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CVS to pay more than $17 million over claims of overcharging Medicaid

By Terry Frieden, CNN Justice Producer
  • Pharmacy chain accused of inflating prescription claims in 10 states
  • Case was brought by a whistleblower pharmacist, who will get more than $2.5 million
  • States will receive a total of $9.5 million; federal government to get nearly $8 million
  • Justice Department says CVS has agreed to monitoring as it corrects its billing procedures

(CNN) Washington -- The nationwide retail pharmacy chain CVS has agreed to pay the federal and several state governments more than $17 million to settle claims the pharmacy overcharged Medicaid.

CVS, with 7,000 pharmacies in 41 states, allegedly submitted inflated prescription claims in 10 states.

The case against CVS was originally brought by a CVS whistleblower pharmacist in Minnesota. The government said that pharmacist will receive more than $2.5 million, which will come from what the states and the federal government recover from CVS. The federal government will receive nearly $8 million, and the 10 states will receive a total of $9.5 million.

Those states are California, Florida, Indiana, Massachusetts, Michigan, New Hampshire, Nevada, Rhode Island, Alabama and Minnesota.

Officials said CVS was paid a higher amount by Medicaid than it would have been paid if the company had followed correct billing procedures and submitted the claims to third-party insurers.

"Medicaid covers the poorest, most vulnerable people in American society. This needed government program for prescriptions is a disservice to everyone and won't be tolerated," said Daniel Levinson, inspector general of the U.S. Department of Health and Human Services.

CVS issued no immediate comment, but the Justice Department said the retailer agreed to three years of government monitoring as it implements correct billing procedures.