Kindred Healthcare Announces 51 of Its Nursing and Rehabilitation Centers Are Recipients of The AHCA Quality Award

Kindred Healthcare, Inc. (the “Company”) (NYSE:KND) today announced that 51 of its nursing and rehabilitation centers have been named recipients of the 2008 American Health Care Association (“AHCA”) Quality Award for demonstrating a strong commitment to quality improvement.

The AHCA Quality Award is a “step-based” program modeled after criteria from the Malcolm Baldrige National Quality Award. The awards in 2008 consist of an entry level, Step I Award, a more rigorous Step II Award, and a final Step III Award that mirrors the Baldrige National Quality Award criteria. There are approximately 15,800 nursing centers in the United States.

One of the Company’s nursing centers is a recipient of the Step II Award: Chestnut Terrace Nursing and Rehabilitation Center (formerly Kindred Heights Nursing and Rehabilitation Center) located in East Providence, Rhode Island. Chestnut Terrace received a Step I Award in 2006. The Company’s previous Step II Award winners were Kindred Healthcare Center of Orange in Orange, California; Mountain Valley Care and Rehabilitation Center in Kellogg, Idaho; Clark House Nursing Center at Fox Hill Village in Westwood, Massachusetts; and Newton and Wellesley Alzheimer Center in Wellesley, Massachusetts.

In addition, 50 of the Company’s nursing centers are recipients of the Step I Award this year. They are:

Valley Health Care and Rehabilitation Center in Tucson, Arizona,

Alta Vista Healthcare in Riverside, California,

Medical Hill Rehabilitation Center in Oakland, California,

Pacific Coast Care Center in Salinas, California,

Siena Care Center in Auburn, California,

The Tunnell Center for Rehabilitation and Healthcare in San Francisco, California,

Valley Gardens Health Care and Rehabilitation Center in Stockton, California,

Village Square Nursing and Rehabilitation Center in San Marcos, California,

Parkway Pavilion Healthcare in Enfield, Connecticut,

The Crossings – West Campus in New London, Connecticut,

Windsor Rehabilitation and Healthcare Center in Windsor, Connecticut,

Savannah Specialty Care Center in Savannah, Georgia,

Boise Health and Rehabilitation Center in Boise, Idaho,

Caldwell Care Center in Caldwell, Idaho,

Nampa Care Center in Nampa, Idaho,

Eagle Creek Health and Rehabilitation Center in Indianapolis, Indiana,

Regency Place of Dyer in Dyer, Indiana,

Regency Place of Greenfield in Greenfield, Indiana,

Southwood Health and Rehabilitation Center in Terre Haute, Indiana,

Valley View Health Care Center in Elkhart, Indiana,

Bashford East Health Care in Louisville, Kentucky,

Eastside Rehabilitation and Living Center in Bangor, Maine,

Norway Rehabilitation and Living Center in Norway, Maine,

Avery Manor in Needham, Massachusetts,

Braintree Manor Rehabilitation and Nursing Center in Braintree, Massachusetts,

Brigham Manor Nursing and Rehabilitation Center in Newburyport, Massachusetts,

Country Gardens Skilled Nursing and Rehabilitation Center in Swansea, Massachusetts,

Crawford Skilled Nursing and Rehabilitation Center in Fall River, Massachusetts,

Forestview Nursing Home of Wareham in Wareham, Massachusetts,

Franklin Skilled Nursing and Rehabilitation Center in Franklin, Massachusetts,

Hammersmith House Nursing Care Center in Saugus, Massachusetts,

Harborlights Rehabilitation and Nursing Center in South Boston, Massachusetts,

Highgate Manor Center for Health and Rehabilitation in Dedham, Massachusetts,

Hillcrest Nursing and Rehabilitation Center in Fitchburg, Massachusetts,

Oakwood Rehabilitation and Nursing Center in Webster, Massachusetts,

Presentation Nursing and Rehabilitation Center in Brighton, Massachusetts,

River Terrace Healthcare in Lancaster, Massachusetts,

Westborough Health Care Center in Westborough, Massachusetts,

Dover Rehabilitation and Living Center in Dover, New Hampshire,

Guardian Care of Ahoskie in Ahoskie, North Carolina,

Kinston Rehabilitation and Healthcare Center in Kinston, North Carolina,

Pettigrew Rehabilitation and Healthcare Center in Durham, North Carolina,

Rehabilitation and Nursing Center of Monroe in Monroe, North Carolina,

Cambridge Health and Rehabilitation Center in Cambridge, Ohio,

The Greens Nursing and Rehabilitation Center in Lyndhurst, Ohio,

Fairpark Healthcare Center in Maryville, Tennessee,

Madison Healthcare and Rehabilitation Center in Madison, Tennessee,

Starr Farm Nursing Center in Burlington, Vermont,

Nansemond Pointe Rehabilitation and Healthcare Center in Suffolk, Virginia, and

Northwest Continuum Care Center in Longview, Washington.

“To date, 147 of our nursing centers have received the Step I Award,” said Paul J. Diaz, President and Chief Executive Officer of the Company. “That’s 64% of our portfolio and more than any other long-term care company in the country. These awards are a reflection of our commitment to performance improvement and our Quality First Pledge and our goal of having each facility provide consistent results that meet or exceed the expectations of our constituents.”

“I am pleased these centers are being recognized for their efforts on behalf of our patients and residents,” said Lane M. Bowen, Executive Vice President and President of the Company’s Health Services Division. “Throughout our nursing centers, we have a dedication to continuous quality improvement.”

About Kindred Healthcare

Kindred Healthcare, Inc. is a healthcare services company, based in Louisville, Kentucky, with annual revenues of over $4 billion and approximately 54,000 employees in 40 states. At June 30, 2008, Kindred through its subsidiaries provided healthcare services in 656 locations, including 83 long-term acute care hospitals, 228 skilled nursing centers and a contract rehabilitation services business, Peoplefirst rehabilitation services, which served 345 non-affiliated facilities. Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com.