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Blue Cross, Fallon post big earnings

The state’s largest commercial health insurance companies, citing seasonal improvements in their business and a decline in medical claims tied to the sluggish economy, yesterday posted robust financial results for the three months ending Sept. 30.

But two of the four health insurers saw their third-quarter net income narrow from a year ago, when all reported strong increases over the prior year.

Blue Cross Blue Shield of Massachusetts, the state’s largest health plan, led the pack in the most recent quarter, ringing up net income of $78.9 million compared with the $75.8 million it earned a year ago.

The Blue Cross financial report came on a day when the Boston-based insurer disclosed that it is at a near-impasse in contract negotiations with Tufts Medical Center and its doctors, who have given notice that they plan to terminate their Blue Cross contract in January.


Blue Cross said it was pressing forward with its campaign for health care affordability, both by managing its own administrative expenses and by holding down reimbursement increases for doctors and hospitals.

The negotiations with Tufts, which are being closely watched in the state’s health care industry, could prove to be a major test for Blue Cross.

Fallon Community Health Plan, based in Worcester, recorded net income of $12.2 million, an increase from the $7.2 million that it earned in the same period in 2010.

But Watertown-based Tufts Health Plan reported net income of $52.6 million in the July-to-September period, down from $59 million in the corresponding period last year. Tufts Health Plan is not affiliated with Tufts Medical Center in Boston.

The second-largest health insurer in Massachusetts, Harvard Pilgrim Health Care based in Wellesley, reported third-quarter net income of $37.9 million, a reduction from its income of $44.5 million in the same quarter last year.


Robert Weisman can be reached at weisman@globe.com.