HEALTHSOUTH Corporation, and its Subsidiary, ReLife of Tennessee, Inc., Have Applied for FTC Approval.

HEALTHSOUTH Corporation, and its subsidiary, ReLife of Tennessee, Inc., have applied for Federal Trade Commission approval to divest assets in Nashville Rehabilitation Hospital to Edgefield Rehabilitation L.L.C. Edgefield Rehabilitation L.L.C. was formed to acquire ReLife's majority interest in Nashville Rehabilitation Hospital, and its principals are William L. Samples and Buddy Duke, both private investors, and Pacific Capital, L.P. The FTC is seeking public comments on the application for 30 days, until Feb. 1, 1996, before making a decision.

HEALTHSOUTH, based in Birmingham, Alabama, is the nation's leading operator of rehabilitation hospitals and other rehabilitation facilities.

The divestiture is required under an April 1995 consent agreement signed by HEALTHSOUTH to settle FTC charges that its $180 million merger with ReLife would raise prices or reduce services at rehabilitation hospital facilities in Birmingham, Alabama; Charleston, South Carolina; and Nashville, Tennessee. The consent agreement requires that HEALTHSOUTH divest Nashville Rehabilitation Hospital, which was owned by a ReLife-controlled partnership prior to the merger, to an entity that will operate the hospital in competition with HEALTHSOUTH. The order requires that the divestiture be completed within 12 months to an FTC-approved entity and that HEALTHSOUTH operate the hospital independently pending divestiture. The order also required HEALTHSOUTH to terminate management contracts to operate rehabilitation units at Medical Center East in Birmingham (which was managed by HEALTHSOUTH) and Roper Hospital in Charleston (which was operated by ReLife).

The application states that the divestiture to Edgefield will ensure that consumers have the continuing benefit of competition in the provision of comprehensive, acute inpatient medical rehabilitation services in the Nashville metropolitan area and would, therefore, satisfy the goal of the consent order to restore competition.

Comments on the application should be sent to FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580. Copies of the application and other documents associated with this case are available from the FTC's Public Reference Branch, Room 130, same address as above; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC Docket No. C-3570)
(healths)