Delays of opioid settlement funds strain nonprofits offering substance use treatment, housing

Featured photo: A grab bag with cottons, cookers, alcohol wipes, syringes and a list of treatment resources put together by North Carolina Harm Reduction Coalition. (photo by Taylor Knopf/NC Health News)

This story was originally published by North Carolina Health News. Story by Taylor Knopf

In October, a new clinic offering opioid addiction treatment opened in Guilford County. Patients get connected to the clinic by the post-overdose response team at an organization called Guilford County Solution to the Opioid Problem — better known as GC STOP. 

Now, 48 people who overdosed in the community have been connected to treatment and medication thanks to the new initiative, which was made possible by a grant using funds from a massive legal settlement with McKinsey & Company. The $600 million, multistate settlement was the result of a lawsuit over the international management consulting firm’s alleged role in helping Purdue Pharma to “turbocharge” its sales of the opioid OxyContin.  

The problem is that the grant funding — which was announced in June — still hasn’t arrived at the clinic. 

“So since October, we’ve been paying for clinic space, a clinician, medication and the physician without any funding,” said Michael Thull, social worker and director of GC STOP. 

He said his organization, in partnership with medication provider Caring Services, will do everything they can to continue treatment for patients, but he’s not sure how long they can keep the clinic open while waiting on the funds to be distributed by the North Carolina Department of Health and Human Services.

“The way we’re going, I don’t know,” Thull said. “To be frank — I hate to communicate to participants that it’s in danger — but I I don’t know how we’re gonna sustain much longer because there won’t be any sources of other programmatic money to borrow from.”

One patient of the new clinic is someone Thull personally saved by reversing their overdose with naloxone. He was able to offer the person an opportunity to see the clinic doctor that week; that ability to immediately connect someone to care after an overdose is crucial. 

“It’s not uncommon with the outreach work that we’re doing in the community that we will go out and meet someone and offer them services — and then when we go back out the next week, they’re not there anymore,’” Thull explained. “And the folks that were with them will say, ‘They died of an overdose.’”

Research shows that medication for opioid addiction greatly reduces the risk of overdose death.

“So there’s a real cost to human life that these delays are potentially bringing about, and that’s incredibly disheartening,” Thull said.

Coming soon?

Thull said it was his understanding that programs receiving these grants needed to hit the ground running, and his organization did. He has reached out to the state health department multiple times for updates on when the McKinsey grant contracts and funding would arrive. Each time he’s told they’re coming soon.

“NCDHHS is working closely with grant recipients to get these funds out as quickly as possible,” a department spokesperson wrote in response to NC Health News.

“Since May of 2022, the Division of Mental Health, Developmental Disabilities and Substance Abuse Services has issued 20 RFAs [requests for applications] and has made more than 72 awards with contracts. Currently, two of these contracts have been awarded and the rest are in the final stages of development and execution. Exact timelines will vary based on the grant recipient, but it is expected that all contracts will be fully executed in the next two to four weeks,” a department spokesperson wrote in an email on Jan. 27.

NC Department of Health and Human Services Sec. Kody Kinsley suggested that his department’s staffing issues have contributed to delays in grant funding and their accompanying contracts. 

“We have a 28 percent vacancy rate at the department. It has doubled since COVID,” Kinsley told an audience gathered earlier this month for the annual Legislative Breakfast on Mental Health. 

“People are working harder than ever because they care passionately about serving the state,” he said. “So please be kind to them. Sometimes your contracts are delayed, and that’s frustrating.”

About the McKinsey settlement 

Last year, North Carolina Attorney General Josh Stein announced that the state would receive nearly $19 million of the opioid settlement with McKinsey that included 47 states, the District of Columbia and multiple territories.

“We allege that McKinsey helped to develop and promote schemes that led to widespread overprescription of Purdue Pharma’s OxyContin,” Stein said in a news release. “Not only have we put a stop to this dangerous work, but we’re also bringing much-needed resources to the fight against addiction.”

The funds are scheduled to arrive in the state over a five-year period, but the majority of the funds were supposed to come in the first year, according to the attorney general’s office. In June, the North Carolina Department of Health and Human Services announced the 20 organizations that would receive the bulk of those funds — roughly $16 million.

The settlement agreement requires the money be spent on opioid abatement, which means reducing the damage done by the alleged deceptive marketing of opioids. In North Carolina, the funds are designated for programs to expand employment, housing and transportation support for people with substance use disorders. The money will also go to programs that provide treatment for opioid use disorder and those that help people with substance use disorder involved in the criminal justice system, according to the state health department. 

The McKinsey settlement is one of several legal agreements with opioid manufacturers, distributors and consulting groups that will result in hundreds of millions of dollars coming into the state to address the ever-increasing drug overdose problem in coming years. With the influx of cash coming, there have been many ideas for how to spend it, from religious-based addiction programs to expansion of harm reduction services. 

Some of those payments have already started making their way to North Carolina communities. The state will track and soon report how the funds are spent on a public dashboard. 

Housing projects delayed

In Charlotte, Queen City Harm Reduction plans to use its McKinsey grant for a housing pilot program for people who use drugs and have been involved in the criminal justice system. That involvement effectively bars them from receiving many housing and public assistance options. 

The pilot will not build homes. Instead it will work with current housing systems and provide voucher support for rent, food, utilities and other basic needs. There is also a research component to the pilot as the group seeks to find ways to motivate landlords and housing aid programs to work with people who use drugs, explained Lauren Kestner, the associate director of harm reduction at Center for Prevention Services who oversees Queen City Harm Reduction.

“When a person is sheltered, when they have food security, when they have clothing security, when they can become gainfully employed, get an ID — all of these things — their chances of finding healthier and more sustainable ways to live increase two- to threefold,” Kestner said. “It may not mean that they completely stop using substances, like our society would so much like them to do, but it does show that a person is more than capable of being a contributing member of society.”

When a person’s basic needs are met, their drug use may shift, she said. Maybe they will use drugs more moderately. Maybe they will try medication for opioid use disorder. Or maybe they will seek psychiatric help and start a medication that actually treats the mental illness they were using drugs to self medicate, she explained. The pilot will track some of these outcomes.

“It’s an awesome project that is able to do a lot of really wonderful work in that community,” she said. 

Though Kestner and her team started work on the pilot in the fall, some aspects of the project are in a holding pattern as they wait on the grant money from the state. Kestner said she has three staff members paid through the grant, and moving money around to make up for the delay in funding is becoming a challenge. 

In Cabarrus County, the launch of another housing project has been pushed back by the funding delays. Cabarrus Health Alliance was awarded one of the McKinsey settlement grants to create supportive housing for participants of its SUN project, which serves pregnant women and mothers with substance use disorder. 

‘Less red tape’

Kestner said she knows the individuals at the state health department are doing their best to work with her organization and others. She sees these delays as a department issue and says there should be a better system in place to coordinate grant distributions.

“In defense of the department of mental health, they are clearly understaffed. They did not have a coordinated response to this effort,” Kestner said. “I don’t really know that programs should be dealing with the mess of that.”

“I just wished that there was just a little less red tape when it came to how we take such a collective screwup and move it forward in a way that’s really going to benefit the people receiving these services and the staff that’s providing these services,” she added.

Angela Allen, executive director of Center for Prevention Services, which houses Queen City Harm Reduction, said these kinds of delays are “fairly common as the kinks get worked out, particularly on new grant funding streams.”

Allen explained that most grants operate on a reimbursement basis, meaning the money is spent first and receipts are submitted to the funder. 

“Our agency is in the fortunate position of having the means to spend down funding to start getting work done in the community and then wait for reimbursement to catch up with billing,” she said. “Smaller nonprofit organizations don’t always have the ability to do that, which does delay the important community work from starting.”

This article first appeared on North Carolina Health News and is republished here under a Creative Commons license.