Ousted chief executives typically remain tight-lipped after an abrupt, painfully public dismissal and rarely do they return to a former employer. But Richard Scrushy wants to return as the chief executive officer of HealthSouth Corp., the company he founded and was dismissed from after it became embroiled in a $2.64 billion fraud scandal.
He won't step down from the Birmingham, Ala.-based company's board of directors. His attorneys insist Scrushy's 2003 termination was illegal and he belongs back in charge--an idea HealthSouth's directors have flatly rejected, according to news reports.
The CEOs who left for-profit hospital chains HCA and Tenet Healthcare Corp. and the former not-for-profit Allegheny Health, Education and Research Foundation amid turmoil moved on and never looked back, an informal Modern Healthcare survey found.
Richard Scott left HCA in July 1997 as a rash of civil and criminal fraud inquiries into what was then known as Columbia-HCA Healthcare Corp. became public. Scott resigned less than two weeks after investigators raided 18 Columbia-HCA hospitals in six states. The HHS' inspector general's office issued the company three subpoenas and five of its employees received grand jury subpoenas. Ultimately, HCA brokered two massive settlements in 2000 and 2002 worth a combined $1.74 billion to wrap up fraud charges.
Scott quickly moved on, even though his $9.9 million severance included a five-year consulting contract with HCA. He launched Richard L. Scott Investments the same month he left HCA, according to his biography as a director of Cyberguard Corp., a technology firm. Scott Investments, based in Stamford, Conn., has stakes in companies in manufacturing, catalog retail and healthcare, including Pharmaca Integrative Pharmacy, a retail pharmacy chain where Scott is also a director. Scott did not return calls seeking comment.
Pittsburgh-based AHERF fired CEO Sherif Abdelhak in June 1998, shortly before filing for Chapter 11 bankruptcy. Abdelhak ultimately spent three months in jail after pleading no contest to siphoning charitable endowments to shore up the disastrously overextended not-for-profit health system.
Four former AHERF hospitals now operate as West Penn Allegheny Health System, Pittsburgh, and Dallas-based Tenet purchased another eight. Abdelhak hasn't worked for either health system, say spokespersons for West Penn Allegheny and Tenet. Efforts to reach Abdelhak were unsuccessful.
Nor has Jeffrey Barbakow worked for Tenet since he resigned as CEO in May 2003, said Tenet spokeswoman Teresa Wolke. Barbakow stepped down as inquiries into Tenet's Medicare outlier payments mounted. Barbakow, who netted $111 million in 2002 after exercising 2 million stock options and left with a $6.6 million severance package, declined to comment through his attorney, Patricia Glaser.