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RehabCare and the Reading Hospital and Medical Center Develop New Long-Term Acute Care Hospital

December 3, 2007

RehabCare Group, Inc. (NYSE: RHB) and The Reading Hospital and Medical Center (The Reading Hospital) announced today a joint venture to develop the first long-term acute care hospital (LTACH) in Berks County, Pennsylvania. The 60-bed LTACH will be housed within a new post-acute facility being constructed in Spring Township, about five miles from The Reading Hospital’s main campus.

A groundbreaking ceremony for the new facility was held on Friday, November 30. (Photo available upon request)

The LTACH venture is a continuation of a nearly 10-year partnership between RehabCare and The Reading Hospital. Since 1998, RehabCare has managed the 44-bed acute rehabilitation unit (ARU) and 50-bed transitional care center at The Reading Hospital. The existing ARU will relocate to the new post-acute hospital, as will the outpatient rehabilitation clinic and diagnostic services necessary to support patient needs. A spring 2009 opening is anticipated.

“For more than 140 years, The Reading Hospital and Medical Center has had a reputation of advancing patient care, and we’re proud to join them in leading the way in bringing this new service to the community,” commented John H. Short, Ph.D., RehabCare President and CEO. “This project not only elevates our relationship with a valued partner, but is a complement to our other post-acute services in the area.”

RehabCare currently manages three nearby skilled nursing facility programs and an inpatient rehabilitation unit in addition to the two programs at The Reading Hospital.

Scott R. Wolfe, President and Chief Executive Officer at The Reading Hospital, said, “The development of an LTACH is further evidence of our commitment to extending our continuum of care for the Berks County community. Working with our trusted partner, RehabCare, we will offer the specialized services required by individuals whose complex health needs demand acute hospital care for greater than 25 days. The new post-acute facility also will enable us to expand the scope of services provided to individuals in need of acute rehabilitation.”

LTACHs provide specialized, around-the-clock care for extended stay patients with chronic or medically complex conditions, such as ventilator dependency, brain injury, cardiopulmonary disease, chronic pain and neuropathy. Patients are typically admitted to an LTACH following treatment in a traditional acute care hospital, and the average length of stay is 30 days.

Celebrating its 25th anniversary, RehabCare (www.rehabcare.com) is a leading national provider of physical rehabilitation services in conjunction with about 1,250 skilled nursing facilities and hospitals in 43 states and the District of Columbia. The Company also owns and/or operates 10 freestanding rehabilitation and long-term acute care hospitals.

The Reading Hospital and Medical Center is a not-for-profit healthcare center providing comprehensive acute care, post-acute rehabilitation, behavioral and occupational health services to Berks County and the surrounding area. Established as The Reading Dispensary in 1867, the hospital has since expanded to an 800-bed, 22-building complex, leading the region in tertiary care and perennially ranking among the top four Pennsylvania hospitals in patient admissions, surgical procedures, emergency care volume and outpatient services.

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties may include but are not limited to, our ability to consummate acquisitions and other partnering relationships at reasonable valuations; our ability to integrate acquisitions and partnering relationships within the expected timeframes and to achieve the revenue, cost savings and earnings levels from such acquisitions and relationships at or above the levels projected; our ability to comply with the terms of our borrowing agreements; changes in governmental reimbursement rates and other regulations or policies affecting reimbursement for the services provided by us to clients and/or patients; the operational, administrative and financial effect of our compliance with other governmental regulations and applicable licensing and certification requirements; our ability to attract new client relationships or to retain and grow existing client relationships through expansion of our service offerings and the development of alternative product offerings; the future financial results of any unconsolidated affiliates; our ability to attract and the additional costs of attracting and retaining administrative, operational and professional employees; shortages of qualified therapists and other healthcare personnel; significant increases in health, workers compensation and professional and general liability costs; litigation risks of our past and future business, including our ability to predict the ultimate costs and liabilities or the disruption of our operations; competitive and regulatory effects on pricing and margins; our ability to effectively respond to fluctuations in our census levels and number of patient visits; the adequacy and effectiveness of our information systems; natural disasters and other unexpected events which could severely damage or interrupt our systems and operations; changes in federal and state income tax laws and regulations, the effectiveness of our tax planning strategies and the sustainability of our tax positions; and general and economic conditions, including efforts by governmental reimbursement programs, insurers, healthcare providers and others to contain healthcare costs.




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