Whistleblower evidence triggers major settlement resolving allegations that CVS billed Medi-Cal for unverified prescriptions
California – California Attorney General Rob Bonta and the U.S. Department of Justice reached a $18.2 million settlement with CVS Pharmacy, Inc. This ends a years-long investigation into charges that the company made false claims to Medi-Cal. The deal ends claims that the pharmacy chain used inaccurate electronic certificates for thousands of prescriptions, which led to Medi-Cal paying for drugs that failed to meet the necessary requirements.
State officials say that the alleged behavior went on for more than ten years, from 2010 until 2021. It’s believed that CVS often filed pharmacy claims during this time without checking or recording that patients matched the medical requirements for Medi-Cal coverage. Investigators said the oversight was not a technological one, but a systemic one that let millions of dollars in payments go to unverified claims.
Attorney General Bonta stressed how important pharmacies are to keeping the state’s healthcare safety net strong. He said that billing and dispensing must be done correctly and recorded properly so that Medi-Cal dollars go to people who really need them.
“Today’s settlement holds CVS accountable for its fraudulent drug dispensing and billing practices,” said Attorney General Bonta. “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. My office is committed to protecting the integrity of the Medi-Cal program and recovering ill-gotten funds.”
A former CVS pharmacist came forward with evidence that led to the complaint under the False Claims Act’s whistleblower provisions. These rules let private citizens who know about fraud file civil lawsuits on behalf of the government and get a cut of any money that is recovered. The whistleblower said that CVS submitted billing codes without the proper verification in order to speed up the process of getting paid back. This led to a habit of reckless and unsupported claims.
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 worked together to come up with the resolution. The federal government will get 44.34% of the settlement money because both the state and the federal government pay for Medi-Cal.
State officials noted that this settlement was feasible because agencies worked together and whistleblowers played a key role. The Division of Medi-Cal Fraud and Elder Abuse is still looking into incidents of fraud and elder abuse all around California. They will get money from the federal and state governments through Fiscal Year 2026. Officials made it clear that the payment settles the claims, but no court has officially found CVS liable.
The deal is another step in the ongoing fight to protect taxpayer-funded programs from fraud and abuse and keep public healthcare financing safe.
A copy of the settlement can be found here.
