The troubles of HealthSouth Corp., Birmingham, Ala., mounted as the House Energy and Commerce Committee began its own investigation of the rehabilitation services provider. In a letter to acting HealthSouth Chairman Joel Gordon, Rep. Billy Tauzin (R-La.), who heads the energy and commerce committee, said, "It appears that HealthSouth may have engaged in improper accounting practices and falsely inflated its reported revenue and earnings as far back as 1986." The company's financial collapse and alleged fraud raise "serious concerns about the oversight and management of the company" by the board and by internal and external auditors, Tauzin said. The committee also is concerned about the possibility HealthSouth overbilled Medicare and the role Ernst & Young might have played in the alleged accounting fraud. Tauzin gave Gordon until May 6 to answer 29 questions posed by the committee, including providing detailed financial records over the past seven years and internal communications between HealthSouth employees who may have become concerned about fraudulent activity. Tauzin sent Ernst & Young a separate letter requesting similar information. At deadline, HealthSouth officials had not returned calls seeking to determine if the company had received the letter and how it would respond. Attempts to reach Ernst & Young were unsuccessful. -- by Jeff Tieman
House committee begins probe of HealthSouth
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