HealthSouth Corp., Birmingham, Ala., and two physicians agreed to pay $14.9 million to settle allegations that HealthSouth paid illegal kickbacks to the physicians in exchange for referring patients to some of the companys facilities, the U.S. Justice Department announced. Specifically, the settlement involves claims HealthSouth submitted to Medicare and Medicaid for patients referred by Birmingham orthopedic surgeons James Andrews and Lawrence Lemak, who in separate agreements will pay a combined $700,000 to resolve their liability in the arrangement. HealthSouths settlement also addresses alleged improper financial relationships with other physicians, including a group in Los Angeles, whom the government continues to investigate, the Justice Department said in a news release. The problematic claims were uncovered in an internal investigation in 2004 and 2005 after new management took over for Chief Executive Officer Richard Scrushy, who was fired in 2003 and later acquitted of accounting fraud, though he was sentenced this summer to seven years in prison for his role in a bribery scheme. The new HealthSouth is dedicated to a corporate culture characterized by integrity, quality and compliance, President and CEO Jay Grinney said in a written statement. The company disclosed the settlement payment to investors and the Securities and Exchange Commission in its third-quarter financial report.
HealthSouth, docs agree to $14.9 million settlement
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