KFF Health News: Unclear oversight of opioid settlement funds

Nearly half of opioid settlement money is going to local governments, but many local leaders have little training in addiction policy and may lack robust local health departments and policy guardrails to assist them in distributing the funds.

• Why it’s important: This has resulted in spending decisions that many clinicians, researchers, and advocates say are unlikely to save lives or treat substance use disorder.

The bigger picture: Regulators nationwide are evading oversight responsibility. It is unclear who should, or will, take action on expenditures that many consider questionable.

• In each state, control of the money is split among various entities, creating a leadership vacuum.
• The federal government plays little to no role. Advocates have pushed for accountability but have limited power. A few states have passed new laws, but change is slow and uneven.
• The settlement agreements require most of the money to be spent on “opioid remediation,” with more than 100 suggested expenditures. But the list is broad and open to interpretation.

The details: In New York, local advocates said that when they raise concerns about questionable spending to the various state agencies that could hold localities accountable, the agencies often punt to one another. There are three prime watchdog contenders in the state:

• Office of Addiction Services and Supports (OASAS): The state’s opioid settlement documents designate OASAS as the “lead state agency.” OASAS distributes settlement funds via grants, according to recommendations from the Opioid Settlement Fund Advisory Board. It has the power to “engage in oversight and audits of projects and programs” funded by settlement money and “may withhold future funds” from local governments that do not comply with requirements. OASAS is auditing 19 local governments to ensure compliance with “reporting and recordkeeping requirements,” but not necessarily to ensure funds went to appropriate uses. Local governments are required to report how they spent the funds, but while OASAS collected links to those reports on its site, it does not review the accuracy or detail of that data.
• Attorney General: New York Attorney General Letitia James has been one of the leading national voices on prosecuting opioid companies. But her office has passed the buck to other agencies on ensuring the funds are spent appropriately. Attorneys general in some other states (e.g., Michigan, Kansas) have taken more active roles by issuing lists of ways the money cannot be spent.
• Comptroller: The state comptroller could play an oversight role by conducting or requiring audits. The New York Comptroller’s office is conducting an audit, looking at OASAS’s oversight of the opioid settlement money. It includes settlement money controlled by the state and local governments. Comptrollers and auditors elsewhere (e.g., New Jersey, Missouri) have also taken action on settlement funds.

Read more: Leadership Vacuum: Agencies in New York and Beyond Pass the Buck on Opioid Cash Oversight