South Dakota Study Urges Opioid Settlement Funds Target Incarcerated Population

South Dakota should direct its share of opioid settlement funds toward treatment for people entering and leaving prisons and jails, according to a comprehensive statewide needs assessment commissioned by the Department of Social Services. The recommendation, delivered to state legislators this week, marks a significant shift in how the state is thinking about its $99 million settlement allocation—and highlights a population often overlooked in addiction policy discussions.

The $325,000 assessment, conducted by an outside research firm, found that justice-involved individuals represent one of the state's most vulnerable populations for opioid use disorder, yet current services fall dramatically short of meeting their needs. Department Secretary Matt Althoff told members of the Legislature's budget committee that the intersection of addiction and incarceration creates particularly severe challenges.

"This is a more intense addiction once you get to that level of opioid use disorder," Althoff said. "We still see, as is so often the case, the justice involvement. Laws get broken, they become incarcerated or they become prosecuted, and they are also struggling with addiction."

The Scale of the Settlement

South Dakota is expected to receive approximately $99 million in opioid settlement funds through 2038, with payments coming from manufacturers and distributors of prescription opioid painkillers found to have contributed to the nation's addiction crisis. The state has already collected $32.8 million, with 70% allocated for statewide programs and 30% distributed directly to local governments.

Thus far, the state has awarded nearly all of its share through a three-tiered grant system, with individual awards ranging from $5,000 to more than $50,000. The largest single grant went to Avera Health for an addiction-focused psychiatric residential treatment facility in Sioux Falls.

But the needs assessment suggests that future allocations should prioritize a different approach—one that recognizes the critical role of medication-assisted treatment for people in the criminal justice system.

The Case for Justice-Focused Treatment

The rationale for targeting incarcerated and recently released individuals is grounded in both public health research and fiscal reality. People with opioid use disorder in jails and prisons face overdose risks far exceeding those of the general population—particularly in the weeks immediately following release, when tolerance has dropped but drug-seeking behavior resumes.

Studies have consistently shown that providing medications for opioid use disorder during incarceration and continuing treatment after release dramatically reduces both overdose deaths and recidivism. A 2018 study in Rhode Island found that offering all three FDA-approved medications—methadone, buprenorphine, and naltrexone—reduced post-release overdose deaths by 61%. Similar programs in other states have shown comparable results.

Yet most correctional facilities, particularly at the county level, do not offer these medications. Even when they are available inside facilities, continuity of care after release remains a persistent challenge. The South Dakota assessment identified this gap as a critical priority.

Current State of Play

The South Dakota Department of Corrections already offers medication-assisted treatment within its institutions, according to Brenna Koedam, who leads the Department of Social Services' Behavioral Health Division. But the department has identified significant concerns about medication availability and follow-up care for individuals after release.

"The two departments have discussed where they might begin with a collaborative effort," Koedam told legislators. One possibility involves establishing eight outside prison locations to provide follow-up care for parolees using these medications.

The Department of Social Services has also begun conversations with the Unified Judicial System about expanding medication access for people on probation. Court system spokeswoman Alisa Bousa said the state courts are interested in "any additional educational and engagement tools that would benefit the probationers."

Addressing Stigma

During the legislative presentation, Koedam addressed a persistent barrier to expanding medication-assisted treatment: stigma and misconceptions about the medications themselves. Despite decades of evidence demonstrating their effectiveness, buprenorphine, methadone, and naltrexone continue to face skepticism from some policymakers, treatment providers, and members of the public.

"We need to continue to get the education out there in regards to how effective these medications can be when administered as part of an addiction treatment program," Koedam said.

The exchange highlighted ongoing tensions in addiction policy. Representative Terri Jorgenson questioned whether medication-assisted treatment represents a lifelong commitment, reflecting a common misconception that these medications simply substitute one addiction for another.

Koedam explained that treatment duration varies by individual. Some patients may use medications for months, others for years, and some indefinitely—similar to how people with other chronic conditions like diabetes or hypertension manage their diseases. The goal is not necessarily to stop the medication, but to achieve stable recovery.

National Context

South Dakota is not alone in grappling with how to allocate opioid settlement funds. States across the country are making similar decisions, with varying degrees of transparency and strategic planning. Some have prioritized treatment infrastructure, others prevention programs, and still others law enforcement initiatives.

The focus on justice-involved populations, however, remains relatively rare. Most states have not conducted comprehensive needs assessments specifically examining this population's treatment gaps. South Dakota's approach—using settlement dollars to fund rigorous analysis before making allocation decisions—represents a model that other states might usefully emulate.

The timing is particularly significant. Overdose deaths nationally have begun to decline after years of increases, but the criminal justice population continues to experience disproportionate mortality. For this group, the settlement represents not just compensation for past harms, but a potential pathway to survival.

Implementation Challenges

Translating the assessment's recommendations into effective programs will require navigating several challenges.

Coordination between the Department of Social Services, Department of Corrections, and court system—historically siloed agencies with different mandates and funding streams—will be essential. The assessment suggests this coordination is already beginning, but sustained commitment will be necessary.

Workforce limitations also present obstacles. South Dakota, like most rural states, faces shortages of addiction treatment providers. Expanding services for justice-involved individuals will require either recruiting additional providers or training existing correctional and community supervision staff—a process that takes time and resources.

Perhaps most fundamentally, the state will need to maintain political commitment across multiple budget cycles. The settlement payments extend through 2038, but priorities can shift with changing administrations and economic conditions. Ensuring that funds continue flowing to evidence-based programs for justice-involved individuals will require ongoing advocacy and accountability mechanisms.

Looking Forward

The South Dakota assessment represents an important step toward treating addiction in the criminal justice system as a public health issue rather than purely a matter of law enforcement. By identifying incarcerated and reentering individuals as a priority population for settlement funds, the state is acknowledging what research has long demonstrated: that punishment without treatment perpetuates cycles of addiction and incarceration, while medication-assisted treatment offers a genuine pathway to recovery.

For the thousands of South Dakotans who will cycle through jails and prisons in the coming years, the decisions made about these settlement funds could mean the difference between life and death. The assessment has provided a roadmap. Whether state leaders follow it remains to be seen.