Healthcare facilities should pay close attention to the Model Addressing Drug Diversion in Healthcare Settings Act, published by the Legislative Analysis and Public Policy Association in February 2026. While this is model legislation rather than enacted law, it gives healthcare leaders a practical preview of the compliance framework states may begin adopting around drug diversion mitigation, reporting, workforce response, and facility accountability.
According to LAPPA’s official overview, the Act addresses nine core areas: written policies and procedures, mandatory reporting, alternative-to-discipline programs, legal protections for reporters, immunity, penalties for facilities that fail to act, reporting and audit requirements, technology grants, and funding provisions.
You can review the official LAPPA overview here:
Model Addressing Drug Diversion in Healthcare Settings Act
This is the first article in Rxpert Solutions series breaking down the new Model Addressing Drug Diversion in Healthcare Settings Act, with a focus on the operational, compliance, and contract issues healthcare facilities should be reviewing now.
For healthcare executives, compliance teams, pharmacy leaders, HR teams, and legal counsel, the message is straightforward: this is an early-warning signal. Organizations that begin reviewing policies, contracts, reporting workflows, and diversion mitigation systems now will be in a far stronger position than those that wait for a state bill to appear.
Start with a clear diversion risk picture.
If your organization hasn’t conducted a recent diversion risk review, now is the time.
→ Request a Free 30-Minute Drug Diversion Risk Assessment
What Is the 2026 Model Addressing Drug Diversion in Healthcare Settings Act?
The Act is not a narrow guidance memo. It is a full model-law framework designed for state adoption and adaptation. Its purpose section makes clear that it is intended to require healthcare entities to establish policies and procedures for prevention and detection, require reports related to diversion and impairment, require boards to establish or participate in alternative-to-discipline programs, create legal protections, establish penalties, require audits and reporting, create technology grants, and establish funding provisions. Section II (PDF pp. 5–6) lays out that framework directly.
That matters because many organizations still treat diversion as a limited operational issue. This model points toward something much broader: a compliance structure that connects facility policies, regulatory reporting, staffing relationships, treatment pathways, documentation, and enforcement.
Readers who want the full source text can also review the official PDF here: Read the Model Act PDF.
Which Healthcare Facilities Could Be Affected?
The Act defines healthcare entity broadly. That definition includes hospitals, clinics, nursing homes, assisted living facilities, hospice providers, long-term or extended care facilities, ambulatory surgery centers, emergency medical services units, pharmacies, behavioral health facilities, and other settings where healthcare services are provided. That breadth appears in Section III, definition of “healthcare entity” (PDF pp. 10–11).
This is not just a hospital issue. Outpatient settings, long-term care organizations, pharmacies, and facilities that rely heavily on agency staffing should all be paying attention. For organizations beginning that review, starting with a structured drug diversion risk assessment is often the most effective way to identify where exposure exists across real healthcare operations—before those gaps are tested during an audit or investigation.
Why This Model Act Matters Now
A model law is not automatically binding, but it often gives legislators and regulators a ready-made framework to adapt. What makes this one especially important is how operational it is. It does not assume that diversion mitigation can be handled informally. Instead, it expects written procedures, staff education, reporting channels, wastage controls, investigation protocols, and defined consequences for failing to act.
That means facilities should not wait until enactment to assess readiness. If your current approach depends on fragmented SOPs, inconsistent documentation, or unclear contract language, the Act points toward a much more formal compliance environment.
The Biggest Compliance Themes in the Act
Written Policies and Procedures
The Model Act is explicit on this point. Section IV (PDF pp. 15–23) requires healthcare entities that store, dispense, or administer drugs to maintain written policies and procedures to prevent and detect diversion, investigate suspected incidents, adjudicate them, and report them. It also states that those policies should reflect best practices and be evidence-based.
That is a much higher standard than a generic controlled-substance policy. Under this framework, facilities would need coordinated policies covering education, surveillance, documentation, investigation, reporting, and consequences.
If your organization already suspects its policies are inconsistent across departments, it helps to look at what a stronger structure actually requires. Rxpert Solutions guidance on how to build a strong, compliant drug diversion program because the issue is rarely a single missing policy. More often, it is the lack of a connected system across departments, workflows, and reporting structures.
Training and Education
The Act requires training and education for employed healthcare professionals as well as certain contractors and temporary employees. Required topics include recognizing substance use disorder in colleagues, recognizing diversion indicators, understanding reporting obligations, following medication handling and wastage procedures, and reducing stigma. Those expectations are also part of Section IV (PDF pp. 15–23).
This is a strong signal that a written policy alone will not be enough. Staff are expected to understand how diversion risk appears in practice and what the organization expects them to do.
Wastage and Documentation Controls
One of the most practical parts of the Act is its focus on wastage and disposal documentation. The statutory language is clear in Section IV(e)–(f) (PDF pp. 19–20), which addresses witness requirements, disposal expectations, log contents, and record retention.
For many organizations, this is where compliance exposure quietly builds. Weak unit-level wastage controls can become major problems during an investigation or audit.
Mandatory Reporting
The reporting framework outlined in Section V (PDF pp. 24–32) is broad. It includes self-reporting in certain circumstances, reporting by healthcare professionals who reasonably believe another professional is impaired or diverting, reporting by healthcare entities after certain employment or privilege actions, and reporting by staffing agencies. It also contemplates penalties for failure to report.
That makes reporting a cross-functional issue involving pharmacy, nursing leadership, HR, compliance, legal, and staffing partners.
Alternative-to-Discipline Programs
The Act does not treat every diversion-related issue solely as a disciplinary matter. Section VI (PDF pp. 33–56) makes alternative-to-discipline programs a core part of the framework. Boards are expected to establish or participate in these programs, and the structure includes evaluations, treatment agreements, aftercare, monitoring, confidentiality rules, and return-to-practice pathways.
For facility leaders, this means future compliance expectations may increasingly combine patient safety, reporting, workforce action, and recovery support rather than relying on discipline alone.
Whistleblower, Immunity, and Liability Exposure
The executive-risk side of the Model Act appears later in the document. Sections VIII–X (PDF pp. 61–64) address whistleblower protections, immunity, and liability and penalties for healthcare entities that fail to take corrective action after diversion is known.
That raises the stakes for leadership. The question is not only whether diversion occurred, but whether the facility can show it had a defensible system and followed it.
Why Best-Practice Alignment Matters
The American Society of Health-System Pharmacists notes that controlled substance diversion in health systems can create serious patient safety issues, harm to the diverter, and significant liability risk to the organization. ASHP also offers a Controlled Substances Diversion Prevention Program Assessment Tool that helps organizations compare their current practices against best-practice recommendations and identify improvement priorities. That makes it a useful companion resource for facilities reviewing this new model framework.
Five Steps Healthcare Facilities Should Take Now
First, review your current written policies. They should cover detection, reporting, investigation, wastage documentation, education, and contractor responsibilities in one coordinated structure.
Second, pressure-test reporting workflows. Suspected diversion should move through a defined process, not through informal handoffs.
Third, revisit staffing agency and vendor agreements. The Model Act specifically addresses procedures for written notice to staffing agencies when actual or suspected misuse of drugs or alcohol or diversion involves agency personnel. That expectation appears in Section IV(h) (PDF p. 21).
Fourth, evaluate medication handling and wastage practices at the unit level. This is one of the clearest operational risk areas in the Act.
Fifth, conduct a formal gap analysis against the model framework so your team can prioritize the highest-risk gaps first.
Every healthcare organization needs a clear diversion mitigation strategy.
Independent evaluations can identify monitoring gaps before they become compliance issues.
→ Explore Rxpert Solutions On-Site Drug Diversion Risk Assessment
How Rxpert Solutions Helps Facilities Prepare
Rxpert Solutions focuses exclusively on drug diversion mitigation and monitoring programs for healthcare facilities. That specialization becomes even more valuable when model legislation begins pointing toward more formal and more accountable compliance expectations.
Facilities preparing for possible state adoption can use Rxpert Solutions to assess current diversion risk and control gaps, strengthen policies and procedures, review reporting and response workflows, improve staffing-agency and vendor contract language, and build stronger mitigation and monitoring systems.
Organizations that need more than a one-time review often end up looking at both drug diversion program development and ongoing drug diversion monitoring as a service as part of a longer-term readiness strategy.
Do Not Wait for the Final Bill
The most important takeaway from the Act is not that every state will adopt every line exactly as written. It is that the direction is clear. The framework points toward more formal written policies, more reporting accountability, more scrutiny of facility response, stronger workforce pathways, and greater emphasis on documentation and auditability.
Facilities that act early will have more time to review policies, update contracts, train staff, and build a defensible diversion mitigation framework. Facilities that wait may end up doing all of that under deadline pressure.
Many healthcare organizations do not identify diversion-control gaps until after an incident or audit.
A structured review can help clarify where policy, reporting, and contract weaknesses exist now.
→ Request a Free 30-Minute Drug Diversion Risk Assessment
FAQ
Next in this Rxpert Solutions series: how the Model Act could affect diversion response team structure, oversight responsibilities, surveillance expectations, and investigation readiness inside healthcare facilities.
