Massachusetts system pays DOJ $1.9M after employee theft reveals drug inventory inaccuracies

A Massachusetts health system has agreed to a nearly $2 million settlement with the Department of Justice (DOJ) due to controlled substance record-keeping violations.

Regulators took a deep dive into the controlled substance records at Northeast Hospital Corporation, part of Beth Israel Lahey Health, in 2018 after the system reported that an employee stole nearly 18,000 units of drugs including fentanyl, oxycodone and Percocet.

The health system reported in March 2018 that a pharmacy technician had been taking medications from automated dispensing machines and recording the withdrawn substances as “expired,” according to the settlement agreement published by the DOJ (PDF).

The theft had occurred over “at least” 13 months and was discovered as the organization was overhauling its pharmacy operations and controlled substances accountability procedures, DOJ said. Northeast promptly suspended the employee and reported the theft to the Drug Enforcement Administration (DEA) and the Massachusetts Department of Public Health.

When the DEA began its investigation, however, the agency said it “found discrepancies” in how many substances it found in automated dispensing machines across Northeast’s locations versus what the system had documented.

“The [Controlled Substance Act] requires accurate inventorying and tracking of each controlled substance in circulation, from the manufacturer to the ultimate user,” the DOJ said in a press release. “The recordkeeping requirements are intended, in part, to prevent misuse of controlled substances and avoid overdoses or other harms.”

Northeast operates three hospitals and an outpatient center that are registered with the DEA to handle controlled substances. The settlement agreement outlines more than 10,000 instances when controlled substances were transferred between these locations without appropriate forms as well as instances where forms included handwritten inaccuracies.

“DEA requires that registrants notify the agency of transfers of controlled substances between registrants through filings with the DEA, even when transfers are among affiliated entities,” DOJ wrote in a release.

Northeast agreed to pay $1.9 million plus interest in civil penalties as part of the settlement. The organization has also committed to implementing “additional security and recordkeeping measures” alongside those it implemented voluntarily.

“We are committed to ensuring the strongest possible safeguards for the handling of controlled substances and have robust policies and procedures in place, including anti-diversion software and strong audit and monitoring practices,” a spokesperson for Northeast told Fierce Healthcare in an email statement. “After identifying concerning signs that pointed to drug diversion by an employee in 2018, we immediately notified the appropriate authorities and terminated the employee. We are grateful for the diligence and professionalism of federal law enforcement in this case.”

Similar to other states in the country tackling the opioid epidemic, Massachusetts has been focused on reducing overdose deaths from controlled substances. Opioid-related overdose deaths in the commonwealth rose 8.8% from 2020 to 2021 with fentanyl present in 93% of deaths when a toxicology report was available, according to the Massachusetts Department of Public Health.