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Olsten target in Columbia investigation

Olsten Corp. said it is a target of a federal grand jury criminal probe in Florida in connection with its relationship to Columbia/HCA Healthcare Corp.

Melville, N.Y.-based Olsten, the nation's largest provider and manager of home-health services, said it thinks the investigation focuses on home health agencies that it sold to Columbia/HCA and now manages.

"Olsten believes this investigation focuses upon its relationship with Columbia/HCA in connection with the purchase, sale and operation of certain home-health agencies which are now owned by Columbia/HCA and managed under contract by Olsten Health Management," the company said.

Nashville, Tenn.-based Columbia/HCA, the nation's largest hospital chain and a major provider of home health-care services, is the target of a federal criminal investigation into whether it overbilled Medicare.

To date, the only indictments have been handed up by a federal grand jury in Fort Myers. Three Columbia/HCA executives charged with defrauding Medicare have pleaded innocent.

Olsten says it was notified about the grand jury probe by the U.S. attorney's office in the southern district of Florida, based in Miami. Fort Myers is covered by another U.S. attorney's office.

The company gave no other details, except to repeat that the Justice Department and other federal and state agencies "have been conducting investigations into allegations of health-care fraud on the part of Olsten and other health-care providers."

The company said it is cooperating with those investigations. A Justice Department spokeswoman in Washington had no comment.

Olsten previously disclosed that federal authorities are investigating its preparation of cost reports for Medicare reimbursement.