A group of health care advocates and providers asked the federal government Monday to reverse the state’s decision to lower reimbursement rates for medical providers that participate in the HUSKY health insurance program.

In a joint letter to the Centers for Medicare and Medicaid Services the group disputed the Department of Social Services’ decision earlier this year to change how the program for 400,000 low-income families and children reimburses doctors.

Based on legislation the state social service agency changed language in its 2009 waiver which allowed the three insurance companies that administer the program to pay doctors equal to or greater than the traditional fee-for-service Medicaid rates in order to ensure doctors participated in the HUSKY program.

The group noted that the legislature increased state reimbursements in order to raise the floor on which Medicaid rates are based and negotiating lower rates flies in the face of both the Medicaid waiver and legislative intent.

“We note that the legislature has not reduced the appropriations for providers under the Medicaid program or in any way signaled a retreat from its intentions regarding HUSKT provider rates, recognized by DSS in its November 2008 press release stating that providers are paid under the managed care program no less than they would be paid under the fee-for-service program,” the letter written by New Haven Legal Aid Attorney Sheldon Toubman says.

Two years ago the state put the HUSKY program out to bid for the first time in 10 years and there have been several changes to the program, which faced obstacles in getting its networks of doctors and hospitals back up to speed.

“Now, the system is back to what it was for at least a decade before 2008,“ David Dearborn, spokesman for the Department of Social Services, said. “It doesn’t necessarily mean the doctors are going to get less than the ‘Medicaid floor,‘ but the managed care organizations can negotiate with providers on a greater range.”

Lawmakers expressed concern about giving the three insurance companies a greater ability to negotiate rates with doctors at the Nov. 12 Medicaid Managed Care Council meeting.

But Mark Schaefer, director of medical care administration for the Department of Social Services, told the Medicaid Managed Care Council on Nov. 12 that from 1995 to 2008 the program operated without a floor which gave the companies a greater ability to negotiate. And while the three insurance companies made $18.8 million in profits in 2009, the state is hoping to capture some of the savings in this latest round instead of allowing it to go back to the insurance companies.

Enrollment in the HUSKY program has increased as the economy has deteriorated and at least one Medicaid Managed Care Council member wondered if the state could create a trigger if it thinks access to care has been reduced by the change.

Schaefer said it would look and see if it was possible to negotiate something with Aetna Better Health, AmeriChoice, and Community Health Network. The contracts are still being negotiated and Schaefer said he’s not able to share the exact calculations with lawmakers and council just yet.

“DSS is in a difficult position because we need to achieve critical savings in the state budget, and we’re in contract renegotiations with HUSKY managed care plans toward that end,” Dearborn said. “At the same time, we will continue to work with the legislature’s Medicaid oversight council, medical providers, federal officials and others to address any concerns about HUSKY members’ access to care.”

According to the Office of Fiscal Analysis the Department of Social Services currently has a $185 million deficiency in its 2010 budget.