HealthSouth settles with government for $7.9 million

HealthSouth Corporation, the country's largest provider of outpatient surgery, diagnostic imaging, and rehabilitative health care services, agreed to pay $7.9 million to settle allegations of health care fraud, the U.S. Department of Justice announced May 23.

The settlement resolves allegations that the Birmingham, Alabama-based company overcharged Medicare and the TRICARE program for equipment and supplies purchased from G.G. Enterprises, a corporation owned by the parents of HealthSouth’s CEO. The government alleged that HealthSouth improperly billed these items at a price above G.G. Enterprises’ costs.

The settlement also resolves allegations that HealthSouth overbilled the health care programs for rental payments and the costs of an abandoned computer system. The investigation was triggered by Greg Madrid, a billing clerk formerly employed by HealthSouth, who will receive $1.48 million.