Showdown looms between CVS pharmacies and Texas Medicaid regulators

CVS continues to battle with the Texas Attorney General's office, which has accused some of the state’s largest pharmacies of cheating the Medicaid program by reporting exaggerated prices on medications and raking in larger reimbursements than they deserve.

CVS continues to battle with the Texas Attorney General's office, which has accused some of the state’s largest pharmacies of cheating the Medicaid program by reporting exaggerated prices on medications and raking in larger reimbursements than they deserve. While several pharmacies have settled with the state and gone about their business, 5 years of negotiations between CVS and state Medicaid regulators have resulted in competing lawsuits filed recently in Travis County. CVS’ lawsuit, filed in late December, insists the pharmacy had the state’s blessing to use the prices that are now in question for Medicaid reimbursement. Weeks later, the state filed a lawsuit of its own, accusing CVS of submitting fraudulent reimbursement requests since 2005. That lawsuit claims CVS inflated prices reported to Medicaid by as much as 670 times the customary price. The state estimates CVS has made between $128 million and $130 million by falsely reporting the prices, according to Raymond Winter, division chief of the attorney general’s civil medicaid fraud division. In its lawsuit against the state, CVS says the amount in dispute is $30.5 million. If the disagreement goes to a jury trial, CVS runs the risk of being banned from the state’s Medicaid program for 10 years if it loses. There is similar litigation pending against CVS in California and Rhode Island.