Drug Diversion Still a Serious Compliance, Patient Safety Issue
September 1, 2025
By Gregory Freeman
Executive Summary
The theft and misuse of drugs continues to be a serious problem in healthcare facilities. Risk managers should ensure there is a comprehensive program to detect drug diversion and respond appropriately.
- Healthcare organizations risk serious consequences from drug diversion, including fines and loss of the Drug Enforcement Administration license.
- Healthcare leaders often underestimate the extent of drug diversion in their facilities.
- Prevention programs should be multidisciplinary.
Drug diversion remains as big a problem in healthcare organizations as ever, threatening the safety of patients and quality of care provided by impaired clinicians. Addressing the problem will require a comprehensive effort from risk managers and medical leaders.
The latest State of Drug Diversion survey report from Wolters Kluwer Health calls drug diversion the “elephant in the hospital room.”
“Despite increased investments in personnel and training, four out of five (81%) healthcare leaders believe drug diversion continues to occur, with many incidents remaining unreported,” the report says. “The findings reveal a landscape where technology, culture, and resource allocation play pivotal roles in prevention and detection efforts.”
Drug diversion is a sensitive topic that no one wants to talk about, says Karen Kobelski, vice president and general manager for clinical surveillance, compliance and data solution with Wolters Kluwer Health in Verona, WI.
“It remains a persistent and underestimated risk in healthcare, yet many hospitals and health systems still lack unified strategies to detect and address these behaviors effectively,” she says. “The survey data highlights notable gaps in departmental alignment and the adoption of innovative technologies like artificial intelligence (AI). Our hope is that, with these findings in hand, stakeholders can educate and foster dialogue within leadership and across the organization to adopt a more proactive approach to drug diversion detection.”
The report is based on a survey of nurse leaders, pharmacists, risk managers, and drug diversion program leaders. These are some of the key findings:
- Four out of five (81%) respondents believe drug diversion incidents remain underreported.
- Only 33% of respondents are “very confident” in their program’s effectiveness.
- Organizations are not realizing the full benefits of available drug diversion technology.
- Current reliance on traditional, often manual, audits leaves room for undetected diversion.
- While only 40% of respondents use artificial intelligence tools today, 76% express a desire to incorporate advanced analytics for better oversight.
- Cultivating ownership across different functions is critical to address gaps. Departments like anesthesiology and human resources (HR) remain underrepresented despite being identified as critical stakeholders in effective diversion prevention.
- Only about one-third of respondents say anesthesiology is represented in their drug diversion programs despite it being a major risk area.
- Full-time employee (FTE) commitment has grown significantly — most respondents only reported dedicating 0.25 FTEs in 2023 compared to three FTEs in 2025.
(The full report is available online at http://bit.ly/4mlFAza.)
$308,000 to Settle Drug Diversion Case
In 2022, the attorney general of Connecticut announced that Yale University, on behalf of Yale Medicine and the Yale Fertility Center, had entered into a civil settlement agreement with the federal government to pay a total of $308,250 to resolve allegations that it violated civil provisions of the Controlled Substances Act.
The Yale Fertility Center is a fertility medical practice located on Yale University’s West Campus, in Orange, CT. “The settlement resolves allegations that Yale failed to maintain complete and accurate records concerning the controlled substances it purchased and dispensed at the Yale Fertility Center and failed to provide effective controls and procedures to guard against theft and diversion of controlled substances,” the attorney general reported.
The announcement says that, in November 2020, nurse Donna Monticone, who was responsible for ordering and inventorying controlled substances at the Yale Fertility Center, was discovered to have tampered with vials of fentanyl.
“The fentanyl was kept at the Yale Fertility Center for patient use during out-patient surgical fertility procedures. A criminal investigation revealed that Monticone stole the fentanyl for her own use,” the announcement says. “She withdrew the fentanyl from the vials, reinjected saline into the vials and reintroduced the vials into the stock of the Yale Fertility Center to be used during surgical procedures.”
Monticone pleaded guilty in federal court to tampering with a consumer product.
“A related civil investigation identified 685 separate occasions in which the record-keeping requirements of the Controlled Substances Act were allegedly violated by Yale. The DEA’s (Drug Enforcement Administration’s) audit of the Yale Fertility Center’s inventory of controlled substances revealed discrepancies of 665 units of controlled substances, including vials of fentanyl 100 mcg, ketamine 10 mg, and midazolam 2 mg,” the attorney general reports. “The investigation also found that Yale failed to maintain an initial inventory, failed to keep a record of destruction of controlled substances, and was unable to readily produce DEA e222 forms, which are required records for purchase and sale of Schedule II controlled substances.”
Might Be Missing Something
Many facilities have diversion detection programs but do not perceive any serious problem, Kobelski says. The truth may be that changing behaviors and opportunities for diversion of high-risk medications are going undetected, she says.
“The interesting thing about the report is how much people still believe that it is such a widespread problem, but they don’t believe that they actually have necessarily put all the tools and processes in place to address it effectively,” she says. “So, you know that there’s a problem, but there is this big gap between making sure that you’re actually tackling it from a process and a technology perspective. It’s been eye-opening for me just to realize how much is uncovered.”
AI and other technology can help address drug diversion, but the solution also must align people resources, Kobelski says. The problem cannot be addressed by just one department and needs a multidisciplinary effort across the healthcare organization, she says.
“There are so many gaps across process, people, and technology that have to be met, and not everybody is aligned. It is a tough challenge, but I think we’re making progress in tackling this, and with much more progress recently because of AI,” she says. “AI can actually go beyond what traditional methods used to be, which was literally just looking for missing drugs. AI can really detect patterns of behavior. The drug may not be missing, but it can detect evidence indicative of a pattern that someone else used to divert medication, whether they’re substituting something that looks like a drug, putting water in instead of fentanyl, things like that. AI can detect that much better than just looking for something in a missing drug framework.”
Drug diversion happens across the whole supply chain, from the time you order it from a wholesale seller, to being received at the dock, to being put in a cabinet, to being delivered to a specific unit and finally to a patient, Kobelski says.
“You have to think holistically about not only the whole supply chain, but you also have to think about making sure you cover all the departments, not just nursing or not just pharmacy. You have to think about anesthesiology,” she says. “You have to think about some of your outpatient clinics where you’re distributing controlled substances. When you put a program together like this, you are thinking about all of the people who might be potentially impacted or involved in the risk of drug diversion.”
There should be some sort of executive sponsor that has responsibility for the entire set of departments in a health system, she says. That often has been the chief pharmacy officer because they have the DEA license, she says, and there are many more obligations for reporting when you have a DEA license.
“But, ultimately, it really should be broader than that, and you have to have that buy-in from all those individual stakeholders. So, you know, what we’ve seen effective programs do is actually put together a committee that has leadership from all the affected departments,” Kobelski says. “That includes HR, risk management, and compliance. It includes anesthesiology, nursing, pharmacy.”
The program needs to start with employee training, helping people understand what drug diversion looks like, making sure that is the core part of the curriculum, she says. It also is important to define how investigations and interviews will be conducted and the consequences for drug diversion.
“This is an area that is very sensitive for hospitals. Nobody wants to believe that an employee of theirs is doing this, but everybody’s vulnerable to substance abuse, so you need to proactively create the steps that you will take when someone is potentially suspected of diverting medication and making sure you handle that in a consistent and fair way,” Kobelski says. “It starts with having an executive sponsor, having all the stakeholders for the hospital involved, putting consistent processes and procedures together, having training, and then having the technology that can knit that all together so that everybody has a single source of truth for your drug diversion program.”
Depending on the seriousness and the systemic nature of drug diversion, it could result in an organization losing their DEA registration, says Jacob Harper, JD, partner with the Morgan Lewis law firm in Washington, DC.
“If you are a pharmacy or a hospital or other kind of healthcare provider that’s working with these kinds of substances daily, that basically is the end of the organization. That’s obviously a very, very draconian penalty at that point, but it still exists, and something that healthcare providers need to be aware of,” Harper says. “There is also the imposition of monetary penalties and fines in the hundreds of thousands of dollars range from an administrative standpoint. There are also potentially criminal penalties. That involves more systemic intentional conduct, but DEA is frequently tasked with working with local police to identify and support the resolution of cases where an individual typically is diverting medication from a healthcare facility.”
There is the theoretical risk of patient suing for the pain or other negative effects of not receiving diverted drugs, Harper says. More likely is that providers participating in Medicare risk survey by Centers for Medicare and Medicaid Services after drug diversion investigations or penalties.
“Medicare will, oftentimes, as a result of a state complaint or a DEA action, also undertake a survey of the healthcare facility. They have identified situations where patients (did not have) medications that they need, or even if the patient didn’t need a medication, but it was prescribed to them,” Harper says. “They will assert that it was a patient’s property and, therefore, assert that there’s been some kind of elder abuse type of circumstance.”
Drug diversion can be subtle at first — a behavior change, withdrawal, or rationalization — but it inevitably develops into a dangerous pattern, says Nick Bach, PsyD, a psychologist in Louisville, KY.
Auditing should be done regularly on medication handling, especially in high-risk areas, such as surgery, oncology, and intensive care, he says.
“In the instance of closed-loop controlled substances, forensic-style anonymous reporting mechanisms and cross-departmental monitoring will catch signs even before they spiral out of control,” Bach says. “A healthcare leader can ensure that supervisors are trained to observe psychological indicators, including sudden defensiveness, frequent restroom breaks, or over-volunteering for medications in the staff. That’s an open invitation to all kinds of malpractice lawsuits, license sanctions, civil penalties, and even criminal liability when a facility ignores such signals.”
Courts will hold them to the standard of a reasonable healthcare provider to prevent foreseeable harm due to diverts, Bach says.
“In addition to diverting drugs with injury or overdose occurring to the patients, a facility may incur loss of public trust, payment issues with Centers for Medicare and Medicaid Services, stricter scrutiny from accreditors, and the like,” Bach says. “No policy can ever be 100% effective, but a culture of openness, early intervention, and system checks creates a much more resilient environment.”
Greg Freeman has worked with Clinican.com and its predecessor companies since 1989, moving from assistant staff writer to executive editor before becoming a freelance writer. He has been the editor of Healthcare Risk Management since 1992 and provides research and content for other Clinician.com products. In addition to his work with Clinician.com, Greg provides other freelance writing services and is the author of seven narrative nonfiction books on wartime experiences and other historical events.
Sources
- Nick Bach, PsyD, Louisville, KY. Email: [email protected].
- Jacob Harper, JD, Partner, Morgan Lewis, Washington, DC. Telephone: (202) 739-5260. Email: [email protected].
- Karen Kobelski, Vice President and General Manager for Clinical Surveillance, Compliance and Data Solution, Wolters Kluwer Health, Verona, WI. Telephone: (425) 451-4063.
Drug diversion remains as big a problem in healthcare organizations as ever, threatening the safety of patients and quality of care provided by impaired clinicians. Addressing the problem will require a comprehensive effort from risk managers and medical leaders.
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