As state and local governments close their books and finalize new budgets for the year, millions of dollars from opioid settlements are moving through various appropriation channels. These payments represent a rare opportunity to strengthen efforts to combat the opioid crisis. But they also present a temptation to use settlement dollars to pay for programs the government was already funding.
This practice is known as supplantation. In effect, opioid settlement funds are used to cover the cost of an existing program that may have some connection to addiction or public health but would otherwise have been paid for with ordinary government revenue. The practical result is that no additional resources reach the opioid response.
Supplantation is not generally prohibited by the national settlement agreements themselves, provided the money is spent on an otherwise approved opioid-remediation purpose. But it may violate the spirit of these settlements. They were intended to address the damage caused by the opioid epidemic through expanded access to treatment, programs, and innovative approaches that assist with accomplishing that goal.
Unfortunately, some recent spending decisions across the country show how easily settlement funds can be used to fill a funding gap.
In New Jersey, for example, lawmakers directed $45 million from the state’s opioid settlement fund to four hospital systems during the budget process, despite a broader spending plan that was developed by the state’s advisory council. The hospitals later outlined opioid-related initiatives, but critics questioned the lack of transparency surrounding the decision and whether settlement money was replacing resources that should have come from the general fund. This is just one example of many, demonstrating how broad definitions of allowable spending are not a substitute for independent verification that settlement dollars are adding to the opioid response.
As the former secretary of the Kentucky Cabinet for Health and Family Services, I know that an expense may qualify as opioid-related on paper, but the program, for instance, may have historically been funded out of general fund dollars as part of the government’s ongoing response to the crisis. It is important for those in government who are making decisions about how to appropriately spend the settlement dollars to do so based on leveraging and not replacing existing resources to expand programs, treatment, and medication options, and other approaches to expand services and provide new and innovative approaches to address the carnage from this crisis for as many individuals as possible. Only then will the additional funds made available through the settlement dollars improve the lives of those most affected and produce measurable improvements in prevention, treatment, recovery, and public safety.
Connecticut provides a useful example of how states can address the issue of supplantation with clear, enforceable rules and maintenance-of-effort requirements. Its law generally bars disbursement unless the Office of Policy and Management verifies that abatement funding in the current budget is at least as great as in the previous year. Other states could strengthen that approach by adopting a rolling three-year baseline and requiring officials to identify the new capacity or measurable expansion each settlement appropriation will provide.
It may also be worth considering the implementation of an approach to address the sustainability of successful programs after genuinely temporary funding expires. “Expired” should not become a loophole. It should be confirmed that the original funding was truly time-limited, exhausted, and unavailable for renewal. Government officials should document those facts and confirm that no recurring appropriation was withdrawn in anticipation of settlement money. An example of a state’s efforts to address the supplantation issue is the official guidance issued by the Colorado Opioid Abatement Council that implements requirements to ensure that opioid monies are used to supplement, expand, and sustain ongoing funding for an effective program after a temporary grant ends.
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Finally, enforcement should follow the decision-making authority. If lawmakers or agencies use settlement dollars to backfill an ordinary budget, the government should have to restore the displaced amount to opioid remediation and risk losing discretion over future allocations. Community providers should not be penalized for decisions they did not make. Their reporting should focus on services delivered; responsibility for proving that an award supplements existing spending belongs to the officials who approved it.
Families who have lost loved ones to opioids did not endure that pain so governments could balance budgets. Settlement dollars should support new and expanded effective responses to address this crisis. A genuine non-supplantation rule, backed by a credible baseline and accountability for policymakers, would help ensure that they do.
Vickie Yates Brown Glisson is a nationally recognized health lawyer and the former Secretary of Kentucky Cabinet for Health and Family Services.
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[ H/T Washington Examiner ]
