriptions as quickly as possible and to ensure that reimbursement claims were approved, CVS instructed its pharmacy staff simply to report the maximum dosage allowed under the beneficiary’s plan when dispensing insulin pens, which was often lower than the amount dispensed.  In some cases, dispensing of insulin going forward was based on these false reports. Meaning some beneficiaries got much, much more insulin than prescribed, which is not only wasteful, but can be dangerous given that the medicine eventually expires.

The US further alleged that CVS management knew of this problem from audits but did nothing to remedy it. The settlement resolves five separate whistleblower lawsuits with overlapping allegations; some of the whistleblowers were former CVS pharmacists. The whistleblowers will receive a portion of the settlement as an award for bringing the conduct to the DOJ’s attention.

This is the latest news in a very busy few months of FCA activity for the healthcare giant.

• In November, CVS agreed to pay roughly $18M to resolve allegations that it billed Medi-Cal (California’s Medicaid program) for medicines not supported by applicable diagnosis and documentation requirements.
• In August, a court in Pennsylvania ordered CVS Caremark, one of the company’s PBMs, to pay nearly $300M for defrauding the government by misreporting the amount it reimbursed pharmacies for the drugs dispensed to Medicare beneficiaries. CVS has since appealed that judgment.
• In July, CVS’s Omnicare unit, which generally services long-term care facilities, was ordered to pay nearly $950M because it dispensed drugs to individuals in various long-term residential facilities that were not supported by valid prescriptions under state law and charged government programs for those drugs. This judgment is also under appeal.
• And Aetna, owned by CVS, since May has been facing a lawsuit alleging improper kickbacks related to the Medicare Advantage program in federal court in Boston.
• All of the above cases were brought by whistleblowers, as are the majority of successful cases under the FCA.

The attorneys at Whistleblower Partners have extensive experience representing whistleblowers in cases involving healthcare fraud. If you would like more information or wish to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.