The Healthsouth Debacle
The HealthSouth Debacle:
A Legal and Ethical Perspective
Jay Buntemeyer
Regis University
Abstract
HealthSouth Corporation is the largest operator of rehabilitation hospitals in the United States. Since the company’s inception in 1984, HealthSouth has garnered the attention of Wall Street and millions of investors. However, the attention was because the iconic HealthSouth was involved in one of the largest accounting fraud scandals in United States history. HealthSouth’s founder and CEO, Richard M. Scrushy, was also the inventor of the entire scheme that defrauded the government and private investor out of $2.5 billion dollars. The HealthSouth scandal provides a look at several different legal cases involving civil and criminal charges, as well as administrative liabilities. HealthSouth also provides ample opportunity to evaluate the ethical implications of its behavior. The HealthSouth debacle still leaves one with several unanswered questions. How did HealthSouth avoid detection for so long? Could this scandal have been detected earlier? HealthSouth is an excellent example of corporate turmoil from a legal and ethical perspective. Keywords: Scrushy, HealthSouth scandal, fraud, criminal litigation, civil trials.
The HealthSouth Debacle: A Legal and Ethical Perspective
Company Overview
HealthSouth Corporation (HealthSouth) is one of the largest providers of inpatient rehabilitative health care services in the United States (Reuters, 2009, para. 1). HealthSouth was incorporated in the state of Delaware in 1984 as Amcare, Inc. before changing its name to HealthSouth Corporation in 1985 (Reuters, 2009 & “Funding Universe,” 2000). From that day, HealthSouth set about expanding its business and becoming a health care icon. By 1988, HealthSouth was operating a vast network of facilities: 21 outpatient facilities, 11 inpatient facilities and 7 rehabilitation centers. The HealthSouth network spanned across 15 states and was just beginning to spread
A Legal and Ethical Perspective
Jay Buntemeyer
Regis University
Abstract
HealthSouth Corporation is the largest operator of rehabilitation hospitals in the United States. Since the company’s inception in 1984, HealthSouth has garnered the attention of Wall Street and millions of investors. However, the attention was because the iconic HealthSouth was involved in one of the largest accounting fraud scandals in United States history. HealthSouth’s founder and CEO, Richard M. Scrushy, was also the inventor of the entire scheme that defrauded the government and private investor out of $2.5 billion dollars. The HealthSouth scandal provides a look at several different legal cases involving civil and criminal charges, as well as administrative liabilities. HealthSouth also provides ample opportunity to evaluate the ethical implications of its behavior. The HealthSouth debacle still leaves one with several unanswered questions. How did HealthSouth avoid detection for so long? Could this scandal have been detected earlier? HealthSouth is an excellent example of corporate turmoil from a legal and ethical perspective. Keywords: Scrushy, HealthSouth scandal, fraud, criminal litigation, civil trials.
The HealthSouth Debacle: A Legal and Ethical Perspective
Company Overview
HealthSouth Corporation (HealthSouth) is one of the largest providers of inpatient rehabilitative health care services in the United States (Reuters, 2009, para. 1). HealthSouth was incorporated in the state of Delaware in 1984 as Amcare, Inc. before changing its name to HealthSouth Corporation in 1985 (Reuters, 2009 & “Funding Universe,” 2000). From that day, HealthSouth set about expanding its business and becoming a health care icon. By 1988, HealthSouth was operating a vast network of facilities: 21 outpatient facilities, 11 inpatient facilities and 7 rehabilitation centers. The HealthSouth network spanned across 15 states and was just beginning to spread