Updated Nov. 8, 2024

In this context, the terms “opioid settlement” and “opioid abatement” are used interchangeably to describe efforts focused on creating, expanding, or sustaining programs, services, or activities that address the opioid overdose crisis and support opioid remediation.

Overview

1. What is an opioid settlement (or “abatement”) fund?

An "abatement fund" is a dedicated fund or statutory trust set aside specifically for opioid remediation efforts. It is allocated exclusively for addressing the opioid crisis and is kept separate from general tax and other revenue sources.

2. What type of funding are opioid settlement dollars?

Opioid settlement dollars come from legal settlements between government entities (such as states, counties, and municipalities) and opioid manufacturers, distributors, retailers, and other involved parties. These settlements typically arise from lawsuits alleging that these entities contributed to the opioid overdose crisis through deceptive marketing practices, failure to monitor and control the distribution of prescription opioid analgesics, and other negligent or illegal actions

3. What does opioid ‘remediation’ mean?

Opioid remediation refers to actions and strategies designed to mitigate the harm caused by the opioid crisis. This includes a broad range of strategies designed to reduce opioid misuse, treat opioid use disorder (OUD) and related disorders, and prevent further harm to individuals and communities impacted by the overdose crisis.

Authorized Spending

4. How can opioid settlement funds be used?

At least 85 percent of opioid settlement funds must go toward opioid remediation activities. Spending must follow state law guidelines, which outline both a limited list of reimbursable expenses and a broader set of 29 forward-looking strategies for opioid remediation. KRS 15.291 and/or Exhibit E of the national opioid settlements provide a non-exhaustive list of allowable uses for settlement funds.

Allowable uses are primarily aimed at supporting those most impacted by the drug overdose crisis, including prevention, harm reduction, treatment, and recovery.

5. Can counties include opioid settlement funds in their budgets?

Yes, counties can include already-distributed opioid settlement funds in their budgets if they are allocated for approved activities. However, budgeting for anticipated funds from ongoing litigation or funds not yet distributed is discouraged. Counties should distinguish between "supplanting" and "supplementing" funds:

• Supplanting refers to replacing existing funding with settlement dollars, which can reduce resources for the original purpose.
• Supplementing means using settlement funds to enhance existing programs or to develop new initiatives.

County leaders are encouraged to focus on supplementing resources to maximize the impact of settlement funds, drawing on evidence-based practices and seeking technical assistance when needed.

6. What types of activities can be reimbursed with these funds?

Kentucky law identifies three main areas eligible for reimbursement of past expenditures: costs associated with outpatient and residential treatment services; costs for emergency response services provided by law enforcement or first responders; and costs related to the administration of opioid antagonists such as naloxone (KRS 15.291(5)(a). Reimbursement is allowed only if these expenditures qualify as opioid remediation, as specified by KRS 15.291 and Exhibit E. The settlement agreements also include varying limits on the percentage of funds that may be used to reimburse past expenditures.

7. Can these funds be spent on salaries?

Salaries may be funded if they are for personnel directly involved in opioid prevention, treatment, recovery, and harm reduction efforts. While spending opioid settlement money on salaries is generally allowed, it must comply with state law and the terms of any applicable settlement agreements by ensuring that funded positions directly advance opioid remediation initiatives.

Careful documentation and adherence to any specified limitations are essential to ensure compliance and maximize the impact of the funds on addressing the opioid overdose crisis.

8. Can a county subcontract with a local nonprofit or third party?

Yes, counties may work with local nonprofits or third parties by establishing Memorandums of Understanding (MOUs) with these agencies. Counties should consult their county attorney to create MOUs and ensure that funds are spent according to guidelines. Clear documentation and agreements must be in place before funds are subcontracted to another agency. It is important to note that if a county provides funds to an agency, the county is still responsible for ensuring that those funds are spent correctly.  A sample MOU template is available here.

Oversight and Reporting

9. Who oversees the funding, including oversight, reporting, and monitoring?

The Kentucky Opioid Abatement Advisory Commission (KYOAAC) is responsible for overseeing the Kentucky Opioid Settlement funds. Created by the General Assembly through House Bill 427, KYOAAC is tasked with monitoring, reporting, and managing the allocation of these funds.

The commission reports on projects addressing the opioid crisis, sets spending priorities and goals, and collaborates with state agencies or external organizations to measure the impact of funded initiatives on substance use disorders.

To promote transparency, the commission must maintain a public website where it publishes minutes, attendance records, funding awards, and recipient reports. KYOAAC also has the authority to issue both standard and emergency administrative regulations to facilitate the timely and effective distribution of funds, ensuring these resources are distributed promptly to support programs targeting the opioid epidemic.

10. What are the reporting requirements?

Recipients of opioid settlement funds, including counties, are required to submit quarterly certifications using the OAAC Certification Form. The reports must be notarized and emailed to kyoaac@ky.gov. They are due on March 31, June 30, September 30, and December 31 of each year. Recipients must submit a report even if no opioid settlement funds were spent during that quarter.

11. Can the funds be carried over?

Yes, funds can be carried over. State law and the current settlement agreements do not impose any requirements or deadlines for when these funds must be spent.

12. Can the funds be put in an interest-bearing account?

Yes, funds may be placed in an interest-bearing account. KRS 15.293 subsections (5) and (7) require interest earned on state-managed opioid funds to be used specifically for opioid remediation. Although this statute does not specifically apply to opioid funds managed by local governments, counties should similarly ensure that any interest earned on county-held opioid settlement funds is spent in full compliance with all applicable settlement agreements and statutory requirements.

Planning and Implementation

13. What resources are available to help counties plan, implement, and monitor opioid abatement-funded projects?

Counties have access to several valuable resources to support their opioid abatement efforts:

KACo’s Opioid Settlement Resource Library and Technical Assistance (TA):

KACo maintains an Opioid Settlement Resource Library and offers direct technical assistance (TA). This support includes guidance on general settlement questions, strategic planning, understanding allowable uses, developing spending plans, accessing resources, tracking progress, and learning from other counties' experiences.

University of Kentucky’s Rapid Implementation and Technical Assistance (RITA) Hub:

The Rapid Implementation and Technical Assistance (RITA) Hub provides comprehensive implementation support to social service agencies and the criminal legal system throughout Kentucky. The RITA Hub focuses on the adoption of evidence-based practices to address opioid use disorder effectively.

Bloom Kentucky:

Bloom Kentucky is focused on statewide policy change that aims to prevent and mitigate the impact of adverse childhood experiences (ACEs), which are often linked to substance use. The organization supports opioid abatement efforts as part of its broader mission to address substance-related adversity and promote community well-being.

Opioid Settlement Principles Resource and Indicators (OSPRI):

Opioid Settlement Principles Resource and Indicators (OSPRI) is an interactive online tool designed to help counties and states in invest in effective overdose prevention strategies and monitor how those investments are expanding the capacity in the jurisdiction to reduce overdose risks.

These resources collectively support counties in making impactful, data-driven decisions for their opioid abatement initiatives.

“Evidence-based medicine is the conscientious, explicit, and judicious use of current best evidence in making decisions about the care of individual patients. Practicing evidence-based medicine involves integrating individual clinical expertise with the best available external evidence from systematic research.” – Sackett et al., 1996

In the context of opioid settlement funds, evidence-based practices (EBP) involve implementing interventions and strategies backed by research, shown to be effective in combating opioid addiction and its related issues. When counties or local governments distribute these funds, it is essential to invest in programs and services that are not only innovative but also supported by data-driven research to ensure meaningful, measurable outcomes.

15. What are some examples of eligible, evidence-based initiatives?

The National Association of Counties (NACo) created the following quick guides covering a wide range of eligible, evidence-based strategies:

• Comprehensive Services for People with Co-Occurring Disorders
• Linkage to Care Across County Systems
• Warm Hand-Offs
• Youth-Focused Prevention
• Medication-Assisted Treatment (“MAT”) for Opioid Use Disorder
• Syringe Services Programs
• Effective Treatment for Opioid Use Disorder for Incarcerated Populations
• Treatment and Recovery for Pregnant and Parenting People
• Naloxone to Reverse Opioid Overdose
• Post-Overdose Response Teams
• Treatment for Neonatal Abstinence Syndrome
• Increasing Access to Evidence-Based Treatment
• Pre-arrest Diversion
• Coordination of Care Upon Release From Incarceration

16. Where can I find examples of counties implementing allowable and evidence-based projects?

Kentucky Counties in Action

National Counties in Action