In the battle to determine how managed care organizations spend $625 million of taxpayer dollars running Medicaid, the Department of Social Services has always backed the MCOs’ contention that the corporations don’t perform a government function, and thus shouldn’t have to follow Freedom of Information laws.But under orders from the governor’s office, DSS abruptly reversed course today, announcing it would no longer contest a hearing officer’s decision that the MCOs do perform a government function. The full Freedom of Information Commission unanimously adopted that decision today, meaning the insurers and their battery of lawyers will have to head to court if they wish to continue to evade public scrutiny.FOIC Chairman Andrew O’Keefe makes a point as Yale’s Kari Hartwig and attorney Sheldon Toubman (right) listen. Hartwig and Toubman won their fight against corporate insurers today, but they might have to enjoy it while it lasts.

DSS’s reversal came via fax just moments before the commission began its meeting this afternoon. It meant lawyers for the MCOs had to contest the hearing officer’s decision without any official government backing. For months, Gov. M. Jodi Rell has prodded DSS to turn over documents about Medicaid to an assortment of advocates for the poor. While DSS slowly complied with that directive, the department still sided with the corporations on the central question of whether the MCOs performed a government function. It meant DSS essentially signed off on the corporations’ efforts to keep documents secret regarding how they spent millions of taxpayer dollars. Advocates wondered if low reimbursement rates from the MCOs made some specialists unwilling to treat Medicaid clients.  DSS maintained its position as late as December 5, five days after the hearing officer’s decision, and four days after Attorney General Richard Blumenthal sent a letter to DSS Commissioner Patricia Wilson-Coker supporting it.“I urge that you avoid contesting or litigating this issue further,” Blumenthal wrote on December 1.Apparently DSS didn’t heed his advice, because on December 5, the department’s lawyer sent a letter to the commission reaffirming DSS’s pro-corporate position.It was only after Rell’s legal counsel Kevin Rasch called Wilson-Coker that DSS changed course, according to gubernatorial spokesman David Dearborn.“The governor’s legal office told the commissioner to refrain from taking the government function argument further,” Dearborn said. At the meeting today, lawyers for the insurers failed to sway FOI commissioners, who decided unanimously to adopt the hearing officer’s report. “I think this is an important ruling for the public, for the taxpayers, so they can directly hold these large state contractors accountable,” said attorney Sheldon Toubman of New Haven Legal Assistance Association.The ruling orders DSS to amend its contracts with the insurers, making the corporations comply with FOI law. The insurers are free to walk away from their contracts if they do not want to live by the new rules, Toubman said.Asked if she was surprised by DSS’s reversal, Linda Morkan, counsel for Health Net and Well Care of Connecticut Inc., cracked a small smile. “Nothing surprises me anymore,” she said. Morkan did not say whether her client would appeal the FOIC’s decision.Toubman said he fully expects a court challenge, but hopes Blumenthal’s office will now be free to defend the ruling because DSS has reversed itself.