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Feds and McLaren Health reach $7.75 million settlement over drug diversion allegations

person shaking prescription pills from bottle into hand
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McLaren Health Care Corporation has agreed to pay a record $7,750,000 civil penalty to the U.S. government to resolve alleged violations of the federal Controlled Substances Act.

The civil settlement was announced earlier this week by the U.S. Attorneys for the Western and Eastern Districts of Michigan.

"This is the largest settlement involving a major health care system for drug diversion ever in the history of the United States," said Matthew Schneider, the U.S. Attorney for the Eastern District of Michigan, who announced on Thursday his plans to resign from his position at the beginning of February.

Schneider said McLaren's internal practices were so deficient that they allowed controlled substances, including opioids, to fall into the wrong hands and fuel opioid abuse.

Schneider said the civil settlement includes a three year agreement for McLaren to implement measures to meet its drug-handling responsibilities.

"This is incredibly important because, as we all know, we have an opioid crisis in our country," Schneider said.

"It's a wake up call for health care systems," said Schneider. "And credit to McLaren because McLaren has recognized that they had problems, and they needed to train their employees better. The drugs were getting stolen, and they need to train employees to watch for the thefts. They need to do a better job of auditing and tracking opioids, and they're doing that under this settlement. And that's great. That's exactly what we want."

The civil settlement arose from a years-long investigation by the U.S. Drug Enforcement Administration (DEA) into McLaren's handling of controlled substances.

In a press release, the two U.S. Attorneys' offices acknowledged "the substantial steps McLaren took in response to DEA's investigation to address problems in its handling of controlled substances."

"Our health system takes compliance very seriously and regrets any instance in which we do not meet our regulators' requirements or our own very high standards," said April Rudoni, McLaren's Interim Compliance Director, in a written statement. "From the moment the DEA's first concern was brought to our attention, we have worked diligently to strengthen protocols across our system."

The McLaren Health Care system is headquartered in Grand Blanc, Michigan, and includes 15 hospitals in Michigan and Ohio, according to its website.

Virginia Gordan has been a part-time reporter at Michigan Radio since fall 2013. She has a general beat covering news topics from across the state.
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