What Happened
Cheshire Medical Center (CMC) in Keene, New Hampshire agreed to pay $2 million — one of the largest hospital drug diversion settlements in the country — after a nurse stole dozens of intravenous fentanyl bags and a follow-up audit found thousands more controlled substance units missing.
DEA began investigating after a nurse stole twenty-three fentanyl IV bags from an automatic dispensing machine, a theft CMC disclosed to DEA in February 2022. CMC later reported that an additional 634 bags of fentanyl were unaccounted for; the nurse involved died on March 3, 2022. When DEA investigators audited eight controlled substances at CMC's inpatient pharmacy in April 2022 — including fentanyl vials, IV bags, midazolam, lorazepam, hydromorphone, and morphine — they found 17,961 additional missing units and recordkeeping deficiencies, including a failure to regularly review reports for possible diversion or to flag sharp month-over-month increases in controlled substance purchasing.
The civil settlement, resolving CSA recordkeeping violations, was announced June 22, 2023, alongside additional security and recordkeeping measures CMC agreed to implement.
What Went Wrong
- An initial theft uncovered a much larger, hospital-wide gap. One nurse's 23 stolen bags led to the discovery of nearly 18,000 additional missing units across eight different controlled substances — the initial theft was a symptom, not the whole problem.
- Purchasing spikes weren't reviewed. DEA specifically found CMC lacked structures to flag greatly increased month-over-month controlled substance purchasing, a classic early indicator of diversion or loss.
- Routine diversion-monitoring reports weren't reviewed regularly. The hospital had reporting tools available but, per DEA's findings, was not using them consistently to look for possible diversion.
How It Could Have Been Prevented
- Review controlled substance purchasing trend reports monthly, with a defined threshold that triggers investigation when purchasing spikes without a corresponding clinical explanation.
- Assign a named individual or team responsible for reviewing diversion-monitoring reports on a fixed cadence, with documented sign-off.
- When one theft is discovered, immediately expand the audit scope to other high-risk drugs and units rather than treating it as an isolated incident.
- Maintain accurate, reconciled purchase and dispensation records across all controlled substances, not just the drug involved in an initial incident.
Related Guidance
- Analytics Dashboard Guide — Purchasing trend and KPI benchmarks that catch hospital-wide gaps.
- Investigation Playbook — Expanding an audit scope after an initial diversion discovery.
- Regulatory Guide — DEA recordkeeping and reporting obligations for hospital pharmacies.
- Hospital Self-Assessment Checklist — Hospital self-assessment, 8 sections and 63 weighted items.