Poor data and coordination between regulatory agencies contribute to hospital drug thefts, experts say

By Kaylee Tornay / InvestigateWest

The news out of Medford, Oregon, in December 2023 was explosive: A nurse in the intensive care unit of a local hospital had reportedly stolen patients’ intravenous fentanyl and replaced it with unsterile tap water for months. Dozens of patients developed infections. At least three died.

But it wasn’t the first time Asante Rogue Regional Medical Center had discovered an employee stealing narcotics.

A pharmacy technician stole drugs from the hospital from August 2016 through July 2017, according to a disciplinary order from the Oregon Board of Pharmacy. The board found Asante Rogue Regional hadn’t adequately secured the drugs or supervised the technician. 

The board imposed a $20,000 penalty, but the hospital got to pay just $5,000 for complying with board-approved plans to fix the pharmacy’s issues over the next three years. 

Six years later, the hospital faces an $11.5 million lawsuit over the most recent drug thefts. More suits are expected, as attorneys say they have been approached by dozens of former patients so far. The families of at least three patients who died have said the hospital notified them their loved one’s fentanyl was likely replaced. 

The cases at Asante Rogue Regional illustrate the breakdowns of accountability at the heart of what experts call “drug diversion” — the theft of opioids and other controlled substances by health care workers from medical facilities. There is no good data on the scope of the problem, but researchers estimate that as many as 1 in 10 health care workers have stolen drugs.

The system of oversight and discipline has not kept pace with the crisis, experts say. The patchwork of state, federal and professional regulators to which hospitals are required to report drug diversion rarely share information among themselves. The Drug Enforcement Administration, which investigates “significant” drug losses and thefts, is under no obligation to share information with state agencies. State regulatory boards such as the Board of Nursing and Board of Pharmacy may share relevant information with federal agencies or one another but haven’t always done so. As a result, none has tracked every incident of drug theft in Oregon.

Disciplinary actions are often limited, providing little leverage to enforce change. And hospitals frequently take prevention more seriously only after high-profile incidents that involve criminal charges, multimillion-dollar settlements or both, experts say.

“This is the occupational hazard of our industry that nobody talks about,” said Rodrigo Garcia, a nurse-anesthetist, speaker and advocate who co-founded a substance use disorder treatment center for health care workers after diverting opioids himself more than a decade ago. “There are a lot of incentives to keep this quiet.”

Garcia and two other experts said the problems aren’t just tied to government standards and regulators, but that professional accrediting agencies also fail to motivate hospitals to be more proactive.

To learn more about drug diversion incidents in Oregon, InvestigateWest searched for public orders from the Board of Pharmacy against any of the 63 hospitals currently licensed by the Oregon Health Authority. The board oversees hospital and community pharmacies in Oregon, and also manages the licenses of pharmacists and pharmacy technicians.

InvestigateWest found that only six of those hospitals had faced discipline over confirmed or potential drug diversion in the last two decades. Each had to comply with quality assurance plans for at least a year, but the penalties they faced were sometimes less than the value of the drugs stolen.

That is far from a complete picture of how often drugs have been stolen from Oregon hospitals. For example, several facilities where the state Board of Nursing had disciplined a nurse for diverting drugs had no disciplinary history with the Board of Pharmacy.

This siloing of agencies is not unique to Oregon, according to experts.

“There’s no national database that collects this information that you can find,” said Charlie Cichon, executive director of the National Association of Drug Diversion Investigators. “Every state is different as far as sanctions, and investigations are often never public. You may never find out about it.”

Amid that data vacuum, drug theft from health care facilities is rarely addressed through public policy. Instead, advocacy groups have been pushing hospitals to take more preventative steps. Those steps can range from increasing drug security and audits of their own processes to offering tangible support for health care workers struggling with substance use disorders.

Accrediting agencies and federal and state regulators could take on more active roles in enforcing their own standards, experts said.

“Maybe this is the kind of tragic case that is going to make somebody reach out to senators of Oregon and say, ‘Hey look, this is something that needs to be done,” said Larry Houck, a former investigator with the DEA who now represents hospitals facing discipline over drug diversion. “‘It’s a national problem — this happened in our state, and this is something that you should take on.’”

Scant data, scattered oversight

As the state’s Medicaid and Medicare administrator, the Oregon Health Authority is charged with enforcing health care facilities’ compliance with federal standards, which include keeping controlled substances locked away and maintaining accurate records of where every dose goes.

A multimillion-dollar lawsuit has been filed and police are investigating allegations that a nurse repeatedly stole narcotics prescribed for patients and replaced them with tap water at Asante Rogue River Medical Center in Medford, Oregon. (Rogue Valley Times)

But when asked about the 2017 drug theft at Asante Rogue Regional, a spokesperson confirmed that the agency had no record of the incident. Unlike the Board of Pharmacy, it likely never received a report.

Neither federal nor state law requires hospitals to report drug diversions or other possible violations of Medicare or Medicaid standards to the health authority, except if they result in certain kinds of infections, said Anna Davis, a manager with the agency. Her team receives most of its reports from patients, she said.

Davis’ team did receive a complaint about the latest drug theft allegations at Asante, said spokesperson Jonathan Modie, and the agency investigated “in a timeframe that reflected both the seriousness of the allegations and our staff capacity to conduct an investigation of that size and complexity.”

“From the information we had received, we knew that the hospital had already taken steps to identify the problem and remediate the situation,” Modie said.

But the Oregon Health Authority’s picture of how often drugs have been stolen from hospitals is incomplete. Licensing boards that oversee nurses, doctors and pharmacists are allowed to provide information related to “the regulatory or enforcement functions” of another public agency but are not obligated to do so, according to a Board of Pharmacy spokesperson.

This lack of data persists nationally. In recent years, the National Association of Drug Diversion Investigators and a handful of other organizations have banded together to try to track the problem across the country, forming a group called HealthcareDiversion.org. Its database draws on news reports and press releases from the Drug Enforcement Administration. Members of the public can also make reports to the organization. 

“The sooner a pattern of diversion is detected, the sooner organizations can intervene to mitigate future incidences of diversion,” the website states. 

The Board of Pharmacy’s disciplinary orders shed light on some drug theft in Oregon hospitals. 

InvestigateWest found that five hospitals in addition to Asante had faced discipline over drugs that were stolen or simply unaccounted for in the last two decades. The facilities span the state, from Good Samaritan Hospital in Corvallis to Good Shepherd Medical Center in Hermiston. 

In some cases, the hospital discovered drugs were stolen and reported it to the pharmacy board in accordance with state law. In others, the facility found evidence that a dose of a narcotic had been tampered with, and the board, after investigating, found security vulnerabilities that violated state laws. 

In addition to any penalties they face, hospitals have to submit improvement plans to fix the issues the board identifies, submitting regular updates for a few years.

Penalties can vary widely depending on the severity and frequency of the violations. St. Charles Medical Center in Bend faced the most severe discipline, InvestigateWest found, including a three-year probation with the potential for its license to be revoked if any violations occurred during that period. 

The executive director of the Board of Pharmacy declined to discuss the details of individual investigations, citing confidentiality rules. A spokesperson said that generally, the board weighs a variety of factors when deciding what discipline to impose, including “the facts of the case, aggravating/mitigating factors, past licensee discipline, past board decision in similar circumstances (if any).”

Meanwhile, other regulatory boards in Oregon, such as the Medical Board, which licenses physicians, and the Board of Nursing, only have oversight of individual licensees and not the facilities where they work. 

The DEA, which enforces the Controlled Substances Act, requires hospitals to report theft or significant losses of controlled substances, which can sometimes trigger an investigation. But Garcia said he’s seen plenty of cases where hospitals simply fire the professional without making any report to the DEA.

Even when the agency receives a report, Houck said, it may not have the resources to investigate every one in detail. Investigations may come only after patients or health care workers have already been harmed.

To avoid the loss of their DEA registration in those cases, hospitals can wind up paying millions of dollars in civil penalties. They also enter into agreements to fix the deficiencies that led to injuries or deaths. 

“The bottom line is patient health, but also some of the cases … showed that there have been a number of employees who overdosed and died, so it’s also your employees’ health. It’s your public image,” Houck said. “There’s just so much involved, that if you don’t do what you need to do, it’s pretty costly.”

Discipline preceded disaster

To resolve the Board of Pharmacy’s discipline in 2017, Asante Rogue Regional added security cameras to the pharmacy area, improved staff training on security protocols,  and tracked its compliance with the state’s rules on ordering, storing, and taking inventory of controlled substances. 

It’s not clear what other prevention measures the hospital may have put in place outside of the pharmacy. Asante declined an interview request for this story.

Most details of the more recent drug thefts remain unconfirmed while investigations are ongoing. The Jackson County District Attorney’s Office is reviewing a months-long police investigation to determine whether to bring criminal charges against the nurse who allegedly swapped the fentanyl. 

The malpractice lawsuit filed in February against Asante names Dani Marie Schofield as the nurse responsible for the fentanyl swap. Schofield has not been named in any criminal action and has denied responsibility in an interview with The Lund Report. Her lawyer did not respond to a request for comment.

Schofield agreed to voluntarily suspend her nursing license in November 2023 while investigations were under way, and it expired in April.

In the lawsuit and interviews with local media, several patients and their families have shared harrowing experiences from the Asante ICU, mostly involving complications from infections. The plaintiff in the lawsuit is the estate of Horace Wilson, a 65-year-old who died after developing sepsis while recovering from a surgery removing his spleen.

Based on patient testimonials and when Asante began notifying patients, the nurse may have been replacing the fentanyl for nearly two years or more.

Garcia, who advocates for a multifaceted approach to preventing drug thefts, said the length of time that diversion continues undetected is not just a matter of logistical practices failing to catch providers in the act. It can also speak to the culture of the health care facility, and whether employees struggling with a substance use disorder feel like they can admit their problem and find support before they’re in crisis.

In his treatment program, Garcia said, “95% enter into treatment because they were caught, they got fired or they get pushed into it and are mandated to receive treatment.”

“Five percent of people will raise their hand and say, ‘This is not looking good, I need help,’” he said. “A good program is where they ask for help.”

Improvements require investments

Health care facilities are unlikely to be able to prevent all drug theft, but they can improve their abilities to stop it as soon as possible, Houck and Cichon said.

“If somebody’s diverting, and you have a granular record-keeping and an inventory accountability system in place, you’re going to find that, and not have somebody do it for a long period,” Houck said. “I’ve always said there is no system that is not able to be compromised by someone. But it’s just a matter of how long they’re able to do it.”

Houck pointed to settlements between the DEA and hospitals as reference points for how hospitals can improve. Those steps can range from mandatory random drug testing of employees to setting up security cameras at all places where drugs are dispensed. Other hospitals are required to do physical inventories “more frequently than required by law.”

Much of the momentum for improvement is coming from groups like the National Association of Drug Diversion Investigators, and advocates such as Garcia.

In recent years, a handful of tech companies have stepped in to provide services to help reduce the burden on hospitals to improve record-keeping and systems that can flag discrepancies early.

Garcia, meanwhile, has his eye on independent hospital accrediting agencies such as the Joint Commission or Council on Accreditation. These organizations set their own standards for patient safety and care, which may be more stringent than the federal minimums. In addition to satisfying state regulations and carrying greater prestige, hospitals also reap the rewards of accreditation through the ability to bill insurance companies more for services. 

If stricter preventive strategies against drug diversion could be tied to accreditation, Garcia said, “That’s a big motivator.”

Agencies and policymakers could also increase the minimum standards hospitals need to follow or step up enforcement of existing standards.

The state Legislature sets state standards for health care, and it could tighten regulations, direct agencies to work collaboratively on the issue or create requirements to report violations related to drug security. 

Rep. Kim Wallan, R-Medford

Rep. Kim Wallan, R-Medford, said she hadn’t seen the state as having a role to play to help prevent an incident like the latest one at Asante Rogue Regional. But she said she was shocked to learn that hospitals may not report every loss of controlled substances to the DEA, and that they aren’t required to let the Oregon Health Authority know.

“If hospitals know drugs go missing and don’t report it, that’s a huge concern,” she said. “I’ll poke around now that you’ve asked.”

At the federal level, Congress could instruct agencies that deal with drug security and care standards, including the DEA and the Centers for Medicare and Medicaid Services, to work collaboratively to support or enforce hospitals’ compliance with federal standards. Congress has created multi-agency task forces to study pain management, mental health and substance use disorders among veterans and trauma-informed care.

“I think so many agencies are silos and they kind of work their own areas of responsibility,” Houck said. “Maybe it’s something that Congress needs to tell various agencies: ‘This is what we need to focus on.’”

Editor’s note: This story has been updated to correctly reflect that Oregon statute allows health regulatory boards to share relevant information with other agencies.


FEATURED IMAGE: There is no good data on the scope of the problem, but researchers estimate that as many as 1 in 10 health care workers have stolen drugs.

InvestigateWest (invw.org) is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. Reporter Kaylee Tornay covers labor, youth and health care issues; her most recent investigation explored the uncertain future of Oregon’s only nursing facility for medically fragile children. Reach her at 503-877-4108 or kaylee@invw.org. On Twitter @ka_tornay.