Encompass Health
Corporate brand
UnclaimedA major United States operator of inpatient rehabilitation hospitals and provider of facility-based rehabilitative care.
Last updated August 21, 2026
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Overview
Encompass Health Corporation is a Birmingham, Alabama-based healthcare company focused primarily on inpatient rehabilitation. Through a nationwide network of rehabilitation hospitals, it treats patients recovering from stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal-cord injuries, complex orthopedic conditions, amputations, and other disabling illnesses or injuries. Its clinical model generally combines medical oversight with physical, occupational, and speech therapy, with the objective of helping patients regain function and return to daily life or community settings. The company was incorporated in 1984 as Amcare, Inc. by Richard M. Scrushy and four co-founders. It initially operated outpatient rehabilitation facilities, reflecting Scrushy's view that therapy could often be delivered more efficiently outside acute-care hospitals. The company adopted the HealthSouth name in 1985, acquired its first inpatient rehabilitation hospital in 1986, and completed an initial public offering later that year. During the 1990s, HealthSouth expanded rapidly through acquisitions into inpatient and outpatient rehabilitation, ambulatory surgery, diagnostic imaging, occupational health, and acute-care hospitals. Its 1997 purchase of Horizon/CMS Healthcare significantly enlarged the rehabilitation platform, while other transactions made the company one of the largest providers in several healthcare categories. That expansion was followed by one of the most serious accounting scandals in the history of a United States public company. Between 1996 and 2003, senior executives falsified financial results on a large scale to meet market expectations. The misconduct became public in 2003 after federal investigations and disclosures by executives. The company replaced its senior leadership, restated its accounts, was temporarily delisted from the New York Stock Exchange, and undertook a major financial and operational restructuring. The fraud was later estimated at approximately $2.7 billion. HealthSouth avoided bankruptcy and gradually rebuilt its reporting systems, governance, and operating model. Under chief executive Jay Grinney, appointed in 2004, the company narrowed its focus. It sold or exited its outpatient rehabilitation, surgery-center, diagnostic-imaging, and most acute-care hospital businesses between 2006 and 2008. The resulting company concentrated on inpatient rehabilitation while continuing to develop a smaller home-health and hospice platform. It acquired Encompass Home Health & Hospice in 2014 and subsequently expanded through transactions involving CareSouth, Camellia Healthcare, Alacare, and Frontier Home Health and Hospice. The 2015 acquisition of Reliant Hospital Partners added 11 inpatient rehabilitation hospitals. In 2018, HealthSouth changed its corporate name to Encompass Health Corporation, aligning the corporate identity with its inpatient rehabilitation and home-based care businesses. In 2022, the home health and hospice operation was separated into Enhabit, Inc., leaving Encompass Health principally focused on inpatient rehabilitation hospitals. The company continues to operate in the United States and Puerto Rico and is publicly traded under the symbol EHC.
History
Encompass Health began as Amcare, Inc. in Birmingham, Alabama, in 1984. Richard M. Scrushy and four co-founders established the business to provide outpatient rehabilitation services, supported by founder investment and venture financing. The first facility opened in Little Rock, Arkansas, followed by a Birmingham site. In 1985, the company became HealthSouth Rehabilitation Corporation and entered inpatient rehabilitation through the purchase of its first hospital in 1986. It went public on Nasdaq in August 1986 and moved to the New York Stock Exchange in 1989. During the early and mid-1990s, HealthSouth expanded through facility development and acquisitions. The purchase of rehabilitation assets from National Medical Enterprise in 1993 made it the largest United States provider of inpatient and outpatient rehabilitation at that time. The company later acquired ReLife, entered diagnostic imaging and ambulatory surgery, and purchased additional rehabilitation, surgery, occupational-health, and imaging businesses. Its 1997 acquisition of Horizon/CMS Healthcare further increased its presence in rehabilitation and long-term care, although some acquired long-term-care assets were subsequently sold. By the end of the decade, HealthSouth had become a highly diversified healthcare operator with thousands of facilities and international operations. The company's growth model and financial reporting collapsed in the early 2000s. Executives had inflated reported results from 1996 through 2003, with the misconduct eventually estimated at roughly $2.7 billion. The crisis intensified after a 2002 earnings shortfall and stock sales by Scrushy prompted regulatory scrutiny. In 2003, executive disclosures and federal investigations exposed the accounting scheme. Scrushy and other senior executives were removed or replaced, the company cooperated with investigators, and HealthSouth was delisted from the NYSE. It hired Alvarez & Marsal to support financial restatements and negotiations with lenders. Despite fears of insolvency, the company secured financing and continued operating. The recovery involved a fundamental change in strategy. Jay Grinney became president and chief executive officer in 2004, joined by new finance and operations leaders. The company closed or sold underperforming operations, reduced corporate overhead, and disposed of assets associated with its former expansion strategy. It sold its Southside medical center to the University of Alabama at Birmingham in 2006 and divested outpatient rehabilitation, surgery-center, and diagnostic-imaging divisions during 2007. HealthSouth also sold its headquarters campus and unfinished Digital Hospital project in 2008, retaining a residual interest in part of the property. After the restructuring, the company concentrated on inpatient rehabilitation. It expanded by constructing hospitals and purchasing rehabilitation assets from other hospital systems. In 2014 it acquired Encompass Home Health & Hospice, adding a larger home health and hospice platform, and followed with acquisitions including CareSouth, Camellia Healthcare, Alacare, and Frontier Home Health and Hospice. The 2015 Reliant Hospital Partners transaction added 11 inpatient rehabilitation hospitals. The corporate name changed from HealthSouth to Encompass Health in 2018. In 2022, the home health and hospice business was separated as Enhabit, Inc. Encompass Health thereafter remained primarily a hospital-based rehabilitation company, serving patients with neurological, cardiac, pulmonary, orthopedic, spinal-cord, brain-injury, and amputation-related conditions through facilities in the United States and Puerto Rico.
- 2022
Enhabit separation
[1]The home health and hospice segment is spun off as Enhabit, Inc.
- 2018
Corporate rebranding as Encompass Health
[1]HealthSouth Corporation adopts the Encompass Health name.
- 2015
Reliant Hospital Partners acquired
[1]Eleven inpatient rehabilitation hospitals are added to the network.
- 2014
Encompass Home Health & Hospice acquired
[1]The acquisition expands the company's home-based care activities.
- 2006
Restructuring reaches major reporting milestone
[1]HealthSouth files its first delayed quarterly report since 2002 and is later relisted on the NYSE.
- 2003
Accounting scandal revealed
[1]Investigations expose extensive financial fraud and trigger leadership replacement and restructuring.
- 1997
Horizon/CMS Healthcare acquisition announced
[1]The large acquisition strengthens HealthSouth's rehabilitation and long-term-care portfolio.
- 1993
National Medical Enterprise rehabilitation assets acquired
[1]The transaction substantially expands HealthSouth's inpatient and outpatient rehabilitation network.
- 1986
First inpatient rehabilitation hospital acquired
[1]HealthSouth enters hospital-based inpatient rehabilitation and completes its initial public offering.
- 1985
HealthSouth name adopted
[1]The company changes its name to HealthSouth Rehabilitation Corporation.
Products and positioning
A specialized, large-scale post-acute healthcare provider centered on hospital-based rehabilitation and functional recovery.
Hospital-based rehabilitation · 1986
Inpatient rehabilitation hospitals
The company's principal offering is medically supervised inpatient rehabilitation for patients who are stable enough to leave acute care but still require intensive therapy and nursing support. Hospitals commonly serve people recovering from stroke, neurological disease, brain or spinal-cord injury, cardiac or pulmonary illness, complex orthopedic procedures, and amputations. Care typically integrates physician oversight with physical, occupational, and speech-language therapy.
Home-based care · 2014
Home health and hospice
HealthSouth developed home health and hospice operations through acquisitions, including Encompass Home Health & Hospice. This business provided clinical care and support in patients' homes, but it was separated from Encompass Health in 2022 and became Enhabit, Inc.
Controversies
2003
HealthSouth accounting fraud scandal
Senior executives were accused of directing employees to falsify earnings and financial statements between 1996 and 2003. The fraud was uncovered through executive disclosures and federal investigations, led to the removal of the executive team, and resulted in extensive restatements and restructuring. The misconduct was later estimated at approximately $2.7 billion.
Brand decisions
2022
Separation of EnhabitM&ABackground
The company evaluated its portfolio and sought a clearer strategic focus for hospital-based rehabilitation.
Action taken
Encompass Health separated its home health and hospice business into Enhabit, Inc.
Aftermath
Encompass Health became principally focused on inpatient rehabilitation hospitals.
2018
Adoption of the Encompass Health identityStrategyBackground
The HealthSouth name remained associated with the company's earlier diversified model and accounting crisis.
Action taken
The corporation changed its name to Encompass Health Corporation.
Aftermath
The new identity became the principal brand for its rehabilitation and home-based care businesses.
2014
Expansion into home health and hospiceM&ABackground
The company sought to complement hospital-based rehabilitation with post-acute care delivered in patients' homes.
Action taken
HealthSouth acquired Encompass Home Health & Hospice and subsequently expanded the platform through additional acquisitions.
Aftermath
Home health and hospice became a significant operating segment until its 2022 separation as Enhabit.
2006
Refocus on inpatient rehabilitationStrategyBackground
The company needed to simplify its business and restore financial credibility after the accounting scandal.
Action taken
HealthSouth announced plans to sell, spin off, or otherwise dispose of its surgery, outpatient, and diagnostic divisions and used a reverse stock split in connection with its return to the NYSE.
Aftermath
The divestitures transformed HealthSouth into a more focused inpatient rehabilitation operator.
Recent events
Reported
Encompass Health announces Christopher Reidy's board appointment[3]
Encompass Health announced the appointment of Christopher R. Reidy to its board of directors, effective October 1, 2021.
Reported
Encompass Health names Mark Miller senior vice president[4]
Encompass Health announced Mark Miller's appointment as senior vice president of investor relations and strategic planning, effective September 7, 2021.
Reported
Encompass Health completes acquisition of Frontier Home Health and Hospice[5]
Encompass Health announced that it completed its acquisition of Frontier Home Health and Hospice. The acquisition added home health and hospice locations in Alaska, Montana and Washington and expanded the company’s presence in Colorado and Wyoming.
Sources5 sources
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