Substance use disorder providers caring for underserved populations could get a new boost in funding.
Opioid manufacturers, distributors and other entities involved with the opioid epidemic will pay $56 billion over the next 10 to 20 years for their role in the crisis. That’s broken into several different settlement agreements, the largest being the $26 billion settlement involving the three wholesalers AmerisourceBergen (NYSE: COR), Cardinal Health (NYSE: CAH) and McKesson (NYSE: MCK), as well as Johnson & Johnson (NYSE: JNJ). Today, only about $3 billion has been distributed.
“It’s not nothing, but we are still very much in the early innings with this funding,” Dr. Nasser Khan, operations group president for Acadia Healthcare’s (Nasdaq: ACHC) Comprehensive Treatment Center (CTC) division, told Behavioral Health Business.
This settlement money comes after years of an ongoing opioid epidemic. Between 1999 and 2021, an estimated 645,000 people died from an overdose involving an opioid, according to the CDC.
One of the complicating factors for providers looking to tap into the funds for patient care is that each of the settlements has slightly different parameters, and each state is distributing the funding differently.
Still, some central themes run through all of the settlements. For example, the majority of the funding will be allocated for substance use disorder (SUD) care, prevention and opioid reversal medications. The bulk of the funding will also go towards Medicaid and uninsured populations.
“One of the major use cases for those funds is going to be able to cover uninsured patients to eliminate that financial barrier or impediment that holds people back from care,” Khan said. “Only one in 10 people with OUD (opioid use disorder) are in treatment. Financial barriers to access are a big part of the story.”
Acadia is one of the largest behavioral health providers in the country. It operates 250 facilities with about 11,000 beds in 39 states and Puerto Rico. As of 2022, Acadia boasted 148 CTCs, which are focused on SUD treatment, making up 60% of its total footprint. And the provider anticipates that number is expected to grow over the next few years.
A document called Exhibit E was attached to the two largest opioid settlements and could be linked to more in the future. This document outlines guidelines for how states and local entities should use these funds.
“Treatment is going to be a central focus and making sure that provider systems are utilizing medications for treatment and recovery, so, for example, buprenorphine, naloxone, etc.,” Kris Van Hoof, vice president of professional education and continuum solutions at Hazelden Publishing, told BHB.
Hazelden Publishing is an operating division of the Hazelden Betty Ford Foundation that offers programmatic training for professionals “responsible for developing strategic partnerships and new business opportunities, as well those responsible to deliver effective, evidence-based prevention, intervention, treatment and recovery services.”
“This funding should ensure that everyone is either directly utilizing the mediation or partnering with other organizations like federally qualified health systems or hospitals [using medication],” Van Hoof continued. “So medication-assisted treatment is a biggy when it comes to treatment.”
Some of that treatment can be used for special populations, including incarcerated individuals. Acadia has historically worked with community stakeholders to figure out the best way to meet the needs of this population. It may have the opportunity to continue with these funding dollars in the future.
“In some counties, for instance, we’ve had long dialogues with individuals who work in the incarcerated setting and talking about the great need for MAT in that setting, but the lack of resources and access to medication,” Khan said. “There’s been a couple of cases where a grant program has enabled us to really do the startup work, if you will, to get the program up and running and then to figure it out together.”
Another major focus of the funding is caring for patients with mental health and co-occurring disorders. This includes ensuring that providers are screening for SUD, funding crisis response programs and developing hospital programs to help transition patients with OUD and co-occurring mental health conditions to follow-up care.
The guidelines also encourage wrap-around recovery services and specifically spell out using peer recovery coaches and other non-clinical support teams.
“What the field is seeing is that recovery support can be staffed with non-licensed staff, so coaches, peer recovery coaches as an example,” Van Hoof said. “Because mostly there are very small reimbursement rates for recovery support, this funding will allow providers to build out their peer recovery support systems and be more collaborative across communities and counties with other recovery support providers.”
Navigating the funding is complicated
While providers have a lot of opportunities to use the opioid settlement funding, it can be complicated. The bottom line is that the money will be distributed differently in every state, making it challenging for multi-state operators to navigate.
In general, there is a guidance that states should direct 70% of the settlement dollars down to counties who are best positioned to evaluate their local needs and opioid abatement activities that might be most appropriate, according to Khan.
Regardless of the entity responsible, there is typically an RFP process for providers looking to fund programs. Khan noted that the process is similar to the SOAR funding process.
While local counties could be a starting point, since there is so much variation in how each state distributes these funds, providers must do their homework and get involved.
“Know who is adjudicating those dollars, who is responsible for determining what is funded and what is not funded. Make sure that those folks hear your voice,” Dr. Cara Poland, the chair of the Michigan Opioid Advisory Committee and an addiction medicine doctor, told BHB. “I think that as behavioral health providers, we have a responsibility to help those folks that are responsible for deciding how these dollars are used, because many of them aren’t health care providers, and they’re getting asked by all different types of people and programs for funding, so they often really appreciate some guidance from credentialed addiction treatment providers.”
States have a lot of variation. For example, Van Hoof said in West Virginia, 75% of funding is going to a new foundation managed by a governing board, with half of the 12 appointed by the governor and the other six elected by regions within the state.
Meanwhile, in Georgia, 75% of the funding will go through the state Department of Behavioral Health, and it will administer the monies just like other opioid response money, Van Hoof noted.
Some providers like Acadia are involved in helping state and local governments carve out their guidelines.
“Acadia, earlier this year, entered into a multi-year partnership with the University of North Carolina,” Khan said, “where we provided them a grant effectively for them as a public institution and a leading academic center to review the evidence for various public health strategies and develop an open access playbook for public entities to tap into as they make these funding decisions.”
Industry insiders noted that the stakeholders can learn from what happened with the tobacco industry’s settlement funding. According to the United States Government Accountability Office, the Master Settlement Agreement imposed no restrictions on how states could use the payments.
As of 2007, the agency reported that only about 30% of the money went to health programs, and 3.5% went to tobacco control. Meanwhile, 22.9% went to budget shortfalls and 7.1% to general purpose funds.
“I remain hopeful that we’ll be able to learn from the tobacco settlement and utilize these dollars for their intended purposes, which is to mitigate the opioid as well as the broader addiction and mental health crisis,” Poland said. “I think one place that people seem not fully to understand in terms of settlements, broadly speaking, is that it doesn’t have to just be used for opioids; it can be used more broadly for addiction while the focus remains opioid.”