Inquiry expands to potential Medicare fraud

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Friday, March 28, 2003 | 9:44 a.m.

BIRMINGHAM, Ala. -- Officials are investigating whether executives at HealthSouth used the illegal accounting scheme that has rocked the company as a means of cheating Medicare out of tens of millions of dollars, the New York Times reported.

The investigation of possible manipulation of Medicare reimbursements represents what could be a new front in the inquiry into the accounting scandal at HealthSouth, which was set in motion last week when a company executive admitted to participating for years in the scheme with HealthSouth's top officers.

It has the potential of transforming the case from a fairly routine accounting scandal into an unparalleled fraud.

The inquiry could raise doubts about the true financial performance of HealthSouth's hospitals and health care facilities, which would have filed the documents seeking reimbursement from Medicare.