What Happened
Prisma Health Midlands in Columbia, South Carolina agreed to pay a record $1 million — the largest Controlled Substances Act settlement in state history — after a joint DEA and U.S. Attorney's Office investigation into its recordkeeping and dispensing practices.
The investigation began in November 2018, after two Prisma patients were arrested for distributing drugs that the government alleged they were able to obtain in part through Prisma's pharmacy. Investigators found that Prisma failed to notify DEA within one business day of thefts or significant losses of controlled substances over a three-year period, as required of DEA registrants, and that it filled prescriptions lacking a legitimate medical purpose for the two patients who later pleaded guilty to federal drug distribution charges.
The civil settlement, announced April 5, 2022, resolved the allegations without an admission of liability by Prisma.
What Went Wrong
- Theft and loss reporting lagged for years. A three-year pattern of missed one-business-day reporting deadlines points to a systemic gap in the hospital's loss-reporting workflow, not an isolated lapse.
- Prescription red flags went unresolved. Filling prescriptions for patients later convicted of distributing the same drugs suggests pharmacy staff either missed or did not act on clear warning signs.
- The problem surfaced through law enforcement, not internal audit. The investigation was triggered by unrelated arrests of the patients themselves, not by Prisma's own compliance monitoring.
How It Could Have Been Prevented
- Build a hard deadline tracker for DEA theft/loss reporting (DEA Form 106) so the one-business-day requirement cannot lapse unnoticed.
- Train pharmacy staff to recognize and document resolution of prescription red flags before dispensing, with a clear escalation path when red flags can't be resolved.
- Run periodic internal audits of high-volume controlled substance prescribers and patients as a standing compliance function, not only after external triggers.
- Establish a compliance committee with authority to halt dispensing for patients or prescribers under active review.
Related Guidance
- DEA Form 106 Guide — Significant loss reporting deadlines and requirements.
- Regulatory Guide — DEA, state board, and PDMP compliance obligations.
- 15 Red Flags of Drug Diversion — Prescription-level red flags pharmacies must resolve before dispensing.
- Hospital Self-Assessment Checklist — Hospital self-assessment, 8 sections and 63 weighted items.