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:     February 18, 1997



                            HEALTHSOUTH Corporation

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

             (Exact Name of Registrant as Specified in its Charter)



          Delaware                   1-10315                   63-0860407
          --------                   -------                   ----------
       State or Other              (Commission              (I.R.S. Employer
Jurisdiction of Incorporation      File Number)             Identification No.)
       or Organization)


One HealthSouth Parkway  
  Birmingham, Alabama                                            35243
  -------------------                                            -----
 (Address of Principal                                         (Zip Code)
   Executive Offices)


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

<PAGE>
Item 5.        OTHER EVENTS

         On February 18, 1997, HEALTHSOUTH  Corporation,  a Delaware corporation
(the  "Company"),  entered into a Plan and Agreement of Merger with  Horizon/CMS
Healthcare  Corporation,  a Delaware  corporation  ("Horizon/CMS"),  pursuant to
which a wholly-owned  subsidiary of the Company will be merged into Horizon/CMS,
with  Horizon/CMS to be the surviving  corporation.  Under the terms of the Plan
and Agreement of Merger,  Horizon/CMS  stockholders  will be entitled to receive
0.42169 of a share of Company Common Stock for each share of Horizon/CMS  Common
Stock  held by them.  The  estimated  value of the  transaction,  which  will be
accounted  for as a purchase,  is  approximately  $1.6  billion  (including  the
assumption of  approximately  $700 million in debt).  As a result of the merger,
the Company  will acquire 33 inpatient  rehabilitation  hospitals,  58 specialty
hospitals and subacute  units,  282 outpatient  rehabilitation  facilities,  267
long-term care facilities that Horizon/CMS owns,  leases or manages,  a contract
therapy  business holding 1,400 contracts,  an institutional  pharmacy  business
serving 38,500 beds, and other healthcare  services.  The ageement  provides for
the payment to HEALTHSOUTH of a $35 million break-up fee plus actual expenses of
up to $5 million if the  transaction is terminated by Horizon/CMS  under certain
circumstances  and Horizon/CMS is thereafter the subject of another  acquisition
transaction. The consummation of the transaction is subject to the expiration or
termination of the waiting period required under the Hart-Scott-Rodino Antitrust
Improvements  Act, and to certain other  regulatory  approvals.  Subject to such
approvals,  the  transaction  currently is expected to close in mid-1997,  or as
soon as practicable after the receipt of such approvals.




Item 7.        FINANCIAL STATEMENTS AND EXHIBITS

          (c)  Exhibits

               21.  Form of press release issued by  HEALTHSOUTH  Corporation in
                    connection with the above-described transaction.


<PAGE>
                                   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.

Date:    February 19, 1997



                                        HEALTHSOUTH Corporation   



                                        By:
                                            ------------------------------------
                                                  William W. Horton
                                                Senior Vice President
                                                and Corporate Counsel
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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:     February 18, 1997

                            HEALTHSOUTH Corporation

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

             (Exact Name of Registrant as Specified in its Charter)

          Delaware                   1-10315                   63-0860407
          --------                   -------                   ----------
       State or Other              (Commission              (I.R.S. Employer
Jurisdiction of Incorporation      File Number)             Identification No.)
       or Organization)

One HealthSouth Parkway  
  Birmingham, Alabama                                            35243
  -------------------                                            -----
 (Address of Principal                                         (Zip Code)
   Executive Offices)

Registrant's Telephone Number,
   Including Area Code:                                     (205) 967-7116
Item 5.        OTHER EVENTS

         On February 18, 1997, HEALTHSOUTH  Corporation,  a Delaware corporation
(the  "Company"),  entered into a Plan and Agreement of Merger with  Horizon/CMS
Healthcare  Corporation,  a Delaware  corporation  ("Horizon/CMS"),  pursuant to
which a wholly-owned  subsidiary of the Company will be merged into Horizon/CMS,
with  Horizon/CMS to be the surviving  corporation.  Under the terms of the Plan
and Agreement of Merger,  Horizon/CMS  stockholders  will be entitled to receive
0.42169 of a share of Company Common Stock for each share of Horizon/CMS  Common
Stock  held by them.  The  estimated  value of the  transaction,  which  will be
accounted  for as a purchase,  is  approximately  $1.6  billion  (including  the
assumption of  approximately  $700 million in debt).  As a result of the merger,
the Company  will acquire 33 inpatient  rehabilitation  hospitals,  58 specialty
hospitals and subacute  units,  282 outpatient  rehabilitation  facilities,  267
long-term care facilities that Horizon/CMS owns,  leases or manages,  a contract
therapy  business holding 1,400 contracts,  an institutional  pharmacy  business
serving 38,500 beds, and other healthcare  services.  The ageement  provides for
the payment to HEALTHSOUTH of a $35 million break-up fee plus actual expenses of
up to $5 million if the  transaction is terminated by Horizon/CMS  under certain
circumstances  and Horizon/CMS is thereafter the subject of another  acquisition
transaction. The consummation of the transaction is subject to the expiration or
termination of the waiting period required under the Hart-Scott-Rodino Antitrust
Improvements  Act, and to certain other  regulatory  approvals.  Subject to such
approvals,  the  transaction  currently is expected to close in mid-1997,  or as
soon as practicable after the receipt of such approvals.

Item 7.        FINANCIAL STATEMENTS AND EXHIBITS

          (c)  Exhibits

               21.  Form of press release issued by  HEALTHSOUTH  Corporation in
                    connection with the above-described transaction.
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.

Date:    February 19, 1997

                                        HEALTHSOUTH Corporation   

                                        By:
                                            ------------------------------------
                                                  William W. Horton
                                                Senior Vice President
                                                and Corporate Counsel