Hospital of Salem County Reaches $1 Million Settlement on Mishandling of
September 26, 2002
Memorial Hospital of Salem County, New Jersey reached
a settlement that requires the not-for-profit hospital to pay a civil
penalty of $1 million for violations in the management of its inventory
of controlled substances, U.S. Attorney Christopher J. Christie
The Drug Enforcement Administration commenced an
investigation in May 2002 after uncovering irregularities in the
hospital's accounting for controlled substances. Many violations of DEA
regulations were found, including failures to report thefts or losses of
controlled substances such as Demerol and Percocet; failures regarding
security controls for controlled substances; failures to properly
account for disposal of controlled substances; failures to properly
inventory controlled substances; failures to keep records of controlled
substance orders; and, failures to keep records regarding receipt and
dispensing of controlled substances in the hospital.
The hospital has paid the $1 million penalty.
In negotiating the settlement, the U.S. Attorney's
Office recognized several important factors that will have a positive
affect on patient-care and the surrounding community. Memorial Hospital
has demonstrated to the DEA that it has instituted substantial
improvements to ensure compliance with all regulations. Additionally,
the Hospital has disclosed to the U.S. Attorney's Office that it will
close a deal whereby its assets will be sold to Salem Hospital
Corporation, a New Jersey business corporation wholly owned by
CHS/Community Health Systems, Inc., a Delaware corporation. The proceeds
of this sale will be distributed solely to projects benefitting the
Hospital's local community.
"While the seriousness of the hospital's infractions
can not be overlooked, the resolution is good for all concerned,
including the community," Christie said.
Christie credited Special Agents with the DEA at its
Camden Resident Office, under the direction of Special Agent in Charge
Anthony Cammarato, with investigating the case.
The case was handled by Michael A. Chagares, chief of
the U.S. Attorney's Office Civil Division in Newark.