Medical company defends services - East Valley Tribune: Business

Medical company defends services

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Posted: Monday, March 31, 2003 11:19 pm | Updated: 1:57 pm, Thu Oct 6, 2011.

While HealthSouth Corp. barreled towards possible bankruptcy amid federal accusations of accounting fraud, company representatives insist the scandal will not affect patient care.

"On a local level, it's business as usual," said Michele Kuechler, sales and marketing director of HealthSouth's physical therapy, surgery and diagnostic facilities located at 9522 E. San Salvador Drive in Scottsdale.

After reading media reports about the medical company, some patients have asked if their health care provider is going bust, and "don't want any thing to do with HealthSouth," Kuechler said.

"I have nothing to say as far as corporate goes," she said. "People at the lower levels are doing their jobs and giving 120 percent."

The federal government is suing Birmingham-based HealthSouth, accusing the company of inflating profits by $1.4 billion since 1999 to meet Wall Street expectations.

HealthSouth has said its financial statements can no longer be relied upon.

The company on Monday fired chairman and CEO Richard Scrushy, and announced it would fire longtime outside auditor Ernst & Young. Two former HealthSouth chief financial officers pleaded guilty to federal fraud charges.

The Justice Department also has joined a whistle-blower civil suit that claims HealthSouth inflated charges to Medicare.

HealthSouth calls itself the nation’s largest provider of outpatient surgery, diagnostic imaging and rehabilitation services. It has some 50,000 employees and 1,700 facilities in all 50 states and abroad, including 39 facilities in Arizona.

There are HealthSouth facilities in Scottsdale, Paradise Valley, Mesa, Tempe and Gilbert.

While lenders blocked the company from paying $367 million in bond and interest debt due today, moving the company closer to possible bankruptcy, HealthSouth is still able to pay bills for day-to-day medical operations, said spokesman Ernie Knewitz.

"Checks are being written, vendors are being paid," Knewitz said. "Patients should be confident that we're committed to continuing that quality of care."

The company is conducting an internal audit to determine its true value, Knewitz said, and it is looking at selling some ‘‘noncore’’ assets to raise cash.

But Kuechler said media reports exaggerating the ramifications of the investigation are threatening her center.

"Corporate (headquarters) is not putting our jobs in jeopardy, the press is," she said.

The New York Stock Exchange suspended trading in HealthSouth shares and was seeking to delist the company last week.

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