EXHIBIT 99
TEXT OF INVESTOR RELATIONS SLIDESHOW IN USE BEGINNING
FEBRUARY 4, 2002
FORWARD-LOOKING STATEMENTS
Except for historical information discussed, the statements made today are
forward-looking statements that involve risks and uncertainties. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. These forward-looking statements speak only as of
this date. HEALTHSOUTH undertakes no obligation to publicly release the results
of any revisions to the forward-looking statements made today to reflect events
or circumstances after today or to reflect the occurrence of unanticipated
events. Please refer to the company's SEC filings for a description of some of
the factors that may affect the accuracy of such forward-looking statements.
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OUTPATIENT THERAPY
QUI TAM LAWSUIT
o DOJ Filed Notice of Partial Intervention in Suit by Former Employee - Case
Unsealed January, 2002
o Primary Issue: Concurrent Therapy and Use of Extenders to Assist in Therapy
o Recognized Practice Throughout Industry-Never Challenged Before
o Medicare Outpatient Therapy <1% of Total Revenues
o DOJ Granted 120 Days to File Complaint; HEALTHSOUTH Has Asked to be Served
Now so HEALTHSOUTH Can Move to Dismiss
o HEALTHSOUTH Will Defend Vigorously; National Reimbursement Experts on Defense
Team
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WHAT IS CONCURRENT THERAPY?
o Practice of one licensed therapist treating more than one Medicare
beneficiary at a time
o Each patient is working on an individualized treatment goal
o Concurrent therapy is different from group therapy, where all participants
are working on some common skill development
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CMS ACKNOWLEDGES ROLE OF CONCURRENT THERAPY
o In May 2001, CMS acknowledged in the SNF context that it had not specifically
addressed concurrent therapy in the past
o In July 2001, CMS acknowledged that concurrent therapy had a "legitimate
place in the spectrum of care options available to therapists treating
Medicare beneficiaries" and reiterated that the clinical judgment of the
professional therapist should be the determining factor as to whether
concurrent therapy is appropriate in each case.
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CMS ADDRESSES ISSUE OF CONCURRENT THERAPY
o In its May 10, 2001 proposed rulemaking, 66 Fed. Reg 23984, 23991-92, CMS
questioned whether concurrent therapy services would meet the SNF benefit
coverage criteria. CMS noted that
- -"Medicare relies on the professional judgment of the therapist to determine
when, based on the complexity of the services to be delivered and the condition
of the beneficiary, it is appropriate to deliver care to more than one
beneficiary at the same time."
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CMS RELEASED FINAL SNF PPS RULE ON JULY 31, 2001
o CMS noted that it had "received a large number of comments encouraging us to
continue to recognize concurrent therapy as skilled therapy" and further
stated that
o "[W]e continue to believe...that concurrent therapy has a legitimate place in
the spectrum of care options available to therapists treating Medicare
beneficiaries..."
CONCURRENT THERAPY INVOLVES USE OF THERAPY AIDES AND EXTENDERS
o Medicare regulations, under the caption "Personnel Qualified to Provide
Physical Therapy Services." provide that covered "[p]hysical therapy services
are provided by, or under the supervision of, a qualified physical
therapist."
o Supervised aides and other unlicensed technicians are permitted to render
covered therapy under Medicare regulations
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CPT CODING SYSTEM AND REIMBURSEMENT
o CPT coding system does not distinguish between licensed and unlicensed
therapy providers
o Under cost-based system utilized by Medicare for outpatient therapy services
until January 1, 1999, aides were recognized costs and included in the
construction of the fee schedules now used for reimbursement
o Payment for these services under the CPT code-based system anticipates that
aides will participate in the provision of therapy services
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HEALTHSOUTH'S POSITION ON CONCURRENT THERAPY
o Consistent with CMS, HEALTHSOUTH believes that concurrent therapy is, where
determined in the professional judgment of the professional therapist, an
appropriate way of helping patients reach individualized treatment goals in
accordance with individualized plans of care.
o There is no clinical justification for applying CMS policy differently in
Part B therapy services in an outpatient setting
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Outcome Data
Average Number of Visits per Case
[Graphic omitted]
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Outcome Data
Functional Levels at Admission Compared to
Functional Levels at Discharge
[Graphic omitted]
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Company Overview
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Outpatient Rehab
#1 Market Share - 1,435 Locations
10% of $10 Billion Market
[Graphic omitted]
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Outpatient Surgery
#1 Market Share - 217 Locations
16% of $6 Billion Market
[Graphic omitted]
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Diagnostic Imaging
#1 Market Share - 137 Locations
4% of $8 Billion Market
[Graphic omitted]
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Inpatient Rehabilitation
#1 Market Share - 122 Locations
22% of 35,000 Bed Market (7,755 Beds)
[Graphic omitted]
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HEALTHSOUTH Corporation
National Footprint with Over 1,900 Locations
[Graphic omitted]
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HEALTHSOUTH Corporation
Current MSA Coverage
[Graphic omitted]
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HEALTHSOUTH Corporation
Backfill Opportunities
[Graphic omitted]
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Top Payor Coverage:
Blue Cross/Blue Shield
[Graphic omitted]
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Top Payor Coverage:
United Healthcare
[Graphic omitted]
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Top Payor Coverage:
Aetna
[Graphic omitted]
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Top Payor Coverage:
Cigna
[Graphic omitted]
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Top Payor Coverage:
Humana
[Graphic omitted]
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Top Payor Coverage
[Graphic omitted]
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Leading Sports Relationships
[Graphic omitted]
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Leading Sports Relationships
Unique National Presence
Strong Brand Equity and Relationships with Leading Professional and Amateur
Sports Organizations
[Graphic omitted]
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JV and Strategic Relationships
[Graphic omitted]
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Employer Contracts
Direct Employer Contracts with Fortune 1000 Companies
[Graphic omitted]
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HEALTHSOUTH Revenue
by Product Line
[Graphic omitted]
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PROVIDER OF CHOICE
o Unique National Presence
o Demographics Favor Outpatient Services Over Traditional Acute-Care Offerings
o Our Integrated Service Model Moves the Patient Through the System More
Efficiently
o HEALTHSOUTH Is a Leader in Technological Advances
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HEALTHSOUTH ADDS VALUE TO PATIENTS
o Superior Clinical Care
o Convenience of Ambulatory Setting
o Pristine Facilities
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Recognized Clinical Excellence
2001 JCAHO Survey Results:
HEALTHSOUTH Facility Scores vs. National Average Scores
HEALTHSOUTH Rehabilitation Hospitals 95
National Hospital Organizations 91
HEALTHSOUTH Surgery Centers 95
HEALTHSOUTH Diagnostic Centers 96
National Ambulatory Organizations 93
Source: 2001 JCAHO Survey Results
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PRISTINE AUDIT
o Unannounced Audit of Every HEALTHSOUTH Facility
o 50 Point Checklist
o Conducted by Ernst & Young
o Overall Score of 98
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HEALTHSOUTH ADDS VALUE TO PHYSICIANS
o Superior Clinical Care
o Convenience of Ambulatory Setting
o Dependable Block Times for Surgeons
o Access to Additional Patient Volume
o Ideal Platform for Introducing New Procedures and Technologies
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HEALTHSOUTH Adds Value to Payors
o Lower Cost Per Episode
o Ambulatory Setting More Cost Efficient
Procedure HEALTHSOUTH Acute Care Savings
---------- ----------- ---------- -------
Knee (ACL) $1,607 $2,768 42%
Shoulder $2,259 $4,070 44%
Nasal Septum $1,111 $2,327 52%
o National Provider Network
o Electronic Claims Submission
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GROWTH OPPORTUNITIES
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OUTPATIENT REHAB: GROWTH AREAS
o Functional Capacity Evaluations (FCEs)
- Market Size of Approximately $800MM
o Expand Fitness Center Programs
o Increase Number of Referring Physicians from 85,000 to 100,000
o Increase Number of Annual Referrals per Physician from 35 to 40
- Result: 33% Increase in New Patient Volume
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OUTPATIENT SURGERY: GROWTH AREAS
o Add Surgeons Through Partnership Syndications
- Added 550 New Surgical Partners to Date; Goal of 1,000
- Same Store Volume Up 5 Consecutive Quarters
o Ensure Maximum Utilization by Surgical Partners
o Highlight Physicians through Various Media Outlets
o Introduce New Technologies To Drive Volume
- Trivex (Varicose Veins)
- BEI (GYN Surgery)
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DIAGNOSTIC: GROWTH AREAS
o New Diagnostic Applications
- New Technology Allows High-Speed, High Resolution Organ Scans
- Cardiac CT
- PET Scanners
- Virtual Colonoscopy
o Health, Fitness, and Lifestyle Programs
- Growing Demand from More Educated Consumer Population
- Executive Wellness Programs
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INPATIENT REHAB: GROWTH AREAS
o Expand Relationships with Tertiary-care Hospitals
o Expand Product Lines
- Alliance with American Stroke Association
- Neurological Trauma
o Take Advantage of Acute Care Units/Wings that May be Shut Down Due to PPS
o First Time Ever Marketing to Medicare Patient Population
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REALIZE THE BENEFITS OF PPS
o Effective January 1, 2002
o Received Notification of Payment on First 939 Claims Submitted Under PPS
o Payment was Identical to HEALTHSOUTH's Expected Payment
o Validates HEALTHSOUTH's Analysis of Positive PPS Impact o Projected
Contribution of at Least $0.07 to EPS in 2002
o Upon Full Implementation, Expected Pre-Tax Benefit of Approximately $75MM
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OTHER GROWTH INITIATIVES
o Clinical Trials
- Infrastructure in Place
- 52 Trials Currently in Pipeline
o Nationwide Platform To Roll Out New Devices and Technologies
o New Medical Center
- State of the Art Design To Include Wireless Technologies
- Opening Early 2004 in Birmingham, AL
o Nutritionals
o Health, Fitness and Lifestyle Programs
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Financial Overview
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Revenue Trend
[Graphic omitted]
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EBITDA Trend
[Graphic omitted]
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EBITDA Margin Trend
[Graphic omitted]
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EPS Trend
[Graphic omitted]
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2002 EPS Guidance
Represents 39% Growth
[Graphic omitted]
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Financial Strategy
o 20%+ Hurdle Rate on Growth Opportunities
o Deploy Capital Strategically
o Delivering 15% or Greater EPS Growth
Result: Sustainable, Long-term Growth Company
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Marketing the Future of Healthcare:
Reaching the Consumer
Featuring the Physician
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AGGRESSIVELY MARKET OUR SERVICES
o Emphasize Superior Clinical Care
o Stress Convenience of Ambulatory Setting
o Promote Private Pay Procedures (Plastics)
o Leverage Nationwide Network
o Benefit from Sports Affiliations and Other Branding Methods
Result: Greater Throughput for HEALTHSOUTH and
Physician Base
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Rising Healthcare Costs
Will Benefit HEALTHSOUTH Facilities
o Healthcare Spending Will Double Over the Next Decade to $2.6 Trillion
o 46% of Large Employers Will Require Employees To Pay a Higher Percentage of
Costs by Raising Deductibles and Co-pays
Source: Wall Street Journal, December 10, 2001
Everything We Do is Cost Effective and Gets the Patient Off the Healthcare
Dollar and Moves Them through the System Quickly
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Rising Healthcare Costs
Will Benefit HEALTHSOUTH Facilities
o Increasing Popularity of Medical Savings Accounts
o Incentive for Consumer to Research Providers for Quality/Cost
o Incentive for Consumer to Practice Preventative Measures
o Increasing Consumer Control Over Healthcare Choices
Source: Wall Street Journal, December 10, 2001
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HEALTHSOUTH Media & Marketing Network: It Starts with the People
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[Series of graphic effect slides omitted]
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And is Supported by Our Multiple Media Properties
[Graphic omitted]
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Consumer Publications
[Graphic omitted]
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Go For It!
[Graphic omitted]
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HEALTHSOUTH Back to Health
[Graphic omitted]
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HEALTHSOUTH Media Initiatives
[Graphic omitted]
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HEALTHSOUTH Media Initiatives
"4 Point Effect"
[Graphic omitted]
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Coming in May 2002:
HEALTHSOUTH Presents: "Behind the Game" on Fox Sports Net
[Graphic omitted]
o Focus on HEALTHSOUTH Star Physicians and Services
o Feature HEALTHSOUTH Professional Sports Associations and Athletes
o Consumer Focused Health Lifestyle Information That Educates and Builds Demand
o Powerful Marketing Tool for HEALTHSOUTH Brand and Its Physicians
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Case Study
Dr. John McWilliams
Los Angeles, CA
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Case Study
o Dr. McWilliams Increased His Cases in HEALTHSOUTH Surgery Center from Average
of 8 per Month to 16 Cases per Month after the Back to Health TV Story
[Graphic omitted]
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HEALTHSOUTH
The Healthcare Company of the 21st Century
o Produce High-Quality, Low-Cost Healthcare Services
o Aggressively Market Our Services
o Provide Superior Outcomes
o Expand Our Company
o Operate the Best Managed Company in America
o Produce Consistent Financial Results
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Summary
o Leading Provider in Core Business Lines & One of the Largest Healthcare
Providers in the US
o Network of High-Quality, State-of-the-Art Facilities
o Delivering the Highest Quality Patient and Physician Experience Available
o Projected 39% Earnings Growth in 2002
o Providing Innovative Marketing Services, Opportunities and Products that
Create Consumer Demand and Physician Loyalty
o Perfectly Positioned To Build the World's Leading Health Lifestyle Company