This story has been updated.
NEW CASTLE — Behavioral Health Consortium members reaffirmed support for Delaware’s opioid settlement funding process Tuesday, after Attorney General Kathy Jennings’ June 28 call to halt grants amid concerns about potential fraud and abuse.
In the body’s first meeting since the attorney general’s letter to its subcommittee — the Prescription Opioid Settlement Distribution Commission, which develops funding recommendations for the consortium — members gave final approval to two phases of support, totaling over $1.9 million.
It’s part of roughly $15 million unanimously earmarked by the commission May 28 to support dozens of nonprofits’ treatment and recovery initiatives for mental health and substance use disorders exacerbated by the opioid crisis.
In 2023, Delaware’s overdose death statistics saw a slight decrease for the first time in a decade — a 1.8% year-over-year reduction.
This year, as of May, the state has experienced 156 such deaths, compared to 211 from January to May 2023, according to the My Healthy Community Dashboard.
The commission’s grants stem from the attorney general office’s December 2022 settlements with a number of pharmaceutical companies for their role in the state’s opioid crisis. The settlements totaled $250 million, which is being administered to nonprofits and state agencies.
But contention surrounding the distribution of these funds came to a head with Ms. Jennings’ letter to commission members in June. The letter came one month after she raised concerns that, as a regulator, funds “must be carefully scrutinized to avoid misuse and abuse.”
In the letter, Ms. Jennings — who co-chairs the distribution commission with Lt. Gov. Bethany Hall-Long and is a member of the consortium — presented a timeline of coordination with the commission's executive director Susan Watson Holloway and requests that the group develop a “thoughtful plan of action,” including for auditing and accountability.
She wrote that no plan for measuring program efficacy was ever addressed or proposed “nor was any plan for monitoring compliance or auditing grantees.”
“This project is rife with potential for fraud, waste, and abuse — and correspondence with the State Auditor has left me gravely concerned that at least one grantee appears to have engaged in wrongdoing with significant State and/or federal funds, including its Commission grant,” she wrote.
Ms. Jennings added that, while the grantee — Code Purple Kent County — is entitled to a “presumption of innocence,” the discrepancies “severely exacerbate my already serious misgivings that our Commission has woefully inadequate guardrails in place to protect the public’s best interests.”
“I am therefore strongly recommending an immediate and complete freeze on new grants by the Commission until (the consultant) Social Contract completes the recommendations it was hired to produce,” she stated.
While Social Contract works to develop recommendations on how the state can maximize its opioid settlement funds — a report due in September — the issues surrounding Code Purple have been referred to the Department of Justice’s White Collar Crime Unit.
The Code Purple matter spurred from a letter sent to Ms. Jennings by State Auditor Lydia York on June 12. The auditor noted that, when undertaking a performance audit on the nonprofit’s opioid grant, office staff “encountered significant challenges in establishing trust regarding the accuracy and authenticity of the documents.”
In 2023, the organization received $570,000 to open a day center for individuals experiencing homelessness, addiction and mental health disorders, and to start a program to provide opioid use disorder wraparound services.
It had received $290,000 of those funds, but $280,000 has been frozen by the state since December 2023.
The Department of Justice's Civil Division has also been asked to explore whether the commission is able to claw back the grant that Code Purple was awarded, an agency spokesperson said Wednesday.
During the grant awarding process, each recipient must submit monthly compliance data with the Prescription Opioid Settlement Distribution Commission, according to Ms. Holloway. The standards are comprised of over 60 data points in alliance with the Johns Hopkins Principles for the Use of Funds From the Opioid Litigation, a baseline that serves states throughout the nation.
Further, grantees are required to demonstrate data and financial compliance before funds are received, which are released once a quarter. From there, monthly data is supplied to commission staff, analyzed and shared publicly on the body’s website. Each grant recipient is then assigned a monitor, which is a commission staff member who is a source for regular communication, conducts site visits and ensures compliance.
When Prescription Opioid Settlement Distribution Committee staff noticed inconsistencies in Kent County Code Purple’s data, it triggered a manual review of the information, according to Ms. Holloway.
Afterwards, funding was frozen in the interim while commission staff conducted two site visits. Following the visits and subsequent review, funding was permanently frozen in December 2023 and Kent County Code Purple has not received monies since.
In concurrence, the commission notified the Department of Justice that the funds were being frozen, and afterwards, the issue was then referred to the State Auditor’s Office.
During Tuesday’s meeting at the Buena Vista conference center, Behavioral Health Consortium members pushed back on the Jennings letter and contended there are safeguards in the distribution process.
“I have had conversations with ... (Ms. Jennings), who is aware that the (consortium) today is working and voting on very vital, important bridge dollars for the three-month extension that is necessary and that we had no new date set for new funding, that there was going to be feedback items provided to us by Social Contract,” Lt. Gov. Hall-Long said.
“So, I just wanted to make that clear and say that, today, I am here to be supportive.”
In also backing the funding, Dave Humes, a founding board member of atTAcK addiction, noted that, when the commission voted to release the roughly $15 million in May, no members outright opposed the move.
He also said that, despite issues surrounding Code Purple, the state should not squander its opportunity to build on the positive overdose death trend it saw last year.
Further, Sen. Stephanie Hansen, D-Middletown, said she was “shocked” to read Ms. Jennings’ letter, especially considering the commission met hours before it was sent. Sen. Hansen, who also serves on the consortium, said such worries had never been raised to the entity’s members.
It was the senator who, during the 150th General Assembly in 2019, led the effort to establish Delaware’s Prescription Opioid Impact Fee, a rate paid by pharmaceutical manufacturers based on the strength of their opioids. The fees have generated grant funds for addiction services in Delaware.
“It mentions (that) … we’re sitting in inactivity in adopting a strategic plan, rubber-stamping spending on a first-come, first-serve basis. Is that what we’re doing here? That’s not what I’ve seen we’re doing,” an emphatic Sen. Hansen said.
“You cannot be the co-chair of the commission and the chief prosecutor of the commission at the same time. We need our attorney general as the co-chair, and if things have gotten to such a level that an incendiary letter like this has to come out, accusing everyone on the commission of somehow (giving) out money willy-nilly, that’s not going to work for anybody.”
When consortium members moved to a vote on each phase of the bridge funding, a proxy for Ms. Jennings abstained to do so. Regardless, each measure received widespread support.
The Behavioral Health Consortium’s next meeting will take place on Oct. 15 The Prescription Opioid Settlement Distribution Commission will hold its next meeting July 29.
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