Washington, D.C.'s fiscal 2027 budget would direct about $2.3 million in opioid settlement money toward the city's Medicaid contribution, a recurring obligation the district has historically paid from its general budget. The commission created to advise the city on settlement spending says that is not what the money is for.
A budget document provided to KFF Health News also shows at least $5.5 million in settlement funds directed to addiction treatment centers previously funded through the general budget. Substituting settlement dollars for general funding keeps overall spending on treatment flat rather than increasing it.
The dispute is a live one, and the outcome is not settled. The budget passed the D.C. Council in June and is now pending a 30-day congressional review, the last step in the district's annual process.
The Budgeting Term at the Center of the Dispute
Chad Jackson, who chairs the district's Opioid Abatement Advisory Commission and is himself in recovery, calls the maneuver supplantation. The term describes a budgeting tactic that shifts money from one fund to another to free up dollars.
The distinction is easier to see than to prove. If settlement money pays for a program the government was already obligated to fund, total spending on the problem does not rise. The general funds that would have covered it become available elsewhere in the budget, and the settlement dollars have effectively financed something other than opioid abatement.
"If the opioid settlement funds were not there, I feel pretty confident that these things would have been funded, because they have to be funded," Jackson said.
The district's opioid litigation law addresses this directly. Money from the district's opioid abatement fund, it states, "shall supplement, and not supplant."
Shelly Weizman, associate director of the Center on Addiction and Public Policy at Georgetown Law's O'Neill Institute, described the statutory language as unambiguous. "Opioid settlement dollars are not meant to be a rainy-day fund for existing government obligations," Weizman said, adding that the law is tightly written and the intent is clear.
The Money and Where It Came From
The national opioid settlements resolved litigation against companies that manufactured or distributed prescription painkillers and were accused of fueling the overdose crisis. State and local governments nationwide are set to receive more than $50 billion over almost two decades. Washington, D.C.'s share is expected to exceed $100 million.
The money is meant to remediate the addiction crisis, often by increasing services or funding new programs.
The pressure driving the dispute is not unique to Washington. States across the country face tightening budgets from inflation, federal funding cuts, and rising costs, and settlement cash has proven a tempting stopgap in more than one jurisdiction.
The Objections and the Agency Response
More than 80 individuals and 30 city organizations signed a letter protesting the planned use, saying the Department of Behavioral Health planned to spend opioid cash to "pay off its own debts." The letter went to department director Barbara Bazron, to Councilmember Christina Henderson as chair of the Council's health committee, and to Attorney General Brian Schwalb.
Henderson and Schwalb then raised their own concerns in a letter to the department sent on July 17. "We are also concerned that DBH may be using the settlement monies for other unauthorized purposes," they wrote, highlighting the $2.3 million used to cover the city's Medicaid contribution and asking the department to explain by July 31 how it determined the use was legal.
Whether the department met that deadline is unclear. KFF Health News reported that the department, Henderson's office, and the attorney general's office did not respond to that specific question.
Department spokesperson Denise Reed said in a statement that the agency is "committed to compliance with all statutory requirements governing opioid settlement funds." Reed said the Council passed a legally certified budget making the best use of all local resources, including the opioid settlement fund, to award grants to 17 community-based providers who last year served nearly 9,800 residents, including 3,500 receiving medication-assisted treatment for opioid addiction.
Queen Adesuyi, a partner at the consulting group Reframe Health and Justice, argued the funds carry a specific mandate. "These funds were awarded to D.C. for very specific reasons and with a specific mandate, which are to remediate issues related to the opioid crisis in new and innovative ways," Adesuyi said, describing the council's approach as a slap in the face.
The Unresolved Questions and the Next Decision Points
No legal or administrative body has determined whether the planned use violates the district's law. The commission's role is advisory, the attorney general has raised concerns rather than issued a formal opinion, and the budget has not completed congressional review.
Two things would clarify the picture. The first is whether the Department of Behavioral Health produced the legal justification requested. The second is whether the attorney general moves from raising concerns to a formal determination.
Residents who rely on district addiction services should not expect an immediate interruption. The disputed line items sustain existing programs rather than eliminating them, which is precisely the objection. Anyone currently in treatment should continue and should not stop medication for opioid use disorder based on budget news.
District residents seeking treatment or naloxone can contact the Department of Behavioral Health's access helpline. Nationally, the SAMHSA National Helpline is available at 1-800-662-4357, free and confidential, around the clock. MedicalDaily has reported on jurisdictions taking a different approach to settlement spending.
Key Questions Answered
What is D.C. proposing to do? Its fiscal 2027 budget directs about $2.3 million in opioid settlement funds toward the city's Medicaid contribution and at least $5.5 million toward addiction treatment centers previously funded from the general budget.
Why is that controversial? The district's opioid litigation law says settlement money must supplement, not supplant, existing funding. Critics say paying an existing obligation with settlement money frees general funds for other uses without increasing total spending on the crisis.
What does supplantation mean? Replacing one funding source with another so the original money becomes available elsewhere. The program continues, but total resources devoted to the problem do not grow.
Has anyone ruled that this is illegal? No. The oversight commission is advisory, the attorney general has raised concerns rather than issued a formal determination, and the budget is still in congressional review.
What does the city say? The Department of Behavioral Health says it is committed to compliance with statutory requirements and that the Council passed a legally certified budget funding 17 community providers who served nearly 9,800 residents last year.
Will treatment services be cut? The disputed items maintain existing programs rather than ending them. No service reductions have been announced. Anyone in treatment should continue and should not stop medication based on budget news.
Where can D.C. residents get help for opioid use? Contact the Department of Behavioral Health access helpline for local services and naloxone. The SAMHSA National Helpline, 1-800-662-4357, is free and confidential and operates around the clock.
