UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant To Section 13 OR 15(d) of the Securities Exchange Act of 1934

        Date of Report (date of earliest event reported): March 31, 2003


                             HEALTHSOUTH Corporation
             (Exact Name of Registrant as Specified in its Charter)

                                    Delaware
                 (State or Other Jurisdiction of Incorporation)

             1-10315                                  63-0860407
     (Commission File Number)              (IRS Employer Identification No.)


               One HEALTHSOUTH Parkway, Birmingham, Alabama 35243
          (Address of Principal Executive Offices, Including Zip Code)


                                 (205) 967-7116
              (Registrant's Telephone Number, Including Area Code)


<PAGE>


Item 5.   Other Events and Regulation FD Disclosure

         On March 31, 2003,  HEALTHSOUTH  Corporation issued the following press
release:

                                                           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.

<PAGE>

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


--------------------------------------------------------------------------------


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                       HEALTHSOUTH CORPORATION

                                       By:        /s/ WILLIAM W. HORTON
                                         ---------------------------------------
                                                  William W. Horton
                                                  Executive Vice President
                                                  and Corporate Counsel

         Dated: March 31, 2003
[{"type": "8-K", "sequence": "1", "filename": "form8k.txt", "description": "FORM 8-K", "secsgml_size_bytes": 6955}]
{"company-data": {"conformed-name": "HEALTHSOUTH CORP", "cik": "0000785161", "assigned-sic": "8093", "irs-number": "630860407", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-14940", "film-number": "03627276"}, "business-address": {"street1": "ONE HEALTHSOUTH PKWY", "street2": "STE 224W", "city": "BIRMINGHAM", "state": "AL", "zip": "35243", "phone": "2059677116"}, "mail-address": {"street1": "ONE HEALTHSOUTH PARKWAY", "city": "BIRMINGHAM", "state": "AL", "zip": "35243"}, "former-company": {"former-conformed-name": "HEALTHSOUTH REHABILITATION CORP", "date-changed": "19920703"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant To Section 13 OR 15(d) of the Securities Exchange Act of 1934

        Date of Report (date of earliest event reported): March 31, 2003

                             HEALTHSOUTH Corporation
             (Exact Name of Registrant as Specified in its Charter)

                                    Delaware
                 (State or Other Jurisdiction of Incorporation)

             1-10315                                  63-0860407
     (Commission File Number)              (IRS Employer Identification No.)

               One HEALTHSOUTH Parkway, Birmingham, Alabama 35243
          (Address of Principal Executive Offices, Including Zip Code)

                                 (205) 967-7116
              (Registrant's Telephone Number, Including Area Code)
Item 5.   Other Events and Regulation FD Disclosure

         On March 31, 2003,  HEALTHSOUTH  Corporation issued the following press
release:

                                                           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

--------------------------------------------------------------------------------

                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                       HEALTHSOUTH CORPORATION

                                       By:        /s/ WILLIAM W. HORTON
                                         ---------------------------------------
                                                  William W. Horton
                                                  Executive Vice President
                                                  and Corporate Counsel

         Dated: March 31, 2003