BIRMINGHAM, Ala. (Reuters) - HealthSouth Corp., a provider of physical therapy, outpatient surgery and diagnostic imaging, said Tuesday its net income fell 32 percent, hit by Medicare changes for reimbursement for group physical therapy.

Net income fell to $53.6 million, or 13 cents per share, from $79.1 million, or 20 cents, a year earlier. The Birmingham, Ala., company warned in August that changes in Medicare reimbursement for physical therapy would hurt earnings before interest, taxes, depreciation and amortization by $175 million annually.

Excluding a one-time gain, earnings were $38.3 million, or 10 cents per share.

According to research firm First Call, 13 analysts who follow HealthSouth expected the company to earn between 13 and 23 cents per share with a mean estimate of 21 cents.

Revenue rose 2 percent to $1.09 billion from $1.08 billion a year ago.

The company also said it added two new independent members to its board of directors. In addition, HealthSouth formed a special committee to review its governance policies and recommend changes.

The company announced in September it is beinginvestigated by the Securities and Exchange Commission after it was revealed its chairman sold 94 percent of his company stock back to the company at $10.06 a share just weeks before the August warning hit its stock price.

Shares of HealthSouth (HRC: Research, Estimates) gained 35 cents, or nearly 8 percent, Monday to close at $4.88.  

CNN/Money contributed to this story