Hospital Employee Controlled Substance Diversion Is a Topic at Upcoming IAHSS Conference

The Drug Enforcement Administration (“DEA”) and the United States Attorney’s Office for the Eastern District of California just announced that Sutter Medical Center and Sutter Fairfield Surgery agreed to pay $3.2 million to resolve allegations that they failed to effectively guard against theft and diversion of controlled substances.  The press releases note that the settlement relates to at least 628 recordkeeping and security violations of the Controlled Substances Act (“CSA”), including failure to notify DEA of the theft or loss of controlled substances.  The press releases note that DEA began investigating following the death of a pediatric anesthesiologist.

The Sutter Medical Center and Sutter Fairfield Surgery Center settlement is the latest high-profile example of a healthcare system paying millions to resolve allegations of CSA violations.  Recent diversion of significant controlled substance quantities by pharmacists, physicians, nurses, and other healthcare professionals highlight the vulnerability of hospitals and healthcare systems.  Failure to provide effective controls and procedures to guard against theft and diversion of controlled substances pose risks to a hospital’s patients for undertreatment and, worse, employees for misuse, abuse, overdose, and death.  Employee diversion from hospitals has also resulted in large civil monetary settlements, costly compliance remediation programs, and unwanted local and national publicity.

Hyman, Phelps & McNamara, P.C. Director Larry Houck is speaking on “Hospital Controlled Substance Diversion Case Studies: Cautionary Tales,” focusing on this timely topic, at the International Association for Healthcare Security and Safety’s (“IAHSS’”) Annual Conference and Exhibition in New Orleans on April 13th-15th, 2026.

Mr. Houck will address:

• How employees in other high-profile cases were able to divert significant controlled substance quantities;
• Red flags that hospitals missed;
• Safeguards for minimizing internal diversion risks; and

• Best practices for maximizing diversion detection.

Click here for information about the IAHSS 58th Annual Conference and Exhibition.