The University of Michigan Hospital System will pay the United States $4.3 million as part of a legal settlement after UMHS allegedly violated certain terms of the Controlled Substances Act, according to a press release from the United States District Court — Eastern District of Michigan. 

The Controlled Substances Act is the statute establishing federal drug policy, under which the manufacture, importation, possession, use and distribution of certain substances, including certain narcotics, stimulants, depressants and other drugs, is regulated.

This settlement is the largest in the nation for allegations of drug diversion at a hospital setting.

“At Michigan Medicine, we take these issues very seriously and are always in the business of improving what we do,” Michigan Medicine Communications Representative Beata Mostafavi wrote in an email to The Daily on behalf of Michigan Medicine. “We were not where we needed to be as a regulatory matter and, equally important, as measured against our own high standards.”

The Drug Enforcement Administration’s investigation of UMHS’s management of controlled substances was conducted following two incidents where UMHS employees, one nurse and one anesthesiology resident, overdosed on opioids, including fentanyl, at a UMHS facility. One of the incidents was fatal.  

“Following its investigation, DEA concluded that a number of the hospital's practices concerning controlled substances were in violation of the CSA,” according to the court's release. “For example, UMHS failed to secure DEA registrations for 15 off-site ambulatory care locations throughout Ann Arbor and Southeast Michigan, each of which received narcotics from the main hospital's pharmacy and dispensed them to patients.”

The University's violations also include several significant recordkeeping violations. 

“We’ve made multiple, substantial improvements to our pharmacy and controlled substance processes over the last several years and expect to continue those efforts in the future,” Beata wrote.

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