OAKLAND — California Attorney General Rob Bonta, in collaboration with the United States Department of Justice, today announced a settlement with national pharmacy chain CVS Pharmacy, Inc. (CVS) over its alleged violations of the California False Claims Act. The settlement resolves allegations that between 2010 and 2021, CVS submitted pharmacy claims to Medi-Cal using false electronic certifications that certified that patients had medical conditions qualifying for the payment of pharmaceutical drugs under Medi-Cal. CVS knowingly failed to verify or document mandatory compliance for a large number of claims, resulting in the payment of millions of dollars of false claims by Medi-Cal. The settlement agreement requires CVS to pay $18.2 million.

“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.”

The allegations resolved by this settlement were raised under the whistleblower provisions of the False Claims Act by a former CVS pharmacist. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter alleged that CVS, motivated to quickly obtain claim payments, recklessly submitted billing codes without doing the necessary verification and documentation. 

The settlement is the result of a joint effort 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. As Medi-Cal is funded jointly by the state and federal governments, the United States will receive 44.34% of the settlement proceeds. 

DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These settlements are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud through False Claims Act filings and at oag.ca.gov/dmfea/reporting.

A copy of the settlement can be found here.

The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

The Division of Medi-Cal Fraud and Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $77,652,892 for Federal fiscal year (FY) 2026. The remaining 25 percent, totaling $25,884,297 for FFY 2026, is funded by the State of California. FY 2026 is from October 1, 2025, through September 30, 2026.