HealthSouth Corp. booked artists like Faith Hill, Reba McIntire and the band Alabama for its annual management meetings at Disney World between 1996 and 2001, then billed Medicare to cover the cost, a

HealthSouth Corp. booked artists like Faith Hill, Reba McIntire and the band Alabama for its annual management meetings at Disney World between 1996 and 2001, then billed Medicare to cover the cost, according to a report in the Birmingham (Ala.) News.

HealthSouth had previously acknowledged improperly billing Medicare for lavish entertainment and other expenses as part of a $325 million settlement announced by the Justice Department in December, but the agreement did not mention who performed at the meetings. A News story yesterday (Feb. 13) cited HealthSouth officials as disclosing the names of the entertainers.

The entertainers performed at an awards banquet known as "the prom," culminating two days of meetings by about 1,000 of HealthSouth's medical center heads, top executives, board members and guests. Between 1998 and 2001, all were invited to bring spouses and children, with all those expenses improperly passed along to Medicare, according to the government settlement.

Charlie Russell, a spokesperson for former HealthSouth CEO Richard Scrushy, told the newspaper any billing to Medicare from the annual management meetings "had to be negligible." He said HealthSouth's new management put it in the settlement "likely for PR effect to show the government was doing its job."

Scrushy, now on trial on criminal charges accusing him of directing systematic accounting fraud at HealthSouth, told the News that the Orlando meetings gave the company a boost of "tens of millions of dollars" as managers shared cost-saving strategies and other information. Scrushy said each of the events cost around $1 million.

But HealthSouth spokesperson Andy Brimmer said company records show the meetings often cost much more, with the 2002 meeting running more than $3.2 million. He said the company's new management hopes to cut the cost of the annual meetings by "eliminating extravagant entertainment, spousal related travel expenses, and other discretionary costs."

Brimmer said the company will return to Orlando this year only because of a long-term contract signed when Scrushy was CEO.


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