Olsten says settlement near

Home health chain Olsten says it’s nearing a settlement of a federal probe relating to its business deals with embattled Columbia/HCA. Under a preliminary agreement with the Justice Department, Olsten would settle two federal investigations by paying $61 million, including $10 million in fines, according to a statement by CEO Edward Blechschmidt. In addition, Kimberly Home Health Care, an Olsten subsidiary, will plead guilty to criminal charges that Blechschmidt did not identify. He did carefully note that Olsten would continue to provide health services, which indicates that there will be no exclusion from Medicare. Olsten had been under investigation for alleged involvement in a scheme in which Columbia paid a bargain price for Olsten home health agencies, and then paid an artificially high management fee to Olsten to manage those agencies. Columbia could then put those fees on its cost reports and have Medicare pay for them. Meanwhile, settlement talks continue between Columbia and the Justice Department. Columbia also has been accused of bulking up its cost reports with improper expenses, and several executives of its Florida operations have been indicted.