In August 2025, Chief Judge Mitchell Goldberg of the U.S. District Court for the Eastern District of Pennsylvania issued a decisive ruling against CVS Caremark, the pharmacy benefit manager unit of CVS Health, in a False Claims Act case.
What happened
On August 19, 2025, Judge Goldberg tripled the original $95 million in damages to $285 million and added $4.87 million in civil penalties, bringing the total judgment to nearly $289.9 million, with post-judgment interest accruing immediately..
While the court did not find that CVS acted with intentional fraud, Judge Goldberg determined the company acted with reckless disregard and deliberate ignorance, justifying the trebling of damages. CVS Caremark responded by stating its disappointment with the decision and announced plans to appeal the ruling.
The backstory
The ruling traces back to a whistleblower lawsuit filed in 2014 by Sarah Behnke, a former actuary for Aetna’s Medicare Part D program. Behnke discovered that CVS Caremark, the pharmacy benefit manager (PBM) for Aetna and other insurers, had been inflating drug cost data reported to Medicare. These inflated figures artificially raised the government’s reimbursement rates for 2013 and 2014, resulting in approximately $95 million in overcharges to the Medicare Part D program.
Behnke alleged that CVS Caremark knowingly used manipulated pricing data for prescriptions filled at major pharmacies, including Rite Aid and Walgreens, in violation of the False Claims Act, which allows private citizens to bring lawsuits on behalf of the federal government. After years of legal proceedings and extensive document reviews, the case went to trial in June 2025, where Judge Mitchell Goldberg concluded that, while there was no evidence CVS acted with explicit intent to defraud, the company demonstrated reckless disregard and deliberate ignorance of the accuracy of its Medicare reports.
What was said
According to the court Memorandum, “Under the False Claims Act, a defendant is “subject to a civil penalty . . . for each false claim submitted.” United States ex rel. Landsberg v. Argentis Medical, P.C., No. 03-1263, 2009 WL 10727191, at *5 (W.D. Pa. Mar. 12, 2009) (internal citations omitted). I have already determined that the DIR reports submitted by Caremark’s Part D sponsors were false. (Op. at 100.) The Parties dispute whether the number of false claims should be measured by looking to Caremark’s submissions to its Part D sponsors or from the Part D sponsors to CMS.”
See also: HIPAA Compliant Email: The Definitive Guide (2025 Update)
FAQs
What is the False Claims Act (FCA)?
The False Claims Act is a federal law that makes it illegal to knowingly submit false or fraudulent claims for payment to the U.S. government. It is one of the government’s strongest tools to combat fraud, especially in areas like healthcare, defense, and government contracting.
What counts as a false claim?
A false claim includes any knowingly false or misleading bill, record, or statement submitted to obtain federal funds. Examples include overbilling Medicare, providing unnecessary medical services, or misrepresenting the cost or quality of goods or services provided under government contracts.
Who enforces the FCA?
The U.S. Department of Justice (DOJ) enforces the FCA, often working with other federal agencies such as the Office of Inspector General (OIG) of HHS for healthcare-related fraud.
Kirsten Peremore
