HealthSouth Corp Settlement

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The Justice Department has announced that HealthSouth Corp has agreed to pay the U.S. government 325 million dollars to settle numerous allegations that the company defrauded Medicare and other government health programs.

The Birmingham-based HealthSouth is the nation's largest provider of medical rehabilitation services and has been struggling to emerge from a criminal investigation into an alleged accounting fraud that inflated company earnings by some 2.6 billion dollars. Seventeen people have been charged in that investigation, including the former chief executive officer, Richard Scrushy, whose trial is scheduled to begin next week.

The settlement announced Thursday grew out of a lawsuit filed in San Antonio by several whistleblowers under the federal False Claims Act. One of the whistleblowers will receive 8.1 million dollars of the settlement, with others receiving lesser amounts.