Hartford - In a stark reversal of her signature policy initiative, Gov. M. Jodi Rell announced late Friday afternoon that three insurers may sign up doctors and hospitals to cover clients of the state's HUSKY program without also enrolling them in her new plan for uninsured adults.

The announcement decouples HUSKY from the new Charter Oak Health Plan, Rell's market-based, no-frills health program for the uninsured, and is intended to speed up the development of doctor and hospital networks for the children and families covered under HUSKY A and B - the state programs that administer Medicaid and other federal funds in Connecticut.

About half of the clients in the roughly 300,000-person HUSKY program were scheduled to be shifted into new insurance plans at the end of the year, when a contract with an exiting insurer, Anthem Blue Care, was scheduled to expire. Rell and Commissioner Michael P. Starkowski of the state Department of Social Services also said the Anthem contract would be extended by one month to allow for a smoother transition - just hours after the administration had insisted it would be allowed to expire on schedule.

Rell's decision represents an awkward acknowledgement of what a broad swath of health care experts and elected officials had long maintained: Concerns about the costs of participating in the market-based Charter Oak Health Plan were discouraging doctors and hospitals from signing up to provide HUSKY coverage.

A spokesman for the governor, Christopher Cooper, said Rell remains “completely committed” to Charter Oak, which has enrolled about 2,300 clients since its debut last summer.

”The concept is still strong, but the pragmatic situation on the ground caused the governor and the commissioner to change course today,” said David S. Dearborn, a spokesman for the social services department. “That situation on the ground saw slower-than-needed growth in the networks.”

”This is a positive step and I'm pleased with Gov. Rell finally deciding to separate Charter Oak and HUSKY, and also to help us have time to make sure that both ... work,” said Sen. Jonathan Harris, D-West Hartford.

Harris said the growing concern about ripple effects from disrupting HUSKY and forcing clients into insurance plans with insufficient doctors to treat them had forced Rell's hand.

”I think that the wall was in front of them,” he said Friday night. “That the limits of what the governor was trying to accomplish and what we had been saying was going to occur for eight months ... finally was right up in their face, and there was no choice but to do this.”

The problem networks are those of Aetna Better Health and Americhoice, two managed-care companies that won contracts to cover clients of both programs. A third company, the nonprofit Community Health Network of Connecticut, already covers HUSKY clients and has a sufficient network.

Representatives for Anthem were taken aback by the state's move, and said they were still trying to determine whether the state would be required to accept new bids from insurers seeking to provide coverage.

Rell's announcement came as discontent with the planned changes to HUSKY boiled over among legislators and health policy experts, and as it became clear that health care providers and the insurers were negotiating around Charter Oak, about which many continue to express serious doubts.

In a Friday morning meeting of the Medicaid Managed Care Council, which has oversight over the management of the entitlement program, lawmakers clashed with administration. Then Joyce Hess, the director of managed care contracting for Danbury Health Systems and Danbury Hospital, dropped a bombshell: Her institution had contracted to treat HUSKY clients, but would not be participating in Charter Oak.

The program, which is designed to have the appeal of a no-frills commercial plan, but offers reimbursements starting as low as those for Medicaid clients, is “fundamentally flawed,” Hess said.

”I think until there is a really serious discussion where we own up to that we have a real problem, I don't think you're going to get a lot of hospitals that sign up,” she said, adding that if Charter Oak had been removed from negotiations with the new insurers “we would have signed these contracts months ago.”

Her argument paralleled that of some Rell critics who charge that combining Charter Oak with HUSKY would unnecessarily risk destablizing the established and successful program for needy children.

”We're not taking Charter Oak,” Hess said. “... And if I'm told that we're going to take the HUSKY A and B folks and just throw them under the bus because we've got Charter Oak out there, that's pretty sad.”

The meeting triggered an impassioned outburst from David Parella of the Department of Social Services, an architect of the Charter Oak plan.

”We're not mean-spirited people, and we're not stupid,” Parella said. “We have a difficult proposition to deal with, and we're stretching the dollars as best we can. Beyond that, I don't have a simple answer for you. Health reform-anybody who thought health reform, in this state, or any other state was going to be easy, it would have been done a long time ago.”

T.MANN@THEDAY.COM

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