EXHIBIT 99.1

                                                           FOR IMMEDIATE RELEASE
                                                                  March 31, 2003

                      HEALTHSOUTH ANNOUNCES BOARD ACTION ON
                RICHARD M. SCRUSHY; COMPANY TO SEEK NEW AUDITORS

BIRMINGHAM, Alabama - HEALTHSOUTH Corporation (OTC Pink Sheets: HLSH) announced
today that its Board of Directors had, by unanimous vote of the outside
directors, declared HEALTHSOUTH's Employment Agreement with Richard M. Scrushy
null and void and removed him from his positions as Chairman of the Board and
Chief Executive Officer. The Board's action was effective as of March 19, 2003,
the date on which the Board placed Mr. Scrushy on administrative leave.

In a March 30 letter to Mr. Scrushy, Acting Chairman of the Board Joel C. Gordon
advised Mr. Scrushy of the Board's action, under which Mr. Scrushy's rights to
any payments, benefits or perquisites under his Employment Agreement were
terminated as of that date. While, under applicable law, the Board is unable to
remove Mr. Scrushy as a director of the company, the letter to Mr. Scrushy also
requested that he resign as a director of HEALTHSOUTH. The letter further
advised him that, in the event that the company is required to restate its
financial statements for any prior period as a result of misconduct, Mr. Scrushy
would be required under the Sarbanes-Oxley Act to forfeit to the company any
bonuses or other incentive-based or equity based compensation and any profits
from the sale of HEALTHSOUTH securities received during the twelve-month period
following the filing of any such financial statements. The company has reserved
all of its rights against Mr. Scrushy, and is committed to full cooperation with
all pending investigations by governmental authorities.

In addition, the Audit Committee of the Board of Directors has determined to
replace Ernst & Young LLP as HEALTHSOUTH's independent auditors. The company
expects to make the transition to a new independent auditor as soon as possible.

As previously announced, the Board has engaged the turnaround advisory firm of
Alvarez & Marsal Inc., to manage all finance and administrative functions for
HEALTHSOUTH. Bryan P. Marsal, a founding managing director of the firm, has been
appointed Chief Restructuring Officer of the company. Mr. Marsal and his team
have begun work and are immediately implementing measures to stabilize the
company's operations, conserve its cash and reduce costs, including evaluating
the sale of non-core assets, without disrupting patient care services. As also
previously announced, the Board has engaged PricewaterhouseCoopers to provide
forensic auditing services to the Board's Special Audit Review Committee and has
engaged Skadden, Arps, Slate, Meagher & Flom LLP as lead coordinating legal
counsel to assist it in corporate, restructuring and litigation matters.




HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic
imaging and rehabilitative healthcare services, with nearly 1,700 locations in
all 50 states, the United Kingdom, Australia, Puerto Rico, Saudi Arabia and
Canada. HEALTHSOUTH can be found on the Web at www.HEALTHSOUTH.com.

Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, HEALTHSOUTH, through its senior
management, may from time to time make forward-looking public statements
concerning the matters described herein. Such forward-looking statements are
necessarily estimates based upon current information, involve a number of risks
and uncertainties and are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. HEALTHSOUTH 's actual results
may differ materially from the results anticipated in these forward-looking
statements as a result of a variety of factors, including those identified in
this press release and in the public filings made by HEALTHSOUTH with the
Securities and Exchange Commission, including HEALTHSOUTH's Annual Report on
Form 10-K for the year ended December 31, 2001 and its Quarterly Reports on Form
10-Q, and forward-looking statements contained in this press release or in other
public statements of HEALTHSOUTH or its senior management should be considered
in light of those factors. There can be no assurance that such factors or other
factors will not affect the accuracy of such forward-looking statements.

    For more information, contact:

    Media                                    Investors
    -----                                    ---------
    Ernie Knewitz                            Susan Noonan or David Walsey
    Euro RSCG Life NRP                       Euro RSCG Life NRP
    205-410-2777                             205-969-7559


                                      ###