To win back the confidence of doctors who have invested in its ambulatory surgery centers, HealthSouth Corp. says it will distribute first-quarter profits to them on Friday rather than at the usual time at the end of the month.
Andy Brimmer, spokesperson for the Birmingham, Ala.-based company, said today that HealthSouth sent letters last Wednesday to doctor-investors at its 203 ASCs, stating that the early payments are meant to be "a tangible sign of our continued commitment and good faith."
He would not reveal how much HealthSouth is paying out. In most cases, he says, HealthSouth owns controlling interest in its ASCs.
Even though the company is $1.25 billion in default to its bank lenders, Brimmer says HealthSouth's ASCs and its inpatient and outpatient rehab units "seem encouragingly resilient."
"We have adequate cash on hand to continue to operate normally," he adds.
HealthSouth and former executives, including former Chairman and CEO Richard Scrushy, are under federal investigation for allegedly overstating earnings by nearly $2.5 billion since 1997.
But Brimmer says the alleged inflated earnings will affect HealthSouth corporate offices and not its ASCs and rehab units, HealthSouth's "core group."
HealthSouth reported last week that lenders headed by JPMorgan Chase Bank and Wachovia Securities have agreed not to press for payments on loans until May 1. By that time, Brimmer says, HealthSouth officials hope to have a bridge loan in place or a new agreement with the lenders to keep it out of Chapter 11 bankruptcy.
Even in the event of bankruptcy, Brimmer says the finances of HealthSouth's ASCs and other units ought to be safe.
"People are looking to that core group to keep generating cash because that's how lenders are going to have a recovery," he says.