CVS settles with Massachusetts for $12M in Medicaid overbilling case

CVS Pharmacy will pay $12.25 million to settle allegations that it overcharged MassHealth, Massachusetts’ Medicaid program by not offering the lowest available prices for prescription drugs. 

The lawsuit, filed by the Massachusetts attorney general in April 2025, alleged that CVS offered lower prices to cash-paying customers through a discount program run by ScriptSave but failed to report those lower prices to MassHealth, according to an Aug. 27 news release from the Office of the Attorney General. 

The settlement includes a requirement for CVS to conduct an annual review of its pricing to ensure Medicaid is not overcharged in the future. 

The lawsuit also alleged that CVS’ pricing practices violated a state rule in place since 1995, which requires MassHealth to receive the lowest price CVS charges or accepts from any other payer. The case focused primarily on pricing for generic drugs and involved discount programs offered to former customers of CVS’ Health Savings Pass and pharmacies acquired from Target. 

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