HealthSouth Corp., Birmingham, Ala., said it will split its ambulatory services division into separate units for outpatient rehabilitation and diagnostic services. HealthSouth said the move should help the company focus on the performance of its 127 diagnostic imaging centers. During an investor presentation in July, management said the imaging centers could be sold if their performance does not improve. Spokesman Andy Brimmer said today that HealthSouth intends to keep the centers. The company also announced that William Horton, executive vice president and corporate counsel, and Brandon Hale, executive vice president of administration and corporate secretary, have resigned. Horton plans to enter private law practice in Birmingham, while Hale is pursuing other business opportunities, Brimmer said.
Brimmer also confirmed a report in the Birmingham News that HealthSouth will have to write off a $2.2 million investment in MedCenterDirect, Atlanta, an online purchasing company whose investors also included HealthSouth founder Richard Scrushy. According to securities filings, HealthSouth also guaranteed $15 million in loans to MedCenterDirect and purchased $174.6 million in goods, supplies and services through the company. In an unrelated development, the House Energy and Commerce Committee voted unanimously to issue subpoenas in its investigation of HealthSouth's accounting, Medicare billing and corporate governance practices. The committee granted Chairman Rep. Billy Tauzin (R-La.) and John Dingell (D-Mich.) the authority to approve subpoenas. In prepared remarks, Tauzin said he expects the committee's subcommittee on oversight and investigations to conduct hearings as soon as this month. -- by Vince Galloro