Feb 24th 2023 | Posted in Mary Scott Nabers' Insights, Opportunities by Mary Scott Nabers

For years, state governments affected by the opioid epidemic were locked in intense litigation with pharmaceutical companies, some of which are the most powerful corporations in the world. The years of legal battles are now paying off and approximately $54 billion in settlement money is being distributed to state and local governments across the country. Additionally, settlements allocated to tribal communities from three of the largest pharmaceutical distributors will add another $440 million in funding for health services and other types of projects.

The state of Texas will receive an anticipated $1.6 billion in opioid settlement funds. The money will come in installments over many years. To ensure fair distribution, the state has created an Opioid Abatement Fund Council that will operate out of the Texas Comptroller’s office. The council will oversee a newly created repository of revenue. As of 2022, Texas had already received more than $130 million and another $2.6 million in revenue owed during 2022 is yet to reach Texas. The funding can be used in numerous ways.

The state of New York has created a State Opioid Settlement Fund and billions in settlement payments will also extend over numerous years. During those years, the state’s newly created Opioid Settlement Fund Advisory Board will recommend how those funds are spent. Most states have established similar types of programs to recommend how the spending is allocated.

Opioid settlement funds are to be spent on projects that provide benefits to a continuum of care. However, that general guidance will allow revenue eligibility for numerous types of projects. It can be used to support development of new facilities, improvement of operations related to healthcare, recovery services, medication-assisted treatments in prisons, transitional housing needs and treatment centers. Additionally, New York’s opioid settlement funds will be used to develop local and regional planning for transportation solutions to improve rural access to critical health services. Approximately $113 million will flow to New York municipalities this year. At the state level, in 2023, New York will receive $242 million and $128 million has been earmarked for transportation initiatives.

The state of Maryland’s settlement funding is approximately $400 million, and agreements stipulate that the governor will provide annual recommendations for how the allocations are appropriated. Spending recommendations will be guided by input from a supervisory body called the Opioid Restitution Fund Advisory Council. An allocation of $45.8 million has been announced for four regional behavioral health crisis centers that will offer 24/7 services for individuals experiencing behavioral health episodes. The new facilities will also mitigate some of the overcrowding that many traditional emergency clinics and urgent care centers are experiencing.

In Michigan, an Opioid Advisory Commission will recommend how to spend half of the $800 million in settlement funding reserved exclusively for state oversight. Plans are to construct four new medication-assisted treatment sites and each facility will have the capacity to treat as many as 400 patients. Plans are not available yet for the remaining $400 million that will flow to local government entities.

The majority of Virginia’s $533 million opioid settlement money (55%) will go into a recently established fund at the state. While funding will be available for state use, millions will also flow to local governments. The state has elected to appropriate 15% of the settlement funds through the state’s regular budgeting process but officials are still in the process of developing concrete plans for that money.

The county of Loudoun in Virginia will use part of the funding for a crisis receiving and stabilization center. Another locally organized project that will be eligible for opioid settlement funding is the creation of a county department for behavioral care services. The objective is to give the county responsibility for ensuring that people in crisis can access onsite medical care and/or therapeutic intervention. The funding will also be used to support a long-term strategy for community-wide mental health support.

A total of $196 million in opioid settlement money available to New Mexico will be split between the state and local governments. Approximately 45% will be reserved for state spending oversight and 55% will flow to local governments. One new behavioral health facility in Curry County is already planned and it carries a projected cost of $45 million. It will be one of the first projects to be launched.

This new funding will continue for almost two decades and most states will receive a share of the settlement revenue. To use the revenue, public officials at every level of government will be seeking private-sector partners, especially those able to provide planning services, project oversight, engineering and design, technology, site work and equipment delivery.

As President and CEO of Strategic Partnerships, Inc., Mary Scott Nabers has decades of experience working in the public-private sector. A well-recognized expert in the P3 and government contracting fields, she is often asked to share her industry insights with top publications and through professional speaking engagements.