To improve the description of electrostatic interaction between QM and MM atoms when the QM is SCC-DFTB, we adopt a Klopman-Ohno (KO) functional form which considers the finite size of the QM and MM charge distributions. Compared to the original implementation that used a simple Coulombic interaction between QM Mulliken and MM point charges, the KO based QM/MM scheme takes charge penetration effect into consideration and therefore significantly improves the description of QM/MM interaction at short range, especially when the QM region is highly charged. To be consistent with the third-order formulation of SCC-DFTB, the Hubbard parameter in the KO functional is dependent on the QM charge. As a result, the effective size of the QM charge distribution naturally adjusts as the QM region undergoes chemical transformations, making the KO based QM/MM scheme particularly attractive for describing chemical reactions in the condensed phase. Together with the van der Waals parameters for the QM atom, the KO based QM/MM model introduces four parameters for each element type. They are fitted here based on microsolvation models of small solutes, focusing on negatively charged molecular ions, for elements O, C, H and P with a specific version of SCC-DFTB (SCC-DFTBPR). Test calculations confirm that the KO based QM/MM scheme significantly improves the interactions between QM and MM atoms over the original point charge based model and it is transferable due to the small number of parameters. The new form of QM/MM Hamiltonian will greatly improve the applicability of SCC-DFTB based QM/MM methods to problems that involve highly charged QM regions, such as enzyme catalyzed phosphoryl transfers.