Articles on Compliance Strategies

Featured Health Business Daily Feb. 16, 2010

Drug Diversion Needs More Compliance Attention; Hospital Technician Is Heading to Prison 

Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on false claims, overpayments, compliance programs, billing errors and other Medicare compliance issues.

By Nina Youngstrom, Managing Editor
(nyoungstrom@aishealth.com)

In a drug diversion case that should be a wake-up call to hospitals, a former surgery technician at Rose Medical Center in Denver is headed to prison after pleading guilty to federal charges of product tampering and obtaining controlled substances by deceit.

Kristen Diane Parker injected herself with Fentanyl syringes from the hospital, refilled them with saline and returned them to anesthesia carts, in the process infecting 17 patients with Hepatitis C (as confirmed by genetic markers), according to the U.S. attorney’s office in Denver. The length of her prison sentence is up in the air after a federal judge on Jan. 20 rejected the 20 years that was part of a plea agreement between the prosecution and defense. A new court date has not been set yet.

As this and other cases demonstrate, drug diversion is ripe for compliance intervention. “There are incidents of drug diversion in every state, and every hospital at one point or another has had an incident of drug diversion,” says Crystal Berumen, director of the patient safety initiative at the Colorado Hospital Assn.

Unfortunately, “this area doesn’t get much attention until something bad happens,” says David Yarin, a director in the health care disputes and investigation practice at Navigant Consulting.

Drug diversion is serious business for “registrants,” which are hospitals and other entities and individuals with a DEA registration number. “All registrants must have effective controls to prevent and detect diversion,” says Supervisory Special Agent Gary Boggs, executive assistant to the deputy assistant administrator for the DEA Office of Diversion Control. Registrants must inform the DEA of any controlled-substance thefts (using Form DEA-106). “Failure to make such a report may result in a civil fine of up to $10,000 per occurrence,” Boggs informed RMC.

Urgency for more oversight has grown since hospital pharmacies embraced technology for dispensing drugs on hospital floors, which, ironically, was designed to enhance security. “What has happened over the past four years has changed things,” Yarin says. “There used to be a lockbox and a paper log. Now there is physical security and an audit trail.” Most hospitals have automated dispensing units (ADUs) on every hospital floor and/or department (e.g., intensive care unit). These mini-pharmacies, which are stocked by pharmacists, open only after an employee enters an identification number and password. “You have to have a second person with you, and both people have to put in their identification numbers before the medicine will come out,” says Randall Brown, senior corporate compliance consultant for Baylor Health Care System in Texas.

The downside is that ADUs have given people a false sense of security, he says. Technology in a vacuum isn’t useful; “you need someone to mine and analyze the data that the ADUs collect,” notes Laurie Radler, compliance officer at Lenox Hill Hospital in New York City. “And you still have to validate it against actual patient medication records.”

For example, hospitals need policies and procedures to investigate variances. “If the system says there should be a count of three [pills] but there are none, someone has to ask why. If you let it go on too long, it’s hard to reconcile what went on six months later,” Yarin says. It’s gotten so challenging, Radler adds, that some people in the industry are talking about designating a separate hospital pharmacy compliance officer. The problem is finding the money for it.

Providers Must Report Drug Diversions

Reporting drug diversion to the DEA doesn’t always end in a public-relations debacle. Yarin helped one medical center unravel a drug diversion mystery, which was appropriately reported to the DEA but ultimately was resolved without federal agents knocking down doors. The medical center had what DEA calls a “significant discrepancy” in its inventory of controlled substances. “Someone on one floor identified a variance they couldn’t reconcile,” Yarin says.

As the investigation progressed it became clear there were additional irreconcilable variances. There were lax controls for investigating variances on a regular basis, he says. Some employees left; new controls were implemented to ensure pharmacists routinely reviewed data generated by the ADUs and tracked down the reasons for variances, using the compliance officer as a resource. “But the DEA never sent in agents,” Yarin says. “The client avoided a public disaster.”

It’s the job of a hospital pharmacist to design policies and procedures to prevent and detect drug diversion and to analyze ADU data. “The pharmacist, by virtue of his license, is responsible for making sure policies and procedures are in place to prevent drug diversion. But it’s the compliance officers who, by virtue of their understanding of good controls and how to investigate [potential wrongdoing], should become consultants to pharmacists on developing effective controls and investigating variances,” he says.

Yarin suggests that compliance officers meet with pharmacists to discuss their measures to prevent and detect drug diversion. For example:

• Ask the hospital pharmacist to describe policies and procedures designed to prevent drug diversion.
• Ask how the pharmacist audits for drug diversion. For example, does he or she review daily variance reports from the ADU? The compliance officer should audit a sample of ADU reports and variances as part of the annual compliance plan.
• Ask what happens when the ADU kicks out a report of a discrepancy. Does the pharmacist doggedly track it down? Does he or she physically inventory the drugs in that particular ADU? If Nurse Ratchett says she only took two Oxycontins for her patient but actually removed four, does the pharmacist open an investigation with the input of compliance? Yarin recommends establishing “frequent, consistent inventory counts because that’s the best way to pick up when something is off.”
• Discuss oversight for disposing of unused drugs that can’t be returned to the pharmacy, a practice known as wasting. Pharmaceutical manufacturers package some medications in greater doses than will be administered to certain patients, and controlled substances can’t be thrown out in the regular garbage, Yarin says. “ADUs have a built-in wasting bin and a second nurse should be present for the wasting,” he notes.
• Ask whether the pharmacist is tracking any unusual volumes of wasting. “When people are reporting a lot of waste, you have to ask why,” Yarin says. “Wasting can be a popular cover for diversion.”
• Find out what the hospital pharmacist does to train people on drug diversion. Does he or she attend staff meetings? Have employees been trained on wasting?
• Find out how many employees or physicians have “super user” status. ADU super users can do overrides, Yarin says. That means they can essentially make a variance disappear, issue passwords and change user names. A super user who becomes addicted to narcotics is a danger.
• Check whether controlled substances are delivered to hospital departments in a secure manner.

Brown notes that diversion can occur in the pharmacy as well. If that happens, “it would probably involve expired medications,” he says. Expired meds should be destroyed, though some can be returned to the manufacturer for credit, Brown notes.

To improve the ability of hospitals to prevent and detect drug diversion, a Colorado Hospital Assn. task force is developing best practices in this area, Berumen says. They are due out late this year. “We are trying to learn from everyone’s experiences,” she says. The remedies aren’t easy; after all, Berumen notes that Rose Medical Center had sophisticated electronic systems in place to prevent drug diversion, but Parker still managed to wreak havoc. People who divert drugs unfortunately can be “innovative,” Berumen notes.

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