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More than $4.3 billion in opioid settlement money has landed in the hands of city, county and state officials to date — with billions more on the way. But instead of using the cash to add desperately needed treatment, recovery and prevention services, some places are using it to replace existing funding.

Local officials say they’re trying to stretch tight budgets, especially in rural areas. But critics say it’s a lost opportunity to bolster responses to an ongoing addiction crisis and save lives.

“To think that replacing what you’re already spending with settlement funds is going to make things better — it’s not,” said Robert Kent, former general counsel for the Office of National Drug Control Policy. “Certainly, the spirit of the settlements wasn’t to keep doing what you’re doing. It was to do more.”

The debate is playing out in Scott County, Ind. The rural community made headlines in 2015 after intravenous drug use led to a massive HIV outbreak and then-Gov. Mike Pence (R) legalized syringe service programs. (The county has since shuttered its syringe program.) 

In 2022, the county received more than $570,000 in opioid settlement funds. It spent about 45 percent of that on salaries for its health director and emergency medical services staff, according to reports it filed with the state. The money usually budgeted for those salaries was freed to buy an ambulance and create a rainy-day fund for the health department.

In public meetings, Scott County leaders said they hoped to reimburse the departments for resources they dedicated to the HIV outbreak years ago. 

Their conversations echo the struggles of other rural counties, which have tight budgets in part because for years they poured money into combating the opioid crisis. Now they want to recoup some of those expenses.

But many families affected by addiction, recovery advocates, and legal and public health experts say that misses the point, that the settlements were aimed at helping the nation make progress against the overdose epidemic.

Thirteen states and Washington, D.C., have restricted substituting opioid settlement funds for existing government spending, 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.

But it’s happening anyway. 

County commissioners in Blair County, Pa., used about $320,000 of settlement funds for a drug court that has been operating with other sources of money for more than two decades, according to a report the county filed with a state council overseeing settlement funds.

In New York, some lawmakers and treatment advocates say the governor’s proposed budget substitutes millions of opioid settlement dollars for a portion of the state addiction agency’s normal funding.

Given the complexities of state and local budgets, it’s often difficult to spot supplantation. But one place to start is identifying how much opioid settlement money your community has received so far. Use our searchable database to find out. Then ask elected officials how they’re spending those dollars. In many places, dedicated citizens are the only watchdogs for this money.

If you discover anything interesting, shoot me a note.

This article is not available for syndication due to republishing restrictions. If you have questions about the availability of this or other content for republication, please contact [email protected].

A wide-ranging lawsuit filed Friday outlines a moneymaking scheme by which large insurance sales agency call centers enrolled people into Affordable Care Act plans or switched their coverage, all without their permission.

According to the lawsuit, filed in U.S. District Court for the Southern District of Florida, two such call centers paid tens of thousands of dollars a day to buy names of people who responded to misleading advertisements touting free government “subsidies” and other rewards. In turn, sales agents used the information to either enroll them in ACA plans or switch their existing policies without their consent.

As a result, the lawsuit alleges, consumers lost access to their doctors or medications and faced financial costs, such as owing money toward medical care or having to repay tax credits that were paid toward the unauthorized coverage.

Some consumers were switched multiple times or had duplicative policies.

“We allege there was a plan that targeted the poorest of Americans into enrolling in health insurance through deceptive ads and unauthorized switching,” to gain compensation for the sign-ups or capture the commissions that would have been paid to legitimate insurance agents, said Jason Doss, one of two lawyers who filed the case following a four-month investigation.

Doss and Jason Kellogg, the other lawyer on the case, which was filed on behalf of several affected policyholders and agents, are seeking class action status.

KFF Health News has in recent weeks reported on similar concerns raised by consumers and insurance agents.

Named as defendants are TrueCoverage and Enhance Health, which operate insurance call centers in Florida and other states; Speridian Technologies, a New Mexico-based limited liability company that owns and controls TrueCoverage; and Number One Prospecting, doing business as Minerva Marketing, which is also a lead-generating company. The lawsuit also names two people: Brandon Bowsky, founder and CEO of Minerva; and Matthew Herman, CEO of Enhance Health. Attempts to reach the companies for comment were unsuccessful.

According to the lawsuit, the call centers had access to policyholder accounts through “enhanced direct enrollment” platforms, including one called Benefitalign, owned by Speridian.

Such private sector platforms, which must be approved by the Centers for Medicare & Medicaid Services, streamline enrollment by integrating with the federal ACA marketplace, called healthcare.gov. The ones included in this case were not open to the public, but only to those call center agencies granted permission by the platforms.

One of the plaintiffs, Texas resident Conswallo Turner, signed up for ACA coverage in December through an agent she knew, and expected it to go into effect on Jan. 1, according to the lawsuit. Not long after, Turner saw an ad on Facebook promising a monthly cash card to help with household expenses.

She called the number on the ad and provided her name, date of birth, and state, the lawsuit says. Armed with that information, sales agents then changed her ACA coverage and the agent listed on it five times in just a few weeks, dropping coverage of her son along with way, all without her consent.

She ended up with a higher-deductible plan along with medical bills for her now-uninsured son, the lawsuit alleges. Her actual agent also lost the commission.

The lawsuit contains similar stories from other plaintiffs.

The routine worked, it alleges, by collecting names of people responding to online and social media ads claiming to offer monthly subsidies to help with rent or groceries. Those calls were recorded, the suit alleges, and the callers’ information obtained by TrueCoverage and Enhance Health.

The companies knew people were calling on the promise “of cash benefits that do not exist,” the lawsuit said. Instead, call center agents were encouraged to be “vague” about the money mentioned in the ads, which was actually the subsidies paid by the government to insurers toward the ACA plans.

The effort targeted people with low enough incomes to qualify for large subsidies that fully offset the monthly cost of their premium, the lawsuit alleges. The push began after March 2022, when a special enrollment period for low-income people became available, opening up a year-round opportunity to enroll in an ACA plan.

The suit asserts that those involved did not meet the privacy and security rules required for participation in the ACA marketplace. The lawsuit also alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act, known as RICO.

“Health insurance is important for people to have, but it’s also important to be sold properly,” said Doss, who said both consumers and legitimate agents can suffer when it’s not.

“It’s not a victimless crime to get zero-dollar health insurance if you don’t qualify for it and it ends up causing you tax or other problems down the road,” he said. “Unfortunately, there’s so much fraud that legitimate agents who are really trying to help people are also being pushed out.”

Abortion opponents have maneuvered in courthouses for years to end access to reproductive health care. In Arizona last week, a win for the anti-abortion camp caused political blowback for Republican candidates in the state and beyond.

The reaction echoed the response to an Alabama Supreme Court decision over in vitro fertilization just two months before.

The election-year ruling by the Arizona Supreme Court allowing enforcement of a law from 1864 banning nearly all abortions startled Republican politicians, some of whom quickly turned to social media to denounce it.

The court decision was yet another development forcing many Republicans legislators and candidates to thread the needle: Maintain support among anti-abortion voters while not damaging their electoral prospects this fall. This shifting power dynamic between state judges and state lawmakers has turned into a high-stakes political gamble, at times causing daunting problems, on a range of reproductive health issues, for Republican candidates up and down the ballot.

“When the U.S. Supreme Court said give it back to the states, OK, well now the microscope is on the states,” said Jennifer Piatt, co-director of the Center for Public Health Law and Policy at Arizona State University’s Sandra Day O’Connor College of Law. “We saw this in Alabama with the IVF decision,” she said, “and now we’re seeing it in Arizona.”

Multiple Republicans have criticized the Arizona high court’s decision on the 1864 law, which allows abortion only to save a pregnant woman’s life. “This decision cannot stand. I categorically reject rolling back the clock to a time when slavery was still legal and where we could lock up women and doctors because of an abortion,” state Rep. Matt Gress said in a video April 9. All four Arizona Supreme Court justices who said the long-dormant Arizona abortion ban could be enforced were appointed by former Gov. Doug Ducey, a Republican who in 2016 expanded the number of state Supreme Court justices from five to seven and cemented the bench’s conservative majority.

Yet in a post the day of the ruling on the social platform X, Ducey said the decision “is not the outcome I would have preferred.”

The irony is that the decision came after years of efforts by Arizona Republicans “to lock in a conservative majority on the court at the same time that the state’s politics were shifting more towards the middle,” said Douglas Keith, senior counsel at the left-leaning Brennan Center for Justice.

All the while, anti-abortion groups have been pressuring Republicans to clearly define where they stand.

“Whether running for office at the state or federal level, Arizona Republicans cannot adopt the losing ostrich strategy of burying their heads in the sand on the issue of abortion and allowing Democrats to define them,” Kelsey Pritchard, a spokesperson for Susan B. Anthony Pro-Life America, said in an emailed statement. “To win, Republicans must be clear on the pro-life protections they support, express compassion for women and unborn children, and contrast their position with the Democrat agenda.”

Two months before the Arizona decision, the Alabama Supreme Court said frozen embryos from in vitro fertilization can be considered children under state law. The decision prompted clinics across the state to halt fertility treatments and caused a nationwide uproar over reproductive health rights. With Republicans feeling the heat, Alabama lawmakers scrambled to pass a law to shield IVF providers from prosecution and civil lawsuits “for the damage to or death of an embryo” during treatment.

But when it comes to courts, Arizona lawmakers are doubling down: state Supreme Court justices are appointed by the governor but generally face voters every six years in retention elections. That could soon change. A constitutional amendment referred by the Arizona Legislature that could appear on the November ballot would eliminate those regular elections — triggering them only under limited circumstances — and allow the justices to serve as long as they exhibit “good behavior.” Effectively it would grant justices lifetime appointments until age 70, when they must retire.

Even with the backlash against the Arizona court’s abortion decision, Keith said, “I suspect there aren’t Republicans in the state right now who are lamenting all these changes to entrench a conservative majority on the Supreme Court.”

Meanwhile, abortion rights groups are trying to get a voter-led state constitutional amendment on the ballot that would protect abortion access until fetal viability and allow abortions afterward to protect the life or health of the pregnant person.

State court decisions are causing headaches even at the very top of the Republican ticket. In an announcement in which he declined to endorse a national abortion ban, presumptive Republican presidential nominee Donald Trump on April 8 said he was “proudly the person responsible” for ending Roe v. Wade, which recognized a federal constitutional right to abortion before being overturned by the U.S. Supreme Court in 2022, and said the issue should be left to states. “The states will determine by vote or legislation, or perhaps both, and whatever they decide must be the law of the land,” he said. But just two days later he sought to distance himself from the Arizona decision. Trump also praised the Alabama Legislature for enacting the law aiming to preserve access to fertility treatments. “The Republican Party should always be on the side of the miracle of life,” he said.

Recent court decisions on reproductive health issues in Alabama, Arizona, and Florida will hardly be the last. The Iowa Supreme Court, which underwent a conservative overhaul in recent years, on April 11 heard arguments on the state’s near-total abortion ban. Republican Gov. Kim Reynolds signed it into law in 2023 but it has been blocked in court.

In Florida, there was disappointment all around after dueling state Supreme Court decisions this month that simultaneously paved the way for a near-total abortion ban and also allowed a ballot measure that would enshrine abortion rights in the state constitution to proceed.

The Florida high court’s decisions were “simply unacceptable when five of the current seven sitting justices on the court were appointed by Republican Governor Ron DeSantis,” Andrew Shirvell, executive director of the anti-abortion group Florida Voice for the Unborn, said in a statement. “Clearly, grassroots pro-life advocates have been misled by elements within the ‘pro-life, pro-family establishment’ because Florida’s highest court has now revealed itself to be a paper tiger when it comes to standing-up to the murderous abortion industry.”

Tension between state judicial systems and conservative legislators seems destined to continue given judges’ growing power over reproductive health access, Piatt said, with people on both sides of the political aisle asking: “Is this a court that is potentially going to give me politically what I’m looking for?”

SACRAMENTO, Calif. — Nearly a half-million health workers who stand to benefit from California’s nation-leading $25 minimum wage law could be in for a rude awakening if hospitals and other health care providers follow through on potential cuts to hours and benefits.

A medical industry challenge to a new minimum wage ordinance in one Southern California city suggests layoffs and reductions in hours and benefits, including cuts to premium pay and vacation time, could be one result of a state law set to begin phasing in in June. However, some experts are skeptical of that possibility.

The California Hospital Association brought a partly successful legal challenge to Inglewood’s $25 minimum wage ordinance, which barred employers from taking those sorts of steps to offset their higher costs.

“Layoffs, reductions in premium pay rates, reductions in non-wage benefits, reductions in hours, and increased charges are consequences of an employer having less money to spend—which will necessarily be the case given the significant increase in spending on wages due to the minimum wage,” the association said in its lawsuit. Additional examples include reducing health coverage and charging for parking or work-related equipment.

Inglewood voters approved the ordinance in November 2022, nearly a year before California legislators enacted a $25 minimum wage for health workers. Those statewide higher wages are to be phased in starting in June under California’s first-in-the-nation law, but Gov. Gavin Newsom has since said they are too expensive as the state faces a deficit estimated between $38 billion and $73 billion. It’s unclear if lawmakers will agree to a delay or take other steps to reduce the cost.

U.S. District Judge Dale S. Fischer agreed with the hospital industry in a March 11 tentative ruling when he shot down the portion of Inglewood’s ordinance banning layoffs and clawbacks by employers, while allowing the rest of the ordinance to remain in effect. He gave the sides time to object to his preliminary decision, though none did.

The California Hospital Association represents more than 400 hospitals and was a key backer of the state’s carefully crafted compromise law, which notably contains none of the employee safeguards included in the Inglewood ordinance.

Spokesperson Jan Emerson-Shea said the association doesn’t know how providers will react once the state law takes effect. “We don’t have any insights,” she said.

“The challenge for any health care organization is figuring out how to pay for the higher wages,” said Joanne Spetz, director of the Philip R. Lee Institute for Health Policy Studies at the University of California-San Francisco. “Since labor costs are the largest part of any health care organization’s costs, it’s hard to figure out how to reduce spending without looking at labor costs.”

Providers can try to increase revenues by bargaining for higher reimbursements from commercial insurers, she said. Public hospitals, nursing homes, and community clinics get most of their money through Medi-Cal, the state’s Medicaid program.

Providers could reduce the services they offer, pare back charity care, and cut or delay capital investments, Spetz said. In the long term, she expects some combination of spending cuts and revenue increases.

Both the state law and local ordinance cover far more than doctors and nurses, with a definition of health worker that includes janitors, housekeepers, groundskeepers, security guards, food service workers, laundry workers, and clerical staff.

The most recent estimate by the Health Care Program at the University of California-Berkeley Labor Center is that as many as 426,000 health workers would make an average of $6,400 extra in the law’s first year, a 19% average pay bump mainly benefiting lower-income workers of color and women. State finance officials project that well over 500,000 workers will benefit.

Researchers didn’t include layoffs and other potential staffing and benefit reductions when they projected the state law’s costs and benefits, said Laurel Lucia, the program’s director. But she pointed to initial projections by hospitals, doctors, and business and taxpayer groups that the wage hike would cost $8 billion annually, thereby imperiling services and resulting in higher premiums and higher costs for state and local governments.

“It seems like a contradiction to say this law’s going to cost billions of dollars while at the same time saying it’s going to reduce workers’ total compensation,” said Lucia, who projects a far lower price tag.

She added that state finance officials had anticipated that Medi-Cal reimbursements would reflect the increased labor costs, while Medicare would eventually at least partially compensate for the higher labor costs.

Michael Reich, chair of the Center on Wage and Employment Dynamics at UC Berkeley’s Institute for Research on Labor and Employment, and affiliated economist Justin Wiltshire recently argued that California’s new $20 minimum wage law for fast-food workers won’t result in mass layoffs and price increases, as some have predicted.

Health care is much different than fast food, Reich acknowledged, but he argued for much the same positive result.

“A higher minimum wage will make it easier and cheaper for hospitals to recruit and retain these workers. The cost savings, and the productivity benefits of more experienced workers, could offset much of the labor cost increase,” Reich said.

The hospital association filed its lawsuit against Inglewood’s ordinance in July, while it was still opposing early versions of the statewide minimum wage legislation. Among many other provisions, the statewide law put on hold an initiative to cap hospital executives’ salaries in Los Angeles.

The hospital association’s legal challenge referenced in part layoffs and reduced working hours imposed by Centinela Hospital Medical Center after Inglewood’s ordinance took effect.

But Centinela said the reduction was entirely unrelated to the ordinance and that all staff were offered alternate positions, which many accepted.

“Centinela Hospital also has since added many more jobs in new clinical positions above minimum wage scale,” the hospital said in a statement.

Service Employees International Union-United Healthcare Workers West, the prime backer of both the local ordinance and the statewide law, sued the hospital in April 2023 alleging that it cut workers’ hours to offset the higher minimum wage. The case is still pending.

The union did not respond to repeated requests for comment.

In a court filing, however, the union and city of Inglewood said similar employer restrictions in previous minimum wage laws have survived.

The ordinance “merely sets the backdrop for collective bargaining negotiations,” and does not bar employers from locking out employees or hiring replacement workers during a strike. Employers can still lay off workers or reduce their hours, they said, so long as they don’t do so to fund the higher minimum wage.

But Fischer agreed with the hospital association that layoffs and reductions in employees’ total compensation packages are “obvious responses by an employer to rising compensation costs.”

Restricting employers’ options would violate federal labor relations rules, he said.

“The minimum wage an employer has to pay its employees will invariably affect the total amount of compensation it is able or willing to pay,” he wrote “This will then invariably affect the number of employees it can retain and the number of hours those employees will be scheduled to work.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.