Fraud
HealthSouth Corporation Case Study
By Robert H. Barr, Jr. - © 2012
In 2002, HealthSouth Corporation was one of North America’s largest outpatient surgery, rehabilitation and diagnostic imaging companies. HealthSouth had over 1800 facilities in all 50 states plus the United Kingdom, Australia, Puerto Rico, Canada and Saudi Arabia. In
2002 HealthSouth had over 50,000 people on staff in sales revenues in excess of $4 billion per year. HealthSouth worked with more than 85,000 referring physicians and had contracts with
Walmart, Goodyear, Delta, JetBlue and Anheuser-Busch, among other large corporations, and provided coverage for the PGA of America and its various sectors (including the LPGA and
Senior PGA). HealthSouth could claim as patients celebrities such as Michael Jordan, Bo
Jackson, Roger Clemens, Shaquille O’Neal, Scottie Pippin and Terry Bradshaw.
In 1984, Richard M. Scrushy (pronounced Scroo-shee) and four coworkers founded
AmCare and opened its first outpatient center in Birmingham, Alabama. In 1985 AmCare changed its name to HealthSouth rehabilitation Corporation. Its annual revenues in 1985 were approximately $5 million.
In September 1986 HealthSouth made its initial public offering of stock. The 1986 profit of HealthSouth was $1.1 million and Scrushy’s pay was $225,000.
Might 1990 HealthSouth had expanded to 50 outpatient locations across the United
States. In 1992 Scrushy’s pay had increased to $1.2 million.
1993 was another year for growth for HealthSouth. In 1993 HealthSouth became the largest provider of rehabilitation services after acquiring rehab clinics from Tenet healthcare. In addition in 1993, Scrushy and others founded Med Partners, Inc., a physician management company. This company did very well until 1998 when a merger deal collapsed. Scrushy hired a new CFO who transformed the company into Caremark Rx.
In 1994, the number of HealthSouth locations increased to 250 across the United States.
In 1995, HealthSouth
By Robert H. Barr, Jr. - © 2012
In 2002, HealthSouth Corporation was one of North America’s largest outpatient surgery, rehabilitation and diagnostic imaging companies. HealthSouth had over 1800 facilities in all 50 states plus the United Kingdom, Australia, Puerto Rico, Canada and Saudi Arabia. In
2002 HealthSouth had over 50,000 people on staff in sales revenues in excess of $4 billion per year. HealthSouth worked with more than 85,000 referring physicians and had contracts with
Walmart, Goodyear, Delta, JetBlue and Anheuser-Busch, among other large corporations, and provided coverage for the PGA of America and its various sectors (including the LPGA and
Senior PGA). HealthSouth could claim as patients celebrities such as Michael Jordan, Bo
Jackson, Roger Clemens, Shaquille O’Neal, Scottie Pippin and Terry Bradshaw.
In 1984, Richard M. Scrushy (pronounced Scroo-shee) and four coworkers founded
AmCare and opened its first outpatient center in Birmingham, Alabama. In 1985 AmCare changed its name to HealthSouth rehabilitation Corporation. Its annual revenues in 1985 were approximately $5 million.
In September 1986 HealthSouth made its initial public offering of stock. The 1986 profit of HealthSouth was $1.1 million and Scrushy’s pay was $225,000.
Might 1990 HealthSouth had expanded to 50 outpatient locations across the United
States. In 1992 Scrushy’s pay had increased to $1.2 million.
1993 was another year for growth for HealthSouth. In 1993 HealthSouth became the largest provider of rehabilitation services after acquiring rehab clinics from Tenet healthcare. In addition in 1993, Scrushy and others founded Med Partners, Inc., a physician management company. This company did very well until 1998 when a merger deal collapsed. Scrushy hired a new CFO who transformed the company into Caremark Rx.
In 1994, the number of HealthSouth locations increased to 250 across the United States.
In 1995, HealthSouth