December 9, 2025
CVS Pharmacy has agreed to pay $18.2 million to the United States and the State of California to resolve allegations that the company violated the federal and California False Claims Acts by submitting unsupported reimbursement claims to the Medi-Cal program.
The settlement stems from a qui tam lawsuit originally filed by a former CVS pharmacist represented by Waters Kraus Paul & Siegel—work that played a central role in the investigation and ultimate settlement.
Medi-Cal, California’s Medicaid program, provides healthcare to millions of low-income residents and individuals with disabilities. To safeguard taxpayer funds, the program restricts reimbursement for certain “Code 1” drugs unless pharmacists confirm that the prescriptions meet specific diagnosis and documentation requirements.
CVS Insider Exposes Fraud Scheme
According to the allegations, CVS failed to confirm the required diagnoses and, in some cases, dispensed medications for non-approved uses while still billing Medi-Cal. The whistleblower—an experienced CVS pharmacist—came forward after witnessing the practices firsthand. By filing a qui tam lawsuit, the whistleblower enabled the government to investigate the issue and hold CVS accountable.
Waters Kraus Paul & Siegel represented the whistleblower throughout the case. As part of the settlement, the firm’s client will receive approximately $3.3 million for their role in recovering improperly billed taxpayer funds.
Paul Lawrence, of-counsel at Waters Kraus Paul & Siegel and counsel for the whistleblower, emphasized the importance of individuals who are willing to speak up.
“Our client had the courage to step forward and do the right thing—something that is never easy, especially when it involves a major employer,” Lawrence said. “Whistleblowers are essential to uncovering healthcare fraud that would otherwise remain hidden. We’re proud to stand with them and help protect public programs like Medi-Cal.”
What Is the False Claims Act?
The False Claims Act (FCA) is the government’s most important tool for combating fraud involving federal and state funds. The law plays a crucial role in protecting healthcare programs such as Medicare and Medicaid—which are frequent targets of fraudulent billing.
A key component of the FCA is its qui tam provision, which allows private individuals with knowledge of fraud to file lawsuits on the government’s behalf. These whistleblowers help uncover misconduct that government agencies alone might never detect. When a case results in a recovery, the whistleblower is entitled to receive a portion of the settlement as a reward for their courage and contribution.
The case is U.S., et al. ex rel. Zimniski v. CVS Health Corporation, filed in the U.S. District Court for the Eastern District of California. While CVS has agreed to resolve the allegations, the government noted that no determination of liability has been made.
This settlement marks the latest in a series of significant False Claims Act recoveries secured by Waters Kraus Paul & Siegel on behalf of whistleblowers nationwide. These outcomes reflect the firm’s long-standing commitment to protecting taxpayer dollars and supporting individuals who step forward to report wrongdoing.
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