Dignity Health to pay feds $1.55 million for lost opioids

Dignity Health, San Francisco, agreed Wednesday to pay $1.55 million to resolve claims it mishandled controlled substances.

The 37-hospital system will pay $1.25 million immediately, with the remainder to be submitted as deferred payment pending two-year compliance and an action plan.

The U.S. Department of Justice's Drug Enforcement Administration investigated Dignity after one of its hospitals, St. Joseph's Medical Center in Stockton, Calif., lost more than 20,000 hydrocodone tablets from its outpatient pharmacy in 2010 and 2011. DOJ officials said hydrocodone, a narcotic pain medication, is often obtained from legitimate healthcare sources and then pushed onto the black market.

The DEA found that several Dignity facilities in the Sacramento area had not properly recorded the status of their prescription drugs and other controlled substances.

“Healthcare providers have an obligation to protect public health. Keeping accurate records and restricting access to controlled substances are key in fulfilling that responsibility,” said DEA lead agent Jay Fitzpatrick in a release. “This significant civil penalty underscores DEA's commitment in the fight against prescription drug abuse by holding companies accountable, regardless of their size.”

In response, Dignity said it has already worked with the government to create an action plan and increased its compliance with the Controlled Substances Act.

“Dignity Health takes this issue very seriously and has cooperated fully in the development of this settlement agreement,” the system said in a statement. “Since self-reporting the pharmacy diversions, we have worked aggressively to update and standardize our practices to purchase, track and manage controlled substances. Recent reviews confirm our pharmacies comply with, or exceed DEA regulations.”

Follow Bob Herman on Twitter: @MHbherman