The US Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced a new Work Plan item on February 17, 2026, titled Implementation and Effectiveness of Nursing Home Pharmacy Service Internal Controls to Prevent Opioid Overuse, Misuse, and Diversion. The review will be conducted by the OIG’s Office of Audit Services and is currently active, with an estimated completion in fiscal year 2028.
According to the OIG, pharmaceutical services are an integral component of the care required to meet the needs of each nursing home resident. Federal regulations require nursing homes to provide pharmaceutical services, including procedures to ensure the accurate acquiring, receiving, dispensing, and administering of all drugs. Facilities must also store drugs in locked compartments, limit access to authorized personnel, and maintain separately locked, permanently affixed compartments for the storage of Schedule II controlled substances.
The OIG noted that state survey agencies cited nearly half of nursing homes nationwide for pharmaceutical services deficiencies during recent complaint and standard health inspections. In addition, more than 157,000 nursing home residents receive opioids, creating potential risk for overuse, misuse, or diversion if effective systems and procedures are not in place.
Through this work plan item, the OIG will determine whether selected state agencies ensured that nursing homes: (1) complied with federal and state pharmacy service requirements intended to prevent opioid overuse among Medicaid and Medicare residents, and (2) implemented effective internal controls to prevent the misuse or diversion of opioids.
Compliance Perspective
Issue
Federal regulations require nursing homes to provide pharmaceutical services that ensure the accurate acquiring, receiving, dispensing, administering, and monitoring of all medications, including maintaining locked storage, restricted access, and separately secured Schedule II controlled substances. Given the significant number of residents receiving opioid medications, facilities must implement effective internal controls to prevent overuse, misuse, and diversion through proper assessment, monitoring, documentation, reconciliation, and disposal processes. Failure to maintain strong oversight of opioid management may result in survey deficiencies, enforcement actions, civil monetary penalties, and increased liability exposure.
Discussion Points
- Review policies and procedures related to pharmaceutical services, with particular focus on opioid prescribing oversight, medication reconciliation, storage of controlled substances, shift-to-shift narcotic counts, discrepancy resolution, documentation practices, and disposal processes. Ensure policies clearly define staff responsibilities and align with federal and state requirements. Consider whether an external compliance or mock survey review may help identify vulnerabilities in pharmacy services and controlled substance management before they become survey findings.
- Train appropriate staff on regulatory requirements related to pharmaceutical services and controlled substance management. Education should reinforce appropriate assessment prior to opioid initiation, ongoing monitoring for effectiveness and adverse consequences, documentation expectations, and timely reporting of discrepancies or concerns. Staff should understand both the clinical and regulatory implications of opioid overuse, misuse, and diversion. Med-Net Academy offers the course Drug Diversion: What Every Nursing Facility Needs to Know, which covers commonly abused prescription medications, warning signs of staff substance use disorders, indicators of possible drug diversion, and steps staff can take to prevent and respond to diversion incidents.
- Periodically audit controlled substance processes to verify that storage requirements are met, access is appropriately limited, narcotic counts are accurate, discrepancies are promptly investigated, and documentation supports appropriate opioid use. Audits should also evaluate prescribing patterns and monitoring practices. Facilities may benefit from incorporating pharmacy services and controlled substance management into their broader compliance or mock survey activities, or from engaging an experienced consultant to perform targeted reviews and assist with corrective action planning when gaps are identified.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*