TRENTON – Attorney General Jennifer Davenport and the Office of the Insurance Fraud Prosecutor (OIFP) announced that New Jersey joined a bipartisan coalition of 36 other attorneys general and the United States Department of Justice (DOJ) in securing $36.5 million from CVS Pharmacy, Inc. (CVS) for fraudulently overbilling Medicaid for insulin prescriptions.

From 2010 to 2020, CVS knowingly dispensed more insulin to customers than they needed while maintaining that it was reporting the correct amount of insulin in the customers’ prescriptions. These fraudulent claims resulted in millions of dollars in improper Medicaid reimbursements for insulin prescriptions. Under a settlement with Attorney General Davenport and the coalition, CVS will pay more than $25 million to state Medicaid programs across the country, including $365,725 to New Jersey.

“Medicaid is intended to provide essential healthcare services to individuals and families who need it most. We will not tolerate corporations who seek to exploit this important resources to benefit their bottom line,” said Attorney General Davenport.  “Fraud steals taxpayer funds that are intended for use by individuals and families for essential healthcare services. We will continue to work with our state and federal partners to investigate complex fraud schemes, protect public funds, and preserve the integrity of the Medicaid program.”

Insulin “pens” – a set dose of insulin in a syringe contained inside a plastic shell – are a common way for diabetic patients to administer insulin. Patients need a prescription for these pens and receive a supply from their pharmacy that will last them a certain amount of time – often 30 or 90 days – along with instructions on how to administer the correct dose at the right frequency.

Attorney General Davenport and the coalition’s investigation found that CVS dispensed more insulin to Medicaid recipients than their prescriptions specified and refilled insulin pen prescriptions well before they were needed. This allowed CVS to overbill Medicaid for millions of dollars for more insulin than it should have been dispensing. To cover up its fraud, CVS falsely underreported the amount of time that the supply of insulin would last and failed to comply with certain rules used to calculate refill dates. As a result of CVS’s false claims, some Medicaid recipients accumulated large quantities of unused insulin, which was both wasteful and potentially dangerous as insulin can expire.

As a result of the settlement, CVS will pay $36.5 million to the states and federal government, including $25.1 million for Medicaid programs in the participating states, and $365,725 for New Jersey.

Joining Attorney General Davenport in securing the settlement are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and the District of Columbia.

A National Association of Medicaid Fraud Control Units (NAMFCU) team investigated the allegations in conjunction with the United States Attorney’s Office for the Southern District of New York. The NAMFCU team included attorney representatives from the offices of the attorneys general for the states of New York, California, Florida, and Wisconsin.

New Jersey’s Medicaid Fraud Control Unit (MFCU) is led by Director Heather M. Hadley. The MFCU operates within the Office of the Insurance Fraud Prosecutor (OIFP), led by Acting Insurance Fraud Prosecutor, Bernard J. Cooney.

New Jersey MFCU’s total funding for federal fiscal year (FY) 2026 is $11.6 million. Of that total, 75 percent is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent is funded by the State of New Jersey.