Lehigh Valley Hospital Network Agrees to Pay $2.75 Million to Resolve Allegations of Drug Theft, Diversion, and Other Controlled Substances Act Violations

PHILADELPHIA – United States Attorney David Metcalf announced today that Lehigh Valley Hospital Network, Inc. (LVHN) has agreed to pay $2,750,000 to resolve allegations that it failed to comply with provisions of the Controlled Substances Act (CSA) that are designed to prevent the diversion of controlled substances for illegal uses.

In particular, the settlement resolves LVHN’s disclosure to the United States that on approximately 40 occasions, a pharmacy technician at LVHN’s Cedar Crest pharmacy used another employee’s password to access, remove, and divert controlled substances, and created fictitious reports to hide the discrepancies of controlled substances. The settlement also resolves allegations that, at certain facilities, the controls and procedures that LVHN had in place failed to effectively guard against theft and diversion of controlled substances from its inpatient pharmacies to outpatient pharmacies and hospice facilities, resulting in the transfer of controlled substances between locations without proper documentation. LVHN also allegedly failed to maintain complete and accurate records of its stock of controlled substances.

Since the discovery of the Cedar Crest thefts, LVHN has worked cooperatively with the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Drug Enforcement Administration (DEA) to identify potential CSA violations and develop better practices to prevent further diversions, improper transfers, and recordkeeping deficiencies. To that end, LVHN has expended considerable resources on physical security enhancements, training, diversion-detection software, and the hiring of employees and consultants knowledgeable in CSA compliance.

“The U.S. Attorney’s Office is committed to aggressively combatting the opioid crisis on all fronts, including by holding hospitals and pharmacies responsible when they fail to take adequate steps to prevent controlled substances from being diverted for unlawful purposes,” said U.S. Attorney Metcalf. “In fashioning appropriate resolutions, we also give credit to DEA registrants like LVHN who act in good faith to report potential CSA violations, prevent further deficiencies, and improve compliance efforts. While the penalties here are substantial, they may have been far greater but for LVHN’s disclosures and cooperation.” 

“The Drug Enforcement Administration ensures that medical providers and facilities follow established laws and procedures while dispensing controlled substances,” said Thomas Hodnett, Special Agent in Charge, DEA Philadelphia Field Division. “DEA holds medical professionals to a high standard to protect public safety and ensure accountability, and this settlement demonstrates DEA’s resolve to maintain these standards.”

The case was handled by Assistant U.S. Attorneys Peter Carr and Charlene Keller Fullmer, and former auditor Dawn Wiggins.

The claims resolved by the settlement are allegations only and there has been no determination of liability.