Danville, VA

$4.36 million: Sovah Health enters 3rd largest hospital settlement for claims of federal controlled substance violations

Watchful Eye

Danville Regional Medical Center, known as Sovah Health—Danville, agreed to the third-largest civil penalty ever obtained from a hospital system for claims of Controlled Substances Act violations, the U.S. Attorney’s Office for the Western District of Virginia (WDVA) announced.

The $4.36 million settlement stems from Sovah Health—Danville operating in a manner that allowed employees to steal drugs from the job without detection.

In documents filed with the court on June 8, Sovah Health agreed to certain facts, including that Paulette Toller, who worked as a pharmacy tech from 2017 to 2019 stole nearly 12,900 controlled substances.

She admitted that a “loophole” in the hospital’s automated dispensing system allowed her to take hydrocodone, oxycodone and other controlled substances for her own personal use.

Each time such drugs are dispensed at the facility, a form was generated with a sequential serial number. Those forms were supposed to be signed by two witnesses and Sovah Health was required to save them. But for the medications that Toller stole, after the forms were printed, she destroyed them, the documents state.

Sovah Health--Danville agreed that “no procedure was in place to ensure the forms were not missing, and that “no full physical inventory was conducted… which would have identified Toller’s theft and diversion.”

Further, access to the pharmacy was supposed to be regulated with a key card, but “the controlled substances room door was often propped open defeating the requirement that a key card be used to access the room,” the documents also say.

Emilee Poteat was a registered nurse at the hospital. She admitted that for five months in 2020, “on a daily basis”, she tampered with fentanyl vials and hydromorphine injectables. She was stealing the active ingredients by using a syringe to take the drugs and then replace them with saline.

The hospital admitted that its employees administered this medication to patients “even after seeing signs on some of the containers of possible tampering.”

The U.S government accused Sovah Health—Danville of failing to provide effective controls and procedures to guard against the diversion of controlled substances, filling orders for controlled substances without a system in place to disclose suspicious orders of controlled substances, and failing to maintain readily retrievable records of controlled substances.

Under the non-prosecution agreement, Sovah Health—Danville agreed to pay $4.3 million within 14 business days and to be subject to a period of four years of increased compliance and oversight. If, during that time, the hospital has any failure to comply with its obligations it could be found in contempt of court and may be liable for additional monetary sanctions and injunctive relief.

In return, the U.S. agreed not to pursue civil or administrative claims against Sovah Health for the actions outlined in this case.

Employees sentenced

In August 2020, at age 60, Toller pled guilty to illegal distribution of a controlled substance and was sentenced to 13 months in federal prison.

In May 2021, at the age of 31, Poteat pleaded guilty to one count of tampering with consumer products that affect interstate commerce, one count of reckless disregard for the risk that another person be placed in danger of death or bodily injury and one count of making false statements.

WDVA said when law enforcement interviewed Poteat in May 2020, she denied tampering with any controlled substances and said she did not drink alcohol or use drugs. She denied tampering with the drugs again the following month.

Although the investigation showed she was the only one who accessed the drawer where the drugs were stored, she claimed another person used her password to gain access. Finally, after she was terminated from the job, she admitted she had a substance abuse problem, self-medicated with opioids and took the fentanyl and hydromorphone for her own use.

Poteat received a 36-month sentence.

“As opioid overdose deaths skyrocket, it is critical that health care companies are held accountable when they fail to effectively safeguard these powerful prescriptions within their facilities,” said U.S. Attorney Christopher R. Kavanaugh for WDVA.

“With opioid deaths and overdoses at record-breaking highs, especially across Southside Virginia, there must be zero tolerance of trusted health professionals engaging in drug diversion,” Colonel Gary T. Settle, Virginia State Police Superintendent, added in WDVA's statement.

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