(Updated) Willing to do what former Gov. M. Jodi Rell’s administration wasn’t, Lt. Gov. Nancy Wyman and Office of Policy and Management Secretary Ben Barnes said Tuesday that they will move about 556,000 Medicaid recipients to a self-insured plan by Jan. 1, 2012.

The move away from a Managed Care Organization model to a model where the state will assume the risk will save the state “tens of millions” of dollars, Barnes said at a Capitol press conference. However, with only a week to go before the release of the first budget of the Malloy administration, he wasn’t willing to put an exact pricetag on the measure.

Advocates like Ellen Andrews, executive director of the Connecticut Health Policy Project, praised the move saying it will allow the state to be more innovative with how it chooses to deliver health care.

Andrews and Sheldon Toubman of New Haven Legal Aid, who have been promoting Primary Care Case Management for low-income families on the state’s HUSKY plan, welcomed the announcement Tuesday.

Under PCCM primary care doctors get paid $7.50 per patient, per month to make sure their patients get the medical attention and services they need. The three Managed Care Organizations currently running the HUSKY program didn’t appreciate the model because it cut them out of the picture and the Department of Social Services was having a difficult time marketing it.

Andrews said the self-insured Administrative Services Organization model also brings more transparency to the program, which accounts for close to $4 billion in state spending, or about 21 percent of the state’s total budget.

The model also allows the state to collect a tremendous amount of claims data that will in turn allow it to see which delivery models are working best for the various populations, Wyman said.

It will no longer have to rely on the MCO’s to provide it with information, which means greater efficiency and better control of the Medicaid programs, Barnes said.

But how much care coordination or incentive for cost-savings will there be?

“I think it’s a mistake to think the ASO model we’re proposing is unmanaged,” Barnes said. “The way we’re structuring the RFP is to provide significant care management through the ASO model.”

The contract the state plans on putting out to bid in March will include populations covered under HUSKY A & B, Charter Oak, Aged Blind and Disabled, and Low Income Adults. Click here and here to read the articles about the last time the program was put out to bid.

Some MCO’s refused to bid on the combined HUSKY and Charter Oak contract a few years ago because they didn’t want to disclose information about what they were paying medical providers. Barnes said the ASO model pretty much gets rid of that concern since the incentive for the insurance companies is the number of lives covered under the plan.

“We can really watch where the dollar is being spent this way,” Wyman said. “This is true transparency we have not seen before.”

And she said the savings won’t just be for fiscal year 2012, but they will be ongoing because people on the plan won’t be ending up in the emergency room where care costs more. It also better positions the state to take advantage of opportunities under the Patient Protection and Affordable Care Act.

In addition to moving to a self-insured plan, Barnes and Wyman said they are trying to move about 5,200 individuals that receive nursing home care back into the community under “Money Follows the Person.”

The goal is to expand the program to 890 individuals by the end of 2012 and 5,200 through 2016.

The state plans on using about $21 million, mostly in federal funds, over next five years to rebalance number of individuals in nursing homes and those receiving care in their own homes and communities. The state will receive an enhanced match from the federal government to help nursing home residents and their staff make the transition to home care.

In his budget address next week Malloy will include funding to support the transition of 2,251 nursing home residents to the community by the end of fiscal year 2013. This is in addition to the 411 individuals the state has already helped through a pilot program.

The AARP praised the announcement Tuesday.

“His proposal not only recognizes and reinforces the success of the Money Follows the Person, but lays out a bold vision that over time will save the state money, while providing thousands of older residents with what they want – the ability to live independently in their homes and communities as they age,” Brenda Kelley, AARP CT’s executive director, said. ““We are hopeful that today’s announcement is an indication of the administration’s willingness to maximize additional funding opportunities under the Affordable Care Act for health and long-term care enhancements.”