Exhibit 10.33.3

SECOND ADDENDUM TO THE

CORPORATE INTEGRITY AGREEMENT

BETWEEN THE

OFFICE OF INSPECTOR GENERAL

OF THE

DEPARTMENT OF HEALTH AND HUMAN SERVICES

AND

HEALTHSOUTH CORPORATION

I.

PREAMBLE

Effective January 1, 2005, HealthSouth entered into a Corporate Integrity
Agreement (CIA) with the Office of Inspector General (OIG) of the United States
Department of Health and Human Services (hereinafter referred to as the "CIA").
HealthSouth hereby enters into this Second Addendum to the CIA (Second Addendum)
to amend the CIA. Contemporaneously with this Second Addendum, HealthSouth is
entering into a Settlement Agreement with the United States to settle claims
involving arrangements with certain physicians and physician groups.

This Second Addendum sets forth additional corporate integrity obligations for
HealthSouth. All other sections of HealthSouth's CIA and the First Addendum to
the CIA will remain unchanged and in effect, unless specifically amended herein
or upon the prior written consent of the OIG and HealthSouth.

II.

TERM AND SCOPE OF THE SECOND ADDENDUM TO THE CIA

A.         The period of compliance obligations assumed by HealthSouth under
this Second Addendum shall be contemporaneous with the period of compliance
obligations assumed under HealthSouth's CIA. The effective date of this Second
Addendum shall be the date on which the final signatory of this Second Addendum
executes this Second Addendum (Effective Date). For purposes of this Second
Addendum, each "Reporting Period" shall correspond to the "Reporting Period" as
defined in the CIA.

B.         Sections III, IV, VI, VII, VIII, IX, X, and XI of the CIA and the
First Addendum to the CIA (First Addendum) are hereby incorporated into this
Second Addendum by reference and Sections III, IV, VI, VII, VIII, IX, X, and XI
of the CIA and the First Addendum shall expire as to this Second Addendum no
later than 120 days after OIG's receipt of: (1) HealthSouth's final annual
report pursuant to this Second Addendum; or (2) any additional materials
submitted pursuant to OIG's request, whichever is later.

 

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III.

INTEGRITY REQUIREMENTS

 

HealthSouth shall, for a period of no less than the remaining term of the CIA:

A.      Continue Implementation of Arrangements Compliance Program. HealthSouth
shall continue to implement its Compliance Program with respect to arrangements
with referral sources (Arrangements Compliance Program), as described in the
attached Declaration (which is incorporated by reference as Appendix F), and
continue to provide, at a minimum, the same level of resources currently
provided, throughout this time period. HealthSouth may amend its Arrangements
Compliance Program as it deems necessary, so long as those amendments are
consistent with the overall objective of ensuring compliance with the
requirements of Medicare, Medicaid, and all other Federal health care programs,
as defined in 42 U.S.C. § 1320a-7b(f).

B.       Annual Reporting Requirements. HealthSouth shall submit to the OIG
annually a report with respect to the status of, and findings regarding,
HealthSouth's compliance activities for each of the remaining Reporting Periods
(Annual Report).

The Annual report shall include the information required by Section V.B. of the
CIA, as amended in the First Addendum. In addition, Section V.B of the CIA, as
amended in the First Addendum, is also amended by the addition of the following
items which must be included in each Annual Report:

22.   A description of any material amendments to the Arrangements Compliance
Program, as described in Appendix F;

23.   A summary of any significant changes or amendments to the Arrangements
Policies and Procedures (as defined in Appendix F) related to arrangements
between HealthSouth and any referral sources.

24.   Any material changes to the level of resources dedicated to the
Arrangements Compliance Program and the reasons for such changes;

25.   A summary of each type of training provided under the Arrangements
Compliance Program, as described in Appendix F, including a summary of topics
covered, the length of sessions, a schedule of training sessions, and the number
of individuals required to be trained; the percentage of individuals actually
trained; and an explanation of any exceptions.

 

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26. A summary of the Annual Arrangements Review as defined in Appendix F), and
any corresponding corrective action plan;

 

The first Annual Report shall be received by OIG no later than 120 days after
the end of the first Reporting Period, which is December 31, 2007. Subsequent
Annual Reports shall be received by the OIG no later than the anniversary date
of the due date of the first Annual Report.

 

IV.

BREACH AND DEFAULT PROVISIONS

 

HealthSouth is expected to fully and timely comply with all of its CIA
obligations. Section X of the CIA is hereby incorporated by reference into this
Second Addendum.

 

V.

EFFECTIVE AND BINDING AGREEMENT

 

Unless explicitly indicated in this Second Addendum (including Appendix F), all
other terms and provision of the CIA and First Addendum are incorporated into
this Second Addendum by reference and shall remain in full force and effect.

 

[Signatures on following pages.]

 

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On Behalf of HealthSouth Corporation

 

 

 

 

 

 

/s/ Christine Bachrach

 

 

12/14/07

Christine Bachrach

Senior Vice-President and Compliance

 

 

Date

 

 

 

 

 

 

/s/ Scot T. Hassleman

 

 

12/14/07

SCOT T. HASSLEMAN

Reed Smith LLP

Counsel for HealthSouth Corporation

 

 

Date

 

 

 

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ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL

OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

 

 

 

/s/ Gregory E. Demske

 

 

12/14/07

GREGORY E. DEMSKE

Assistant Inspector General for Legal Affairs

Office of Counsel to the Inspector General

U.S. Department of Health and Human Services

 

 

Date

 

 

 

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APPENDIX F DECLARATION

The declarant is currently the Senior Vice-President and Compliance Officer for
HealthSouth and has personal knowledge of the facts stated herein. The following
describes the Compliance Program with respect to arrangements with referral
sources (the "Arrangements Compliance Program") at HealthSouth.

 

1.

HealthSouth has in place the following policies and procedures ("Arrangements
Policies and Procedures") to ensure compliance with the Anti-Kickback Statute,
42 U.S.C. § 1320a-7b(b), and the Physician Self-Referral Law, 42 U.S.C. § 1395nn
(the "Stark Law") with respect to its referral source arrangements: (i) C-06-05
Transactions and Other Arrangements with Referral Sources; (ii) C-04-06
Contracting for Medical Director Services; (iii) 01-C012 Physician Recruitment;
(iv) C-07-03 On-Call Coverage for Hospitals; (v) C-04-13 Leasing Arrangements
with Referral Sources; (vi) C-07-04 Joint Venture Management Fees; (vii) C-04-22
Sponsorship Agreements with Athletic Teams or Other Entities / Events; (viii)
C-04-16 Human Subject Clinical Research Activity; (ix) PSHP-002 Revolver Loans,
Term Loans & Guarantees of Third Party Loans to Jointly-Owned Entities; and (x)
PSHP-005 - Distributions to Equity Owners in Jointly-Owned Entities.

 

2.

HealthSouth provides annual training on the Anti-Kickback Statute, 42 U.S.C. §
1320a-7b(b), and the Physician Self-Referral Law, 42 U.S.C. § 1395nn (the "Stark
Law"), at a minimum, to all Directors of Marketing Operations, Hospital Chief
Executive Officers, Vice-President-level employees and above.

 

3.

Where required by the Arrangements Policies and Procedures. HealthSouth's
Compliance Department and Legal Services Department evaluates and approves
certain proposed transactions with referral sources. The evaluation and approval
includes a legal review of the proposed transaction, performed by legal counsel
knowledgeable with the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and the
Physician Self-Referral Law, 42 U.S.C. § 1395nn (the "Stark Law"), and, where
required by the Arrangements Policies and Procedures, confirmation that
objective data supports the fair market value of the proposed transaction, where
relevant. Documentation of the review and approval process by the Compliance
Department and Legal Services Department, including the objective fair market
value data, if any, is retained in the file maintained by HealthSouth for the
transaction.

 

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APPENDIX F

 

4.

The Compliance Audit Department annually conducts a review of a sample of key
referral source arrangements, including at least thirty (30) property leases and
real estate sale and purchase agreements, at least thirty (30) medical director
contracts, at least ten (10) joint venture partnerships, and at least ten (10)
contracts from all other categories of referral source arrangements (the "Annual
Arrangements Review"). The purpose of this review is to ensure that: (i) each
arrangement was structured and approved in compliance with HealthSouth policies
in effect at the start or renewal of the arrangement, including documentation of
fair market value; (ii) all payments for the most recent twelve (12) month
period have been made or received by HealthSouth in accordance with the terms of
the arrangement; and (iii) any required service logs or other documentation of
performance of required duties has been completed in compliance with the terms
of the arrangement and applicable HealthSouth policies. The Compliance
Department investigates any problems identified as a result of the Annual
Arrangements Review and recommends corrective action as necessary.

 

5.

Where required by the Arrangements Policies and Procedures, each transaction
with a referral source is in writing and signed by all parties. Each written
agreement with a referral source sets forth, at a minimum, the parties, the
responsibilities of each party with specificity, the compensation to be
provided, and the term of the agreement, where required by the Arrangements
Policies and Procedures. The Arrangement Policies and Procedures outline the
required signatures and approval process for each type of referral source
agreement entered into on behalf of HealthSouth.

 

6.

Where required by the Arrangements Policies and Procedures, services provided by
referral sources shall be documented through time cards, service logs, or other
relevant mechanism contemporaneously to their performance; such documentation
shall be maintained by HealthSouth.

 

7.

Where required by the Arrangements Policies and Procedures, prior to processing
a payment invoice for any services provided by a referral source, HealthSouth
shall (i) verify the existence of a written and signed agreement for such
services and (ii) confirm that the requested invoice payment corresponds to the
terms of the written and signed agreement.

 

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APPENDIX F

 

 

8.

HealthSouth shall maintain all records relating to arrangements with referral
sources in a manner that enables HealthSouth to fulfill its compliance
obligations under this Declaration and any other obligations under the law.

 

9.

Nothing in this Declaration affects the responsibilities of HealthSouth under
the Corporate Integrity Agreement (CIA), the First Addendum to the CIA, or any
other law or regulation.

The undersigned signatory represents and warrants that he/she is authorized to
execute this declaration on behalf of HealthSouth.

I declare under penalty of perjury that the foregoing is true and accurate.
Executed on this 14th day of December 2007

 

/s/ Christine Bachrach

Christine Bachrach

Senior Vice-President and Compliance Officer

HealthSouth Corporation

 

 

 

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