CVS Caremark Told NY Auditors It Was Fixed. It Wasn't.
Summary
New York's state comptroller has audited the same problem three times since 2023: CVS Caremark billing prescription drug claims for Medicare-eligible NYSHIP retirees to the state's costlier commercial plan instead of the federally subsidized Medicare Rx plan. The newest audit found $19.3 million in misrouted claims for 338 members from 2022 to 2025 -- more than the $12.4 million the first audit found in 2023, even after two rounds of promised fixes. CVS Caremark told auditors both times it was in compliance and asked to close the books; the comptroller refused both times.
The first audit found this exact problem in 2023
This isn't a new discovery. The original audit, Report 2022-S-24, found $12,358,531 in claims -- 27,803 of them, for 359 members -- misrouted to the Commercial Plan between January 2015 and March 2022. That report's own year-by-year table shows the state actually did fix it, for a while: the dollar total peaked at $4.33 million in 2018, then fell to $210,228 in 2020, the first full year after Civil Service and CVS Caremark started running periodic reconciliations between the state's enrollment system, NYBEAS, and CVS Caremark's claims system. That reconciliation process caught 89% of the misrouted members the audit found.
View data as table
| 2015 | $600,428 |
|---|---|
| 2016 | $1,753,206 |
| 2017 | $3,115,355 |
| 2018 | $4,333,602 |
| 2019 | $2,106,323 |
| 2020 | $210,228 |
| 2021 | $183,968 |
| 2022 (Jan.-Mar.) | $55,421 |
The follow-up found the fix hadn't held
Nineteen months after the original report, the comptroller checked whether Civil Service and CVS Caremark had actually done what they'd promised. The results: CVS Caremark hadn't started reprocessing the original $12.36 million in flagged claims until January 2025 -- 16 months after the audit that found them -- and by the follow-up date had reprocessed just over $5 million of it, while 48% of the underlying claims still hadn't even been reviewed. Worse, despite Civil Service and CVS Caremark continuing their quarterly reconciliations the whole time, auditors found $1.37 million in new claims misrouted to the Commercial Plan between April 2022 and December 2024 -- after the original audit had already told both parties exactly what to watch for. All three of the original recommendations came back rated Partially Implemented.
View data as table
| 2022-S-24 (issued Sept. 2023) | 12,358,531 | 359 members, 27,803 claims, Jan. 2015-Mar. 2022 -- the original audit |
|---|---|---|
| 2025-F-1 follow-up (issued June 2025) | 1,370,000 | New errors found for Apr. 2022-Dec. 2024, after the first audit had already flagged the problem |
| 2025-S-19 (issued June 2026) | 19,300,000 | 338 members, Jan. 2022-June 2025 (expanded scope) -- the newest audit |
A wider net, and a bigger number
Report 2025-S-19 didn't just re-check the old cases -- it cast wider. Auditors flagged 21,243 members whose Commercial Plan claims looked like they might belong to someone Medicare-qualified, based on age, retirement status, and prior Medicare Rx Plan enrollment. They reviewed 1,018 of them, a judgmental sample the report explicitly says can't be projected onto the full flagged population⧉ -- and still confirmed 338 members, one in three of those checked, with $19.3 million in misrouted claims. In one case, a member who retired in August 2017 kept getting Commercial Plan bills until a Health Benefits Administrator finally updated the record in NYBEAS in January 2025 -- more than seven years later, $53,740 in incorrectly paid claims by then. In another, $129,317 in claims ran through the Commercial Plan for a member who had active accounts in both plans at once.
View data as table
| Members flagged as possibly Medicare-qualified | 21,243 | Based on age, retirement status, and prior Medicare Rx Plan enrollment |
|---|---|---|
| Members auditors actually reviewed | 1,018 | A judgmental sample -- the report says results cannot be projected to the full 21,243 |
| Members confirmed misrouted | 338 | $19.3 million in claims -- a 33% hit rate among the members auditors actually checked |
CVS Caremark's defense, almost word for word, twice
Both times auditors put these findings in front of CVS Caremark, the company gave nearly the same answer. In 2023: "It is our view that we are in compliance with the contract, and there are no material financial discrepancies related to the finding" -- followed by an offer to close the audit once Civil Service signed off, on the condition CVS Caremark would face no further review of that period. In 2026, the same sentence reappears verbatim⧉, attached to the same offer to close the book on 2022-2025. The comptroller's office gave the same answer both times, too -- also nearly word for word: "The Office of the State Comptroller (OSC) conducts independent audits pursuant to its constitutional and statutory authority. CVS Caremark cannot unilaterally restrict OSC's ability to audit." A vendor claiming compliance is easy to say; three years, two supposed fixes, and a bigger dollar total later, the claim hasn't held up to the state's own repeat testing.
- New York's comptroller has now audited the identical CVS Caremark billing failure three times since 2023 -- $12.36 million misrouted in the original 2023 audit, another $1.37 million found in a 2025 follow-up despite ongoing reconciliations, and $19.3 million confirmed in the newest June 2026 audit, which reviewed under 5% of the members it flagged as possibly affected.
- The fix that worked, stopped working. The original audit's own data shows the dollar total falling from $4.33 million in 2018 to $210,228 in 2020 after reconciliations began -- proof the state knows how to catch this. The 2025 follow-up found no new controls had been added since, and new errors kept accumulating anyway.
- CVS Caremark has given the same defense twice, in nearly the same words -- it's in compliance, there are no material discrepancies, and it should face no further audits of the period once the state signs off. The comptroller has rejected that offer twice, in nearly the same words, too.
The $12,358,531 (2022-S-24), $1.37 million (2025-F-1), and $19.3 million (2025-S-19) figures come from three separate audits with different, only partly overlapping periods and different sampling methods -- this piece presents them side by side as three independent findings of the same class of error, never summed as a single running total. The 2025-S-19 audit explicitly states its 1,018-member sample cannot be projected onto the full 21,243-member flagged population, so the $19.3 million and 338-member figures are what auditors confirmed in the portion they checked, not an estimate of the total exposure. The "over $5 million" reprocessed figure in the 2025 follow-up is CVS Caremark's own self-report to auditors, not independently verified by this piece as correctly returned to the state's cost-avoidance benefit.
Sources(3) ▾
- Office of the New York State Comptroller, Division of State Government Accountability, New York State Health Insurance Program: CVS Caremark Payments Made Under the Incorrect Plan (Report 2025-S-19) (2026-06-04) — The newest of three consecutive Comptroller audits of the same failure -- the primary source for this piece's headline figures. Source for the $19.3 million / 338-member finding (p. 2, 8), the audit's sampling methodology and its explicit non-statistical/non-projectable caveat (p. 8, 10), the two illustrative case examples (p. 8), the $16 billion total pharmacy-claims backdrop (p. 7), the NYSHIP/Empire Plan/Commercial-vs-Medicare-Rx-Plan cost-avoidance mechanics (p. 2, 7), CVS Caremark's full written response including its compliance claim and its attempt to close the audit against future review (p. 16-17), and the Comptroller's rebuttal (p. 17). osc.ny.gov · original document
- Office of the New York State Comptroller, Division of State Government Accountability, New York State Health Insurance Program: Incorrect Payments by CVS Caremark for Medicare Rx Drug Claims That Were Improperly Paid Under the Commercial Plan (Report 2022-S-24) (2023-09-13) — The original audit that first identified this failure -- source for the $12,358,531 / 27,803-claim / 359-member total (p. 1, 6), the year-by-year breakdown table showing the dollar amount falling from a $4.33 million peak in 2018 to $210,228 in 2020 after a 2019 reconciliation process began (p. 6-7), the $20 billion total pharmacy-claims backdrop for this audit's own 2015-2022 period (p. 5), CVS Caremark's original written response including its compliance claim and its first attempt to close the audit against future review (p. 15-16), and the Comptroller's rebuttal (p. 16) -- worded almost identically to the rebuttal issued three years later in Report 2025-S-19. osc.ny.gov · original document
- Office of the New York State Comptroller, Division of State Government Accountability, New York State Health Insurance Program: Incorrect Payments by CVS Caremark for Medicare Rx Drug Claims That Were Improperly Paid Under the Commercial Plan -- Follow-Up (Report 2025-F-1) (2025-06-18) — The middle audit in the sequence -- the Comptroller's own check, roughly 21 months after the original report, on whether Civil Service and CVS Caremark had actually fixed the problem. Source for the implementation status of all three original recommendations as of April 22, 2025 (p. 1-3), the 52%/48% claim-review split and the 'over $5 million' reprocessed figure (p. 2-3), and the newly identified $1.37 million in fresh incorrect payments for April 2022-December 2024 found despite ongoing quarterly reconciliations (p. 2). osc.ny.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
The New York State Health Insurance Program⧉ covers 1.2 million active and retired state, local-government, and school-district employees. Its Empire Plan contracts with CVS Caremark to run prescription-drug coverage through two tracks: a Commercial Plan for members without Medicare, and a Medicare Rx Plan for retirees who qualify for Medicare -- a plan that draws federal subsidies and drug-manufacturer discounts the Commercial Plan can't touch, making correct routing a direct cost saving for the state. New York's comptroller just finished auditing whether that routing works, for the third time since 2023⧉. It still doesn't: the newest audit, Report 2025-S-19, found $19.3 million in claims for 338 Medicare-qualified members and dependents that CVS Caremark paid under the pricier Commercial Plan between January 2022 and June 2025.