The University of Texas Southwestern Medical Center has agreed to pay $4.5 million to resolve allegations that its violations of the Controlled Substances Act allowed hospital staff to divert fentanyl and other dangerous drugs from the hospital, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

The civil settlement – which also includes an extensive corrective action plan – is the culmination of a three-year-long joint DEA and U.S. Attorney’s Office investigation of UTSW’s handling of controlled substances, which began in December 2018 after two UTSW nurses overdosed on fentanyl and died at UTSW’s Clements University Hospital.  This marks the largest settlement involving allegations of drug diversion at a hospital in the state of Texas and the second largest in the nation.

“For years prior to our investigation, U.T. Southwestern exhibited an almost shocking disregard for its obligations under the Controlled Substance Act, enabling some employees to steal and abuse prescription narcotics – including powerful synthetic opioids such as fentanyl.  We felt that the serial compliance failures we uncovered warranted a multi-million-dollar penalty and a stringent corrective action plan,” said U.S. Attorney Chad Meacham. . “In this settlement agreement, we’re doing everything in our power to mitigate the threat of opioid diversion by outlining protocols above and beyond what’s required by law.”

“The University of Texas Southwestern Hospital has an obligation to keep the highest standard of care for their patients. They also have an obligation of internal safeguards to keep controlled substances from being diverted,” said DEA Dallas Special Agent in Charge, Eduardo A. Chávez.  “Opioids, like fentanyl, do not discriminate in its addictive properties when diverted or taken outside the direction and supervision of medical professionals.  In this time of record overdose deaths, health care systems must be held to compliance with the Controlled Substances Act.  This is not only their legal responsibility, but also a matter of public trust and public safety. DEA Dallas pledges that we will tirelessly work with our law enforcement and regulatory partners to ensure these rules and regulations are followed to combat the opioid epidemic.”

In settlement documents, the government contends that UTSW violated multiple provisions of the Controlled Substances Act (CSA) over a five-year period, and that as a result UTSW employees were able to divert controlled substances – including fentanyl — from UTSW’s Clements University Hospital and Zale Lipshy Pavilion.

As a DEA registrant, UTSW had certain recordkeeping and reporting obligations which included monitoring all controlled substance activity within its facilities and promptly notifying the DEA whenever a theft or significant loss occurred.  The DEA determined that UTSW’s failure to meet certain of these recordkeeping and reporting obligations, along with the medical center’s failure to maintain effective controls to consistently detect and monitor suspected diversion, contributed to the health system’s overall failure to “guard against the theft and diversion of controlled substances.”

During its investigation, the DEA identified incidents in which registered nurses diverted controlled substances from UTSW over significant periods of time. Tragically, two such diversions resulted in fatal overdoses.

On Dec. 15, 2016, a UTSW nurse overdosed on fentanyl diverted from UTSW’s Clements University Hospital and was found deceased in a hospital bathroom.  Roughly 16 months later, on April 16, 2018, another UTSW nurse overdosed on diverted opioids, including fentanyl, and was found deceased in a different Clements Hospital bathroom.

According to the settlement documents, although UTSW did report certain instances of theft and loss to the DEA, it did not do so in a timely manner.  It also failed to properly document the dispensing and “wasting” of controlled substances – an essential safeguard against diversion – and made errors in forms documenting the ordering, receipt, and distribution of controlled substances – all violations of the CSA.

As part of the settlement, the medical center agreed to take significant steps to mitigate its diversion issues.  These steps, outlined in a three-year memorandum of agreement between UTSW and the DEA, include:

• Hiring an external auditor to conduct unannounced audits of controlled substances dispensed via pyxis machines (with a particular focus on auditing fentanyl), with any resulting deficiencies or discrepancies resolved in thirty days, signed off on by the Pharmacist-in-Charge, and provided to DEA;
• Instituting a training program designed to help employees identify symptoms of addiction and signs of diversion, and to understand the threat diversion poses to patient care and professional reputation;
• Creating an employee compliance hotline that permits anonymous reporting of suspected drug diversion or drug impairment;
• Installing security cameras at pyxis machines and providing footage to the DEA upon request;
• Establishing a database of employees who have been discharged or resigned because of drug diversion, and disclosing relevant information to requesting health facilities conducting pre-employment inquiries; and
• Permitting DEA personnel to enter UTSW facilities at any time, without prior notice and without a warrant, to verify compliance.

Much of the conduct outlined in the settlement agreement is merely alleged; the agreement does not constitute an admission of liability by UTSW.  However, UTSW does publicly acknowledge and admit that theft and significant loss of controlled substances occurred at Clements University Hospital and Zale Lipshy Pavilion; that UTSW failed to notify the DEA of these thefts and losses in a timely manner; and that some of UTSW’s policies and procedures were not consistent with the requirements of the CSA.

UTSW cooperated with the DEA’s investigation.  After the agency launched its probe into the medical center’s compliance program in December 2018, UTSW began working with the DEA to address deficiencies and strengthen its controls for handling controlled substances. A number of changes were instituted well before the settlement agreement was signed.

A main objective of the CSA, 21 U.S.C. §§ 801–904, is controlling illegitimate traffic in controlled substances.  To prevent the diversion of controlled substances, the CSA regulates persons, companies and other entities that manufacture, distribute, and dispense controlled substances.  With more than 100,000 Americans dying last year from drug overdose, the Justice Department and the DEA are committed to using every resource available to prevent overdose deaths and hold accountable those responsible for the opioid crisis.  The government’s rigorous investigation and resolution of this matter illustrates the government’s ongoing dedication to stem the prescription opioid crisis by ensuring that opioids are not diverted and abused.

This matter was investigated by the DEA’s Dallas Diversion Squad and Assistant U.S. Attorneys Andrew Robbins and Kenneth Coffin, with oversight from the Northern District of Texas First Assistant Scott Hogan.

A copy of the Settlement Agreement, which includes the Memorandum of Agreement, is attached below. Medical workers with concerns about prescription drug abuse or diversion can report it to the DEA here.