California Attorney General Rob Bonta and the U.S. Department of Justice have announced an $18.2 million settlement with CVS Pharmacy, Inc. The agreement resolves allegations that CVS submitted false claims to Medi-Cal between 2010 and 2021.
According to the settlement, CVS is alleged to have used false electronic certifications when submitting pharmacy claims to Medi-Cal, certifying that patients qualified for payment of pharmaceutical drugs without verifying or documenting required compliance. This practice led to millions of dollars in payments for claims that did not meet Medi-Cal requirements.
Attorney General Bonta stated, “Today’s settlement holds CVS accountable for its fraudulent drug dispensing and billing practices. 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.”
The case was initiated by a former CVS pharmacist under the whistleblower provisions of the False Claims Act. This law allows private individuals with knowledge of fraud against government programs to file civil actions on behalf of the government and share in any recovery. The whistleblower alleged that CVS submitted billing codes without performing necessary verification or documentation in order to receive payments quickly.
The investigation was conducted jointly by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) and the United States Attorney’s Office for the Eastern District of California. Since Medi-Cal receives funding from both state and federal sources, 44.34% of the settlement proceeds will be directed to the United States.
The DMFEA investigates fraud within California’s Medicaid program as well as cases involving elder abuse. Whistleblowers play a significant role in uncovering such cases through False Claims Act filings or reporting at oag.ca.gov/dmfea/reporting.
The allegations resolved by this settlement remain accusations only; there has been no finding or admission of liability by CVS.
For fiscal year 2026, DMFEA is funded primarily through a grant from the U.S. Department of Health and Human Services totaling $77,652,892 (75% federal share), with an additional $25,884,297 (25%) provided by the State of California.
