Immanuel St. Joseph's Mayo Health System says the incident was discovered when employees found empty vials of Fentanyl in a wastebasket last month. Fentanyl is a narcotic used in sedation and pain management.
The health system says its own investigation revealed that a nurse had been using the medication and replacing it with saline solution. Immanuel St. Joseph's says saline is harmless and often used for patients with dehydration.
Officials said the nurse was acting alone, was immediately suspended, and no longer works at Immanuel St. Joseph's.
They also sent letters of apology to 335 patients who had procedures involving sedation. There's no indication yet that any of those patients suffered ill effects, said Dr. Greg Kutcher, president and CEO of Immanual St. Joseph's.
Kutcher said the case had been referred to authorities for possible charges. The hospital did not identify the nurse.
Fentanyl is a painkiller similar to but considerably more powerful than morphine, according to the National Institute on Drug Abuse at the National Institutes of Health.
It goes by several street names including "murder 8" and "TNT," and is sometimes mixed with heroin or cocaine to amplify potency.
Kutcher said the workers noticed the empty vials because they were not disposed of in the usual way, not because they were suspicious of the employee.
After the discovery, the investigation turned to patients who had recent procedures involving sedation in the hospital's Cardiac Catheterization Lab, Endoscopy and Radiology.
The hospital believes patients could have received affected medication in the two weeks before the tampering was discovered.
Kutcher said there's no way to know exactly how many patients received saline doses. Such patients could have been subject to infection, or could have suffered from inadequate sedation during surgical procedures.
Hospital officials along with the state Department of Health reviewed the medical records of these patients, and "as of now there's no indication there was any harm from this," Kutcher said.
Still, the hospital issued 335 letters to patients who had procedures involving sedation in the affected laboratories during all of February and so far in March, explaining the situation and inviting them to contact the hospital with questions or concerns.
Kutcher said it's possible the hospital could learn of ill effects from some patients once they get the letters, which were mailed Saturday.
Kutcher said the case was referred to state and federal authorities.
Blue Earth County Attorney Ross Arneson said he didn't believe anyone in his office had yet received the case, but said it could be under investigation by other authorities.
The hospital has already made some changes to its security procedures, and will undertake a more sweeping reexamination of all such policies, Kutcher said.
(The Associated Press contributed to this report)