The University of Michigan Health System has agreed to pay the United States $4.3 million as part of a settlement resolving allegations that it violated certain provisions of the Controlled Substances Act.
The United States Attorney’s Office for the Eastern District of Michigan announced the settlement Thursday, Aug. 30. The settlement resulted from a years-long Drug Enforcement Administration investigation of UMHS’ handling of controlled substances.
It is the nation’s largest settlement of its kind involving allegations of drug diversion at a hospital.
Also, as part of the settlement, UMHS has entered into a three-year Memorandum of Agreement with the DEA, which prescribes the hospital’s drug-handling responsibilities going forward. That memorandum also recognizes the “substantial steps” that UMHS has already taken to address deficiencies in its handling of controlled substances.
The DEA began its investigation after two tragic incidents occurred in December 2013 involving two UMHS employees – a nurse and an anesthesiology resident.
A nurse and doctor both overdosed on stolen pain medication in different areas of the sprawling University of Michigan Health System on the same day in December. The thefts that resulted in their overdoses were among among eight reported thefts of medications from the hospital last year.
On a single day that December, a nurse and doctor both overdosed on stolen pain medication in different areas of the sprawling University of Michigan Health System.
Both were found in hospital bathrooms with drugs meant for patients injected into their own bodies.
The nurse, 29-year-old Carla Del Vecchio, died. The doctor, 32-year-old Timothy Sutton, lived and was subsequently convicted of a crime and lost his job.
Following its investigation, the DEA concluded that a number of the hospital’s practices concerning controlled substances were in violation of the CSA.
For example, UMHS failed to secure DEA registrations for 15 off-site ambulatory care locations throughout Ann Arbor and Southeast Michigan, each of which received narcotics from the main hospital’s pharmacy and dispensed them to patients.
The failure to secure DEA registrations rendered unlawful all of the narcotics distributions from the main hospital to the unregistered off-site locations, as well as the unregistered locations’ subsequent dispensing of these narcotics to their patients.
The DEA also determined that UMHS committed a number of significant record keeping violations, some of which included failing to maintain complete and accurate records of certain controlled substances that it received, sold, delivered or otherwise disposed of, and failing to notify the DEA in a timely manner regarding certain instances of thefts or significant losses of controlled substances.
The DEA concluded that UMHS’ deficient record keeping negatively impacted UMHS’ ability to guard against the theft and diversion of controlled substances.
“Every professional and every institution throughout our health care system has a responsibility to comply with the laws governing the regulation of controlled substances,” United States Attorney Matthew Schneider said in a statement. “Even the University of Michigan Health System, which does great work every single day, has an obligation to its patients, to its employees, and to the public to responsibly control its drug inventory.”
Michigan Medicine Spokesperson Beata Mostafavi said the health system takes the issues of the settlement seriously and is looking to improve its practices.
“We were not where we needed to be as a regulatory matter and, equally important, as measured against our own high standards,” she said.
“We’ve made multiple, substantial improvements to our pharmacy and controlled substance processes over the last several years and expect to continue those efforts in the future,” Mostafavi added.
In 2014, an Ann Arbor News review of dozens of records found the thefts of the drugs that resulted in the medical professionals’ overdoses were among eight reported thefts of medications from the hospital.
In 2011, no drugs were reported stolen. Two drug thefts were reported in 2012. As of July this year, there were already eight reports of stolen drugs at the hospital, according to records obtained by The Ann Arbor News via the Freedom of Information Act.
Records at that time showed drug thievery by hospital staff in the University of Michigan Health System took something of a spike at the beginning of 2012, when thousands of pills were reported missing.
All hospitals have to file a report with the DEA when a controlled substance is stolen or goes missing. The report is copied to the state’s Licensing and Regulatory Affairs, which provided The Ann Arbor News with all the forms filed by the University of Michigan Health System in 2012, 2013 and June 2014.
The drugs that went missing at the hospital ranged from a single missing pain pill to a theft of 15,000 hydrocodone pills, a generic form of Vicodin, records showed. The report on the 15,000 pills estimates they were worth $2,404 and attributes their disappearance to “employee pilferage,” specifically “an employee of the housekeeping staff.”
UM police put the number of pills that came up missing closer to 16,000. Investigators believed the pills were stolen over a span of time from May 2011 to January 2012.
This matter was investigated by Diversion Investigator Brian Bishop from the DEA’s Detroit Field Division and Assistant U.S. Attorneys Peter Caplan and Caroline Burgunder from the United States Attorney’s Office for the Eastern District of Michigan.