Several more HealthSouth Corp. employees are expected to plead guilty to criminal charges today in connection with allegations of massive accounting fraud at the rehabilitation giant based in Birmingham, Ala., the U.S. attorney's office there said. Two former chief financial officers and a former vice president already have struck deals with authorities admitting their participation in a scheme to overstate earnings by $1.4 billion and inflate assets by about $800 million since 1999. No charges have been filed against the company's founder and former CEO, Richard Scrushy, who was fired last week by the board, but those who have and are expected to plead guilty are or will be cooperating with federal prosecutors as the probe continues.
Meanwhile, company officials announced today they will eliminate about 165 nonclinical positions at the corporate headquarters, or about 20% of the workers there. Officials said patient care has not been affected by the sweeping investigation of its accounting practices and billing procedures. "HealthSouth is committed to ensuring that patient care services continue to be uninterrupted at its traditional high levels of quality," the statement said. "As the company gets back to the basic business of healthcare, it continues to assess resources and expenditures that do not directly impact patient care."