United States ex rel. Ciaschini v. Ahold USA Inc.

282 F.R.D. 27, 2012 WL 959352, 2012 U.S. Dist. LEXIS 39297
CourtDistrict Court, D. Massachusetts
DecidedMarch 22, 2012
DocketCivil Action No. 09-10838-JLT
StatusPublished
Cited by2 cases

This text of 282 F.R.D. 27 (United States ex rel. Ciaschini v. Ahold USA Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Ciaschini v. Ahold USA Inc., 282 F.R.D. 27, 2012 WL 959352, 2012 U.S. Dist. LEXIS 39297 (D. Mass. 2012).

Opinion

MEMORANDUM

TAURO, District Judge.

I. Introduction

Plaintiff/Relator David Ciaschini (“Ciaschi-ni”) brings suit under the qui tam provisions of the federal False Claims Act (“FCA”) against Defendants asserting violations of the FCA and similar state acts in Massachusetts, New York, Virginia, New Jersey, New Hampshire, Delaware, and the District of Columbia. Presently at issue is Defendants’ Motion to Dismiss Counts I, III and V through XI of the Amended Complaint [# 45]. For the following reasons, Defendant’s Motion to Dismiss is ALLOWED.

[29]*29II. Background

A private individual may bring a civil action for violations of the federal False Claims Act in the name of the United States.1 The individual is known as a qui tarn relator. At the time that PlaintiffTtelator David Ciaschi-ni filed his original complaint, the FCA imposed liability on any person who: “knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval;”2 or “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;”3 or “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.”4

In 2009, Congress passed the Fraud Enforcement Recovery Act of 2009 (“FERA”).5 Amongst other things, FERA re-designated § 3729(a)(1) as § 3729(a)(1)(A), § 3729(a)(2) as § 3729(a)(1)(B), and § 3729(a)(3) as § 3729(a)(1)(C). It also amended § 3729(a)(2), so that as § 3729(a)(1)(B) it reads “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.... ” This amendment removed the specific intent to defraud element that the Supreme Court determined was a requirement of a § 3729(a)(2) claim,6 and it also added an ex-plieit materiality requirement. Congress made § 3729(a)(1)(B) retroactive to all claims pending on or after June 7,2008.7

B. Factual Background8

Relator Ciaschini is a licensed pharmacist in the Commonwealth of Massachusetts.9 He began employment as a staff pharmacist at Defendant The Stop & Shop Supermarket Company LLC’s (“Stop & Shop”) store in Worcester, Massachusetts in 2000.10 In 2003, Ciaschini was promoted to pharmacy manager for the Worcester store,11 and in 2004 Stop & Shop bestowed upon him the award of “Pharmacist of the Year.”12

In 2007 and 2008, Joe Angileri, a Regional Pharmacy Manager for Stop & Shop and Ciaschini’s direct manager, instructed Cias-chini to audit nine of Stop & Shop’s Massachusetts stores.13 Ciaschini’s audit reports documented the following practices occurring at all nine stores.14 First, is a practice referred to as “shorting” or “front-loading.” Shorting occurs when a pharmacy does not have enough of a specific medication on hand to dispense a full prescription. The pharmacy will dispense a partial prescription and tell the customer when to return for the balance. Allegedly, when a customer, including beneficiaries of Medicaid, Medicare, and Mass-health, went to Stop & Shop to fill a prescription and Stop & Shop only dispensed some of [30]*30the prescription, it would nevertheless bill that customer’s insurer for the full amount of the prescription.15 Receipts would state that the full prescription had been dispensed.16 Customers were told when to return to pick up the remainder of their prescription.17 If the customer did not return within fourteen days, the remainder of the prescription would be returned to stock.18 Ciaschini estimates that this occurred between fifteen and thirty percent of the time.19 In his Verified Amended Complaint [# 42], Ciaschini states the following regarding the practice of shorting:

Upon information and belief, as the defendants’ employees had apparently been directed by their regional supervisors, each time one of the defendants’ employees provided a Beneficiary with a shorted amount, the defendants’ employees: (a) entered into their pharmacy computer a false number of tablets, capsules or other items being dispensed, that being the full amount of the item called for in the prescription as opposed to the actual amount being dispensed, (b) printed out a receipt which falsely reflected that the Beneficiary had, in fact, received the full amount of the prescription, and (c) required the Beneficiary to sign an electronic signature capture pad, which recorded the Beneficiary’s signature as an acknowledgment, by the beneficiary, that they received the full amount of the prescription, despite the fact that they had not.20

According to Ciaschini, shorting bills submitted to Medicare and Medicaid constitute false claims.21 He states:

To the extent that the defendants billed the government, in advance, for prescription medications and items before they were ever dispensed to a Beneficiary, but were eventually dispensed to a Beneficiary, the defendants fraudulently engaged in front-loading, thereby depriving the government of the use of such monies which the defendants had obtained in advance by false pretenses.22

In the Verified Amended Complaint, Ciaschini includes details regarding twenty instances of shorting. In each ease, he provides (1) the date Stop & Shop billed Medicaid, Medicare, or Masshealth; (2) the prescription number; (3) the initials of the customer beneficiary; (4) the number of tablets called for in the prescription; (5) the retail price of the prescription; (6) the date Stop & Shop partially dispensed the prescription; (7) the number of tablets initially dispensed; (8) a statement that Stop & Shop’s employees knowingly submitted a claim for the full prescription even though they only partially dispensed the prescription; (9) and a statement that the false claim did not indicate to Medicaid, Medicare, or Masshealth that Stop & Shop only partially dispensed the prescription.23

The second process Ciaschini included in his audit report is referred to as “re-adjudi-eation.”24 If a customer failed to pick up a prescription that had been ordered fourteen days earlier, Stop & Shop would restock that prescription.25 Upon restocking a prescription already adjudicated (approved for payment) by a federal healthcare program, Stop & Shop is:

required to ‘re-adjudicate’ the approval for, and payment of, the Restocked Item through the electronic billing system for Federal Health Care Programs and have its account debited ... effectively refunding the payment which was received for the item approved but never picked up by or delivered to the Beneficiary.26

[31]

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United States ex rel. Klein v. Empire Education Corp.
959 F. Supp. 2d 248 (N.D. New York, 2013)

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Bluebook (online)
282 F.R.D. 27, 2012 WL 959352, 2012 U.S. Dist. LEXIS 39297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-ciaschini-v-ahold-usa-inc-mad-2012.