State and local governments are receiving billions of dollars in opioid settlements to address the drug crisis that has ravaged America for decades. But instead of spending the money on new addiction treatment and prevention services they couldnt afford before, some jurisdictions are using it to replace existing funding and stretch tight budgets.
This story also ran on USA Today. It can be republished for free. More from This InvestigationPayback: Tracking the Opioid Settlement Cash
Opioid manufacturers and distributors are paying more than $54 billion in restitution to settle lawsuits about their role in the overdose epidemic, with little oversight on how the money is spent. Were tracking how state and local governments use or misuse the cash.Read More
Scott County, Indiana, for example, has spent more than $250,000 of opioid settlement dollars on salaries for its health director and emergency medical services staff. The money usually budgeted for those salaries was freed to buy an ambulance and create a financial cushion for the health department.
In Blair County, Pennsylvania, about $320,000 went to a drug court the county has been operating with other sources of money for more than two decades.
And in New York, some lawmakers and treatment advocates say the governors proposed budget substitutes millions of opioid settlement dollars for a portion of the state addiction agencys normal funding.
The national opioid settlements dont prohibit the use of money for initiatives already supported by other means. But families affected by addiction, recovery advocates, and legal and public health experts say doing so squanders a rare opportunity to direct additional resources toward saving lives.
To think that replacing what youre already spending with settlement funds is going to make things better its not, said Robert Kent, former general counsel for the Office of National Drug Control Policy. Certainly, the spirit of the settlements wasnt to keep doing what you’re doing. It was to do more.
Settlement money is a new funding stream, separate from tax dollars. It comes from more than a dozen companies that were accused of aggressively marketing and distributing prescription painkillers. States are required to spend at least 85% of the funds on addressing the opioid crisis. Now, with illicit fentanyl flooding the drug market and killing tens of thousands of Americans annually, the need for treatment and social services is more urgent.
Thirteen states and Washington, D.C., have restricted the practice of substituting opioid settlement funds for existing dollars, according to state guides created by OpioidSettlementTracker.com and the public health organization Vital Strategies. A national set of principles created by Johns Hopkins University also advises against the practice, known as supplantation.
Paying Staff Salaries
Scott County, Indiana a small, rural place known nationally as the site of an HIV outbreak in 2015 sparked by intravenous drug use received more than $570,000 in opioid settlement funds in 2022.
From August 2022 to July 2023, the county reported using roughly $191,000 for the salaries of its EMS director, deputy director, and training officer/clinical coordinator, as well as about $60,000 for its health administrator. The county also awarded about $151,000 total to three community organizations that address addiction and related issues.
In a public meeting discussing the settlement dollars, county attorney Zachary Stewart voiced concerns. I dont know whether or not were supposed to be using that money to add, rather than supplement, already existing resources, he said. Susan Ousterman, of Bucks County, Pennsylvania, lost her 24-year-old son, Tyler Cordeiro, to a drug overdose in 2020. She has been fighting to ensure the opioid settlement funds are used effectively since.(Steven Ousterman)
But a couple of months later, the county council approved the allocations.
Council President Lyndi Hughbanks did not respond to repeated requests to explain this decision. But council members and county commissioners said in public meetings that they hoped to compensate county departments for resources expended during the HIV outbreak.
Their conversations echoed the struggles of many rural counties nationwide, which have tight budgets, in part because they poured money into addressing the opioid crisis for years. Now as they receive settlement funds, they want to recoup some of those expenses.
The Scott County Health Department did not respond to questions about how the funds typically allocated for salary were used instead. But at the public meeting, it was suggested they could be used at the departments discretion.
EMS Chief Nick Oleck told KFF Health News the money saved on salaries was put toward loan payments for a new ambulance, purchased in spring 2023.
Unlike other departments, which are funded from local tax dollars and start each year with a full budget, the county EMS is mostly funded through insurance reimbursements for transporting patients, Oleck said. The opioid settlement funds provided enough cash flow to make payments on the new ambulance while his department waited for reimbursements.
Oleck said this use of settlement dollars will save lives. His staff needs vehicles to respond to overdose calls, and his department regularly trains area emergency responders on overdose response. Share Your Story
Do you have concerns about how your state or locality is using the opioid settlement funds? Are they doing something effective that other places should replicate? Tell us here.Share Your Story
It can be played that it was just money used to buy an ambulance, but theres a lot more behind the scenes, Oleck said.
Still, Jonathan White the only council member to vote against using settlement funds for EMS salaries said he felt the expense did not fit the moneys intended purpose.
The settlement was written to pay for certain things: helping people get off drugs, White told KFF Health News. We got drug rehab facilities and stuff like that that I believe could have used that money more.
Phil Stucky, executive director of a local nonprofit called Thrive, said his organization could have used the money too. Founded in the wake of the HIV outbreak, Thrive employs people in recovery to provide support to peers with mental health and substance use disorders. Phil Stucky is executive director of a nonprofit called Thrive, which began in Scott County, Indiana, in the wake of a large HIV outbreak in 2015. Thrive employs people in recovery to provide peer support to others with mental health and substance use disorders.(Jake Zaepfel)
Stucky, who is in recovery himself, asked Scott County for $300,000 in opioid settlement funds to hire three peer specialists and purchase a vehicle to transport people to treatment. He ultimately received one-sixth of that amount enough to hire one person.
In Blair County, Pennsylvania, Marianne Sinisi was frustrated to learn her county used about $322,000 of opioid settlement funds to pay for a drug court that has existed for decades.
This is an opioid epidemic, which is not being treated enough as it is now, said Sinisi, who lost her 26-year-old son to an overdose in 2018. The county received extra money to help people, but instead it pulled back its own money, she said. How do you expect that to change? Isnt that the definition of insanity?
Blair County Commissioner Laura Burke told KFF Health News that salaries for drug court probation officers and aides were previously covered by a state grant and parole fees. But in recent years that funding has been inadequate, and the county general fund has picked up the slack. Using opioid settlement funds provides a small reprieve since the general fund is overburdened, she said. The countys most recent budget faces a $2 million deficit.
Forfeited Federal Dollars
Supplantation can take many forms, said Shelly Weizman, project director of the addiction and public policy initiative at Georgetown Universitys ONeill Institute. Replacinggeneral funds with opioid settlement dollars is an obvious one, but there are subtler approaches.
The federal government pours billions of dollars into addiction-related initiatives annually. But some states forfeit federal grants or decline to expand Medicaid, which is the largest payer of mental health and addiction treatment.
If those jurisdictions then use opioid settlement funds for activities that could have been covered with federal money, Weizman considers it supplantation.
Its really letting down the citizens of their state, she said.
Officials in Bucks County, Pennsylvania, forfeited more than $1 million in federal funds from September 2022 to September 2023, the bulk of which was meant to support the construction of a behavioral health crisis stabilization center. Email Sign-Up
Subscribe to KFF Health News' free Morning Briefing. Your Email Address Sign Up
We were probably overly optimistic about spending the money by the grant deadline, said Diane Rosati, executive director of the Bucks County Drug and Alcohol Commission.
Now the county plans to use $3.9 million in local and state opioid settlement funds to support the center.
Susan Ousterman finds these developments difficult to stomach. Her 24-year-old son died of an overdose in 2020, and she later joined the Bucks County Opioid Settlement Advisory Committee, which developed a plan to spend the funds.
In a September 2022 email to other committee members, she expressed disappointment in the suggested uses: Please keep in mind, the settlement funds are not meant to fund existing programs or programs that can be funded by other sources, such as federal grants.
But Rosati said the county is maximizing its resources. Settlement funds will create a host of services, including grief groups for families and transportation to treatment facilities.
Were determined to utilize every bit of funding thats available to Bucks County, using every funding source, every stream, and frankly every grant opportunity that comes our way, Rosati said.
The countys guiding principles for settlement funds demand as much. They say, Whenever possible, use existing resources in order that Opioid Settlement funds can be directed to addressing gaps in services.
Ed Mahon of Spotlight PA contributed to this report.
Aneri Pattani: apattani@kff.org, @aneripattani Related Topics Courts Rural Health States Indiana Investigation New York Opioid Settlements Opioids Pennsylvania Contact Us Submit a Story Tip
