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Report: HealthSouth billed Medicare for A-list entertainers

Compliance Monitor, February 9, 2005

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With former chief executive officer Richard Scrushy's trial already under way, the going got tougher for Birmingham-based rehab giant HealthSouth after a February 13 story in The Birmingham News reported that the corporation billed Medicare to cover costs of having country singers Faith Hill, Reba McIntire, and the band Alabama play at company functions.

According to the report, HealthSouth already admitted to improperly billing Medicare for entertainment when it entered a $325 million settlement with the Justice Department in December. The agreement did not name the entertainers involved.

The Birmingham News reported that the information came from former HealthSouth officials who were not identified. They said that the entertainers named were hired to perform at the company's annual "prom" between 1996 and 2001, an event "culminating two days of meetings by about 1,000 of HealthSouth's medical center heads, top executives, board members, and guests," the Associated Press reported. According to the December settlement, HealthSouth passed along all of these entertainment costs to Medicare.

A former spokesperson for Scrushy denied the report, telling The Birmingham News that any billing to Medicare from the annual meetings "had to be negligible" and that this allegation was overblown by the government, "likely for [public relations] effect to show the government was doing its job."

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