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Ottawa County lawsuit holds up distribution of some MI opioid settlement funds

Macro of oxycodone opioid tablet bottle
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Michigan local governments are supposed to get about $400 million from a national opioid lawsuit settlement for substance abuse treatment and prevention.

But so far, they haven’t. That’s because Ottawa County has filed a lawsuit contesting how the money will be distributed.

The lawsuit contends that there are two major problems with the settlement. The first is that local units of government don’t have the means or authority to run treatment and prevention programs. It also challenges the formula used for distributing the funds among local entities.

Doug Van Essen, an attorney representing Ottawa County, said giving the money to local governments doesn’t make sense, because they don’t have the public health infrastructure to administer it. He said only a handful of Michigan counties have community mental health departments or authorities, and those can only treat people for substance abuse if they have a co-occurring mental health diagnosis.

“You can only treat if the patient, irrespective of ability to pay, has a diagnosis and otherwise qualifies for community mental health treatment,” Van Essen said. “The settlement here has been organized without any consideration whatsoever for the limitations of the public health system.

“We have a situation here where a lot of money is being distributed to public entities that cannot effectively spend it.”

Van Essen said the state plans to create an effective distribution network for its own half of the settlement funds. He said that ideally, the state would distribute the money directly to people in need of services.

“It seems to us that rather than taking $400 million and distributing it to 260 municipalities that have no plan for it, they would take the whole $800 million and run it through this organized, carefully-constructed state system,” Van Essen said. “And it's ironic that the state would be so careful for its own funds, and so careless with half of these funds.”

The lawsuit also challenges the formula that decides how much money each local government receives. Per the settlement terms, the funds are distributed according to three criteria: the number of people diagnosed with opioid use disorder in a county, the number of opioid overdose deaths that have occurred there, and the amount of opioids distributed in the county.

“The model is designed not to favor small, medium, or large counties based only on their population,” according to a state description of the allocation model. “Although population is taken into account indirectly, because each of the three factors above tends to increase with population, the model allocates global settlement funds proportionally to where the opioid crisis has caused actual harm.

“There are no perfect mechanisms to measure the three factors. To ensure that the model is as unbiased and transparent as possible, the model uses only data collected and reported by the federal government. This is critical because the model follows the reporting mechanisms deemed most relevant by federal public health authorities.”

But Van Essen said the formula is flawed for several reasons. For one, he argued that the funds will be distributed over the next 20 years based on 2018 data. He said it makes more sense for the state to dole out funds based on population. Ottawa County is scheduled to receive $2.6 million over the course of the settlement.

But Ottawa County’s lawsuit has left some state and local officials frustrated and unhappy. Last week, Michigan Attorney General Dana Nessel called out the lawsuit on her Facebook page.

“Ottawa County is the only local unit of government in America to contest their allocation of the national multi-billion dollar opioid settlement,” Nessel wrote. “As a result, none of the other 82 counties in Michigan have received their settlement funds which could be used immediately to combat and prevent opioid addiction and abuse… Michigan is the only state in America not to have received their funding for local governments as a result of Ottawa County's decision to file suit on this matter (even though they did not participate in any litigation regarding this matter while the settlement was being negotiated).”

“What happens in Ottawa County does not necessarily stay in Ottawa County. Ottawa "impacts" all of Michigan.”

Sarah Cwiek joined Michigan Radio in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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