|   | Delaware                      |   | 51-0265872                                |
|--------|-------------------------------|--------|-------------------------------------------|
|   | (State      of Incorporation) |   | (I.R.S.      Employer Identification No.) |

| Securities      registered pursuant to Section 12(b) of the Act: |   | Name      of exchange on which registered: |
|------------------------------------------------------------------|--------|--------------------------------------------|
| Common      Stock, par value $.01 per share                      |   | New      York Stock Exchange               |
| Preferred      Stock Purchase Rights                             |   | New      York Stock Exchange               |

----

| PART      I   |                                                                                                                        |
|---------------|-----------------------------------------------------------------------------------------------------------------------------|
| Item      1.  | Business                                                                                                                    |
| Item      1A. | Risk      Factors                                                                                                           |
| Item      1B. | Unresolved      Staff Comments                                                                                              |
| Item      2.  | Properties                                                                                                                  |
| Item      3.  | Legal      Proceedings                                                                                                      |
| Item      4.  | Submission      of Matters to a Vote of Security Holders                                                                    |
|          |                                                                                                                        |
| PART      II  |                                                                                                                        |
| Item      5.  | Market      for Registrant’s Common Stock, Related Stockholder Matters and Issuer      Purchases of Equity Securities |
| Item      6.  | Selected      Financial Data                                                                                                |
| Item      7.  | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                       |
| Item      7A. | Quantitative      and Qualitative Disclosures About Market Risk                                                             |
| Item      8.  | Financial      Statements and Supplementary Data                                                                            |
| Item      9.  | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure                              |
| Item      9A. | Controls      and Procedures                                                                                                |
| Item      9B. | Other      Information                                                                                                      |
|          |                                                                                                                        |
| PART      III |                                                                                                                        |
| Item      10. | Directors,      Executive Officers and Corporate Governance                                                                 |
| Item      11. | Executive      Compensation                                                                                                 |
| Item      12. | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters                    |
| Item      13. | Certain      Relationships and Related Transactions, and Director      Independence                                         |
| Item      14. | Principal      Accounting Fees and Services                                                                                 |
|          |                                                                                                                        |
| PART      IV  |                                                                                                                        |
| Item      15. | Exhibits      and Financial Statement Schedules                                                                             |

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| Business Segments                                                                                                   | Description of Service                                                                                                                                                                                                                      | Benefits to Client                                                                                                                                                                                                                                                             |
|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                |                                                                                                                                                                                                                                        |
| Program ManagementServices:                                                                                         |                                                                                                                                                                                                                                        |
| Hospital      Rehabilitation Services:                                                                              |                                                                                                                                                                                                                                        |
| InpatientInpatient      Rehabilitation Facilities:  Skilled      Nursing Units (Subacute Rehabilitation): |  High      acuity rehabilitation for conditions such as stroke, orthopedic conditions      and head injuries. Lower      acuity rehabilitation for conditions such as stroke, cancer, heart      failure, burns and wounds.  |  Affords      the client opportunities to retain and expand market share in the      post-acute market by offering specialized clinical rehabilitation services      to patients who might otherwise be discharged to a setting outside the      client’s facility. |
| Outpatient                                                                                                          | Outpatient      therapy programs for hospital-based and satellite programs (primarily      sports and work-related injuries).                                                                                                               | Helps      bring patients into the client’s facility by providing specialized      clinical programs and helps the client compete with freestanding      clinics.                                                                                                        |
|                                                                                                                |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                           |
| Skilled      Nursing Rehabilitation Services:                                                                       |                                                                                                                                                                                                                                        |
| Contract      Therapy                                                                                               | Rehabilitation      services in freestanding      skilled nursing, long-term      care and assisted living      facilities for neurological, orthopedic and other medical      conditions.                                             | Affords      the client the ability to fulfill the continuing need for therapists on a      full-time or part-time basis. Offers the client a better opportunity to      improve the quality of their programs.                                                           |
| Other                                                                                                               | Resident-centered      consulting services and therapist and nurse staffing services for      healthcare providers.                                                                                                                         | Provides      management advisory services and solutions to healthcare      providers.                                                                                                                                                                                         |
| Hospitals:                                                                                                          |                                                                                                                                                                                                                                        |
| Long-Term      Acute Care Hospitals (LTACHs)                                                              | Provide      high-level therapeutic and clinical care to patients with medically      complex diagnoses requiring an average length of stay of 25 days or      more.                                                                   |                                                                                                                                                                                                                                                                           |
|  Rehabilitation      Hospitals                                                                  | Provide      intense interdisciplinary rehabilitation services to patients on an      inpatient and outpatient basis.                                                                                                                       |                                                                                                                                                                                                                                                                           |
|                                                                                                                |

----

|                      |   | Program      Management Services |   |       |
|---------------------------|--------|----------------------------------|--------|------------|
|                      |   | Inpatient                        |   |       |   |   |   |   |
|                      |   | Rehabilitation/                  |   | Outpatient |   | Contract |   |   |
|                      |   | Skilled      Nursing             |   | Therapy    |   | Therapy |   |   |
| Geographic Region         |   | Units                            |   | Programs   |   | Programs |   | Hospitals |
| Mountain      Region      |   | 1/1                              |   | 1          |   | 66 |   | 1 |
| North      Central Region |   | 35/1                             |   | 10         |   | 327 |   | 7 |
| Northeast      Region     |   | 16/1                             |   | 5          |   | 121 |   | 2 |
| South      Central Region |   | 32/0                             |   | 6          |   | 403 |   | 22 |
| Southeast      Region     |   | 14/2                             |   | 7          |   | 148 |   | 2 |
| Western      Region       |   | 8/4                              |   | 1          |   | 53 |   | 0 |
| Total                     |   | 106/9                            |   | 30         |   | 1,118 |   | 34 |

|   | · | Improve Clinical      Quality. Program managers focused on rehabilitation are able to      develop and employ best practices, which benefit client facilities and      their patients. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase Volumes.      Through the addition of specialty services such as IRFs within      acute-care hospitals, patients who were being discharged to other venues      for treatment can now remain in the hospital setting. This allows      hospitals to capture revenues that would otherwise be realized by another      provider. Upon discharge, patients can return for outpatient care,      creating added revenues for the provider. New services also help hospitals      attract new patients. The addition of a managed rehabilitation program      helps skilled nursing facilities attract residents by broadening their      scope of services. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Optimize Utilization of Space.      Inpatient services help hospitals optimize physical plant space to      treat patients who have specific diagnoses within the particular      hospital’s targeted service lines. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase Cost Control.      Because of their extensive experience in the service line, contract      management companies can offer pricing structures that effectively control      a healthcare provider’s financial risk related to the service provided.      For hospitals and other providers that utilize program managers, the      result is often lower average cost than that of self-managed programs. As      a result, the facility is able to increase its revenues without having to      increase administrative staff or incur other fixed  costs. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Establish Agreements with      Managed Care Organizations. Program managers often have the ability      to improve clinical care by capturing and analyzing patient information      from a large number of inpatient rehabilitation and skilled nursing units,      which an individual hospital could not do on its own without a substantial      investment in specialized systems. Becoming part of a managed care network      helps the hospital attract physicians, and in turn, attract more patients      to the hospital. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide Access to      Capital.  Contract management companies, particularly      those which have access to public markets, can in certain circumstances      make capital available to their clients for adding programs and services      like physical rehabilitative services or expanding existing programs when      community needs dictate. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain Reimbursement Advice.      Contract management companies, like RehabCare, employ reimbursement      specialists who are available to assist client facilities in interpreting      complicated regulations within a given specialty — a highly valued service      in the changing healthcareenvironment. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain Clinical Resources and      Expertise. Rehabilitation service providers have the ability to      develop and implement clinical training and development programs that can      provide best practices for clients. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ensure Appropriate Levels of      Staffing for Rehabilitation Professionals. Therapy staffing in both      hospitals and skilled nursing settings presents unique challenges that can      be better managed by a provider with a national recruiting presence.      Program managers have the ability to more sharply focus on staffing levels      in order to address the fluctuating clinical needs of the host      facility. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  ITEM 1A.  |  RISK  FACTORS |
|----------------------|---------------------|

----

----

| ·   | facility      and professional licensure; |
|--------------------|-------------------------------------------|

| ·   | conduct      of operations; |
|--------------------|-----------------------------|

| ·   | certain      clinical procedures; |
|--------------------|-----------------------------------|

| ·   | addition      of facilities and services, including certificates of  need; |
|--------------------|----------------------------------------------------------------------------|

| ·   | coding      and billing for services; and |
|--------------------|-------------------------------------------|

| ·   | payment      for services. |
|--------------------|----------------------------|

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| ·   | difficulties      integrating acquired personnel and distinct cultures into our      business; |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | disagreements      with our joint ownership partners; |
|--------------------|-------------------------------------------------------|

| ·   | incomplete      due diligence or misunderstanding as to the target company’s future      prospects; |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | diversion      of management attention and capital resources from existing      operations; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | short-term      (or longer lasting) dilution in the value of our  shares; |
|--------------------|---------------------------------------------------------------------------|

| ·   | over-paying      for an acquired company or joint ownership entity due to incorrect      analysis or because of competition from other companies for the same      target; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | inability      to achieve forecasted revenues, cost savings or other      synergies; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | potential      loss of key employees, customers or relationships;  and |
|--------------------|------------------------------------------------------------------------|

| ·   | assumption      of liabilities and exposure to unforeseen liabilities of acquired or joint      ownership companies, including liabilities for failure to comply with      healthcare regulations. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | result      in our inability to comply with the financial and other restrictive      covenants in our credit facilities; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | increase      our vulnerability to adverse industry and general economic      conditions; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | require      us to dedicate a substantial portion of our cash flow from operations to      make payments on our debt, thereby reducing the availability of our cash      flow for working capital, capital investments and other business      activities; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit      our ability to obtain additional financing to fund future working capital,      capital investments and other business  activities; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit      our ability to refinance our indebtedness on terms that are commercially      reasonable, or at all; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | expose      us to the risk of interest rate fluctuations to the extent we pay interest      at variable rates on the debt; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | limit      our flexibility to plan for, and react to, changes in our business and our      industry; and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | place      us at a competitive disadvantage relative to our less leveraged      competitors. |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | incur      or guarantee additional debt or issue certain preferred    stock; |
|--------------------|------------------------------------------------------------------------------|

| ·   | pay      dividends or make distributions on our capital stock or certain      subordinated debt or redeem, repurchase or retire our capital stock or      certain subordinated debt; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | make      certain investments; |
|--------------------|--------------------------------|

| ·   | create      liens on our or our subsidiaries’assets; |
|--------------------|------------------------------------------------------------|

| ·   | make      distributions from our jointventures; |
|--------------------|-------------------------------------------------|

| ·   | enter      into transactions with affiliates; |
|--------------------|-----------------------------------------------|

| ·   | merge      or consolidate with another person or sell or otherwise dispose of all or      substantially all of our assets; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | enter      into sales leaseback transactions; |
|--------------------|-----------------------------------------------|

| ·   | sell      assets, including capital stock of our  subsidiaries; |
|--------------------|-----------------------------------------------------------------|

| ·   | alter      the business that we conduct; and |
|--------------------|----------------------------------------------|

| ·   | change      our fiscal year. |
|--------------------|------------------------------|

----

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|  ITEM 1B. |  UNRESOLVED STAFF      COMMENTS |
|----------------|--------------------------------------|

----

|  ITEM 2.  |  PROPERTIES |
|---------------------|------------------|

|  ITEM 3.  |  LEGAL    PROCEEDINGS |
|---------------------|----------------------------|

|  ITEM 4.  |  SUBMISSION OF MATTERS TO A VOTE      OF SECURITY HOLDERS |
|---------------------|----------------------------------------------------------------|

----

|   | ITEM      5. | MARKET      FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER      PURCHASES OF EQUITY SECURITIES |
|--------|--------------|---------------------------------------------------------------------------------------------------------------------------------|

|                       | 1/1/2005 |   | 12/31/2005 |   | 12/31/2006 |   | 12/31/2007 |   | 12/31/2008 |   | 12/31/2009 |
|----------------------------|----------|--------|------------|--------|------------|--------|------------|--------|------------|--------|------------|
| RehabCare      Group       | $100.00  |   | $72.17     |   | $53.05     |   | $80.60     |   | $54.16     |   | $108.72    |
| Health      Care Providers | $100.00  |   | $134.55    |   | $132.44    |   | $157.86    |   | $85.76     |   | $116.49    |
| NYSE      Market Index     | $100.00  |   | $109.36    |   | $131.75    |   | $143.43    |   | $87.12     |   | $111.76    |

----

| Calendar      Quarter | 1st   | 2nd   | 3rd   | 4th   |
|-----------------------|-----------------|-----------------|-----------------|-----------------|
| 2009                  | High            | $18.75          | $23.93          | $25.65          | $31.29 |
|                  | Low             | 12.45           | 16.04           | 20.63           | 18.75 |
| 2008                  | High            | $26.07          | $17.41          | $20.23          | $18.09 |
|                  | Low             | 14.00           | 13.75           | 14.99           | 10.45 |

|  ITEM 6. |  SELECTED FINANCIAL      DATA |
|---------------|------------------------------------|

----

| SIX-YEAR      FINANCIAL SUMMARY                  |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
|--------------------------------------------------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|----------|--------|--------|--------|---------|--------|
| Dollars      in thousands, except per share data |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| (Year      ended December 31,)                   |   | 2009      |   |   |   | 2008    |   |   |   | 2007    |   |   |   | 2006    |   |   |   | 2005     |   |   |   | 2004    |   |
| Consolidated      statement of earnings data:    |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Operating      revenues                          | $      | 869,427   |   |   | $      | 735,412 |   |   | $      | 693,013 |   |   | $      | 601,807 |   |   | $      | 443,731  |   |   | $      | 378,797 |   |
| Operating      earnings                          |   | 44,474    |   |   |   | 32,907  |   |   |   | 27,530  |   |   |   | 21,551  |   |   |   | 32,610   |   |   |   | 41,311  |   |
| Amounts      attributable to RehabCare: (2)      |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Earnings (loss) from continuing      operations  | $      | 23,794    |   |   | $      | 19,568  |   |   | $      | 13,041  |   |   | $      | 7,594   |   |   | $      | (17,373) |   |   | $      | 22,893  |   |
| Basic EPS from continuing      operations        | $      | 1.29      |   |   | $      | 1.11    |   |   | $      | 0.76    |   |   | $      | 0.45    |   |   | $      | (1.04)   |   |   | $      | 1.41    |   |
| Diluted EPS from continuing      operations      | $      | 1.26      |   |   | $      | 1.10    |   |   | $      | 0.75    |   |   | $      | 0.44    |   |   | $      | (1.04)   |   |   | $      | 1.36    |   |
| Weighted      average shares outstanding (000s): |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Basic                                            |   | 18,481    |   |   |   | 17,583  |   |   |   | 17,226  |   |   |   | 17,008  |   |   |   | 16,751   |   |   |   | 16,292  |   |
| Diluted                                          |   | 18,862    |   |   |   | 17,798  |   |   |   | 17,459  |   |   |   | 17,243  |   |   |   | 16,751   |   |   |   | 16,835  |   |
|                                             |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Consolidated      balance sheet data:            |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Working      capital                             | $      | 113,296   |   |   | $      | 97,284  |   |   | $      | 80,285  |   |   | $      | 85,982  |   |   | $      | 60,664   |   |   | $      | 76,451  |   |
| Total      assets                                |   | 1,109,980 |   |   |   | 438,406 |   |   |   | 408,560 |   |   |   | 428,296 |   |   |   | 272,925  |   |   |   | 277,666 |   |
| Total      liabilities                           |   | 650,360   |   |   |   | 160,606 |   |   |   | 163,271 |   |   |   | 217,431 |   |   |   | 74,677   |   |   |   | 70,638  |   |
| Total      equity                                |   | 459,620   |   |   |   | 277,800 |   |   |   | 245,289 |   |   |   | 210,865 |   |   |   | 198,248  |   |   |   | 207,028 |   |
|                                             |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Financial      statistics:                       |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Operating      margin                            |   | 5.1%      |   |   |   | 4.5%    |   |   |   | 4.0%    |   |   |   | 3.6%    |   |   |   | 7.3%     |   |   |   | 10.9%   |   |
| Net      margin (2)                              |   | 2.7%      |   |   |   | 2.7%    |   |   |   | 1.9%    |   |   |   | 1.3%    |   |   |   | (3.9)%   |   |   |   | 6.0%    |   |
| Current      ratio                               |   | 1.7:1     |   |   |   | 2.1:1   |   |   |   | 1.9:1   |   |   |   | 1.9:1   |   |   |   | 1.9:1    |   |   |   | 2.3:1   |   |
| Diluted      EPS growth rate (2)                 |   | 14.5%     |   |   |   | 46.7%   |   |   |   | 70.5%   |   |   |   | 142.3%  |   |   |   | (176.5)% |   |   |   | 258.1%  |   |
| Return      on equity (1)      (2)               |   | 6.5%      |   |   |   | 7.5%    |   |   |   | 5.7%    |   |   |   | 3.7%    |   |   |   | (8.6)%   |   |   |   | 11.9%   |   |
|                                             |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Operating      statistics:                       |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Hospitals:                                       |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Number of hospitals at end of      year (3)      |   | 34        |   |   |   | 11      |   |   |   | 8       |   |   |   | 7       |   |   |   | 5        |   |   |   | N/A     |   |
| Number of patient discharges      (3)            |   | 8,369     |   |   |   | 6,019   |   |   |   | 5,070   |   |   |   | 3,595   |   |   |   | 1,110    |   |   |   | N/A     |   |
| Program      management:                         |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Inpatient      units:                            |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Average number of      programs                  |   | 121       |   |   |   | 122     |   |   |   | 127     |   |   |   | 137     |   |   |   | 145      |   |   |   | 142     |   |
| Average admissions per      program              |   | 393       |   |   |   | 377     |   |   |   | 363     |   |   |   | 360     |   |   |   | 372      |   |   |   | 383     |   |
| Outpatient      programs:                        |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Average number of      locations                 |   | 35        |   |   |   | 33      |   |   |   | 35      |   |   |   | 41      |   |   |   | 42       |   |   |   | 42      |   |
| Patient visits      (000s)                       |   | 1,264     |   |   |   | 983     |   |   |   | 1,006   |   |   |   | 1,130   |   |   |   | 1,146    |   |   |   | 1,133   |   |
| Contract      therapy:                           |   |      |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |     |   |   |   |    |   |
| Average number of locations      (4)             |   | 1,088     |   |   |   | 1,066   |   |   |   | 1,125   |   |   |   | 1,018   |   |   |   | 749      |   |   |   | 588     |   |

| (1) | Based      on average of beginning and endingequity. |
|-----|------------------------------------------------------|

| (2) | The      results for 2005 include after tax losses on our equity investment in      InteliStaf Holdings, Inc. of $36.5 million or $2.18 per diluted      share. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | We      entered the freestanding hospitals business on August 1, 2005 with the      acquisition of substantially all of the operating assets of MeadowBrook      Healthcare, Inc.  Effective November 24, 2009, we acquired      Triumph HealthCare Holdings, Inc., which added 20 long-term acute care      hospitals to our portfolio ofhospitals. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Effective      July 1, 2006, we acquired Symphony Health Services, LLC and its RehabWorks      business, which added 470 contract therapy  locations. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ITEM      7. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|--------|--------------|-------------------------------------------------------------------------------------------------------|

|                                         | Year      Ended December 31, |
|----------------------------------------------|-----------------------------------|
|                                         |                              | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                         | (in      thousands)               |
| Revenues:                                    |                              |   |   |   |   |   |   |   |   |
| Program      management:                     |                              |   |   |   |   |   |   |   |   |
| Skilled      nursing rehabilitation services | $                                 | 496,250 |   | $ | 457,229 |   | $ | 432,910 |   |
| Hospital      rehabilitation services        |                              | 178,168 |   |   | 165,658 |   |   | 164,102 |   |
| Program      management total                |                              | 674,418 |   |   | 622,887 |   |   | 597,012 |   |
| Hospitals                                    |                              | 195,009 |   |   | 112,525 |   |   | 96,001 |   |
| Total                                        | $                                 | 869,427 |   | $ | 735,412 |   | $ | 693,013 |   |
|                                         |                              |   |   |   |   |   |   |   |   |
| Operating      Earnings (Loss):              |                              |   |   |   |   |   |   |   |   |
| Program      management:                     |                              |   |   |   |   |   |   |   |   |
| Skilled      nursing rehabilitation services | $                                 | 37,753 |   | $ | 25,544 |   | $ | 7,249 |   |
| Hospital      rehabilitation services        |                              | 29,487 |   |   | 21,997 |   |   | 22,893 |   |
| Program management      total                |                              | 67,240 |   |   | 47,541 |   |   | 30,142 |   |
| Hospitals      (1)                           |                              | (22,512 | ) |   | (13,903 | ) |   | (1,972 | ) |
| Unallocated      corporate expenses (2)      |                              | (254 | ) |   | (731 | ) |   | (640 | ) |
| Total                                        | $                                 | 44,474 |   | $ | 32,907 |   | $ | 27,530 |   |

|   | (1) | The      2009 operating earnings of hospitals include $7.2 million of      acquisition-related expenses for costs directly related to the acquisition      of Triumph including fees for legal, accounting, advisory and other      outside services.  The 2007 operating earnings of hospitals      include a $4.9 million impairment loss on a separately identifiable      intangible asset.  See Note 7 to the consolidated financial      statements for additionalinformation. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Represents      general corporate overhead costs associated with Phase 2 Consulting, Inc.,      which was sold on June 1, 2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

----

|                           | Year      Ended December 31, |
|--------------------------------|-----------------------------------|
|                           | 2009                              |   | 2008 |   | 2007 |
| Medicare                       |                              | 68.8 | % |   | 74.2 | % |   | 77.8 | % |
| Medicaid                       |                              | 2.0 |   |   | 0.8 |   |   | 0.6 |   |
| Other      third party payors  |                              | 27.4 |   |   | 22.5 |   |   | 19.1 |   |
| Self-pay                       |                              | 0.1 |   |   | 0.4 |   |   | 0.5 |   |
| Total      net patient revenue |                              | 98.3 |   |   | 97.9 |   |   | 98.0 |   |
| Other      revenue             |                              | 1.7 |   |   | 2.1 |   |   | 2.0 |   |
|                           |                              | 100.0 | % |   | 100.0 | % |   | 100.0 | % |

----

|                                                         | Year      Ended December 31, |
|--------------------------------------------------------------|-----------------------------------|
|                                                         | 2009                              |   | 2008 |   | 2007 |
| Operating      revenues                                      |                              | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| Cost      and expenses:                                      |                              |   |   |   |   |   |   |   |   |
| Operating                                                    |                              | 81.0 |   |   | 81.3 |   |   | 81.0 |   |
| Selling,      general and administrative                     |                              | 12.0 |   |   | 12.2 |   |   | 11.9 |   |
| Impairment      of assets                                    |                              | — |   |   | — |   |   | 0.7 |   |
| Depreciation      and amortization                           |                              | 1.9 |   |   | 2.0 |   |   | 2.4 |   |
| Operating      earnings                                      |                              | 5.1 |   |   | 4.5 |   |   | 4.0 |   |
| Interest      income                                         |                              | — |   |   | — |   |   | 0.1 |   |
| Interest      expense                                        |                              | (0.6 | ) |   | (0.5 | ) |   | (1.2 | ) |
| Equity      in net income of affiliate                       |                              | — |   |   | — |   |   | — |   |
| Earnings      from continuing operations before income taxes |                              | 4.5 |   |   | 4.0 |   |   | 2.9 |   |
| Income      taxes                                            |                              | 2.0 |   |   | 1.6 |   |   | 1.1 |   |
| Earnings      from continuing operations, net of tax         |                              | 2.5 |   |   | 2.4 |   |   | 1.8 |   |
| Loss      from discontinued operations, net of tax           |                              | (0.1 | ) |   | (0.1 | ) |   | — |   |
| Net      earnings                                            |                              | 2.4 |   |   | 2.3 |   |   | 1.8 |   |
| Net      loss attributable to noncontrolling interests       |                              | 0.2 |   |   | 0.2 |   |   | — |   |
| Net      earnings attributable to RehabCare                  |                              | 2.6 | % |   | 2.5 | % |   | 1.8 | % |

| Revenues                                     |   |                        |   |   |          |   |   |   |   |
|----------------------------------------------|--------|-----------------------------|--------|--------|---------------|--------|--------|--------|--------|
|                                         | 2009   |                        | 2008   |   | %      Change |
|                                         |   | (dollars      in thousands) |   |
|                                         |   |                        |   |   |          |   |   |   |   |
| Skilled      nursing rehabilitation services | $      | 496,250                     |   | $      | 457,229       |   | 8.5    | %      |   |
| Hospital      rehabilitation services        |   | 178,168                     |   |   | 165,658       |   | 7.6    |   |   |
| Hospitals                                    |   | 195,009                     |   |   | 112,525       |   | 73.3   |   |   |
| Consolidated      revenues                   | $      | 869,427                     |   | $      | 735,412       |   | 18.2   | %      |   |

----

| Cost      and Expenses                   |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
|------------------------------------------|-----------------------------|---------|--------|---------|-----------|--------|--------|--------|---------|---------|--------|--------|-----------|--------|
|                                     |                        |    |   |    | %      of |   |   |   |    |    |   |   | %      of |   |
|                                     |                        | 2009    |   | Revenue |      |   | 2008   |   |    | Revenue |
|                                     | (dollars      in thousands) |
| Consolidated      costs and expenses:    |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                  | $                           | 704,394 |   |    | 81.0      | %      |   | $      | 597,879 |    |   |   | 81.3      | %      |
| Selling,      general and administrative |                        | 104,060 |   |    | 12.0      |   |   |   | 90,056  |    |   |   | 12.2      |   |
| Depreciation      and amortization       |                        | 16,499  |   |    | 1.9       |   |   |   | 14,570  |    |   |   | 2.0       |   |
| Total      costs and expenses            | $                           | 824,953 |   |    | 94.9      | %      |   | $      | 702,505 |    |   |   | 95.5      | %      |

----

|                                          |                        |    |   |    | %      of |   |   |   |    |    |   |   | %      of |   |
|-----------------------------------------------|-----------------------------|---------|--------|---------|-----------|--------|--------|--------|---------|---------|--------|--------|-----------|--------|
|                                          |                        |    |   | Unit    |      |   |   |   |    | Unit    |
|                                          |                        | 2009    |   | Revenue |      |   | 2008   |   |    | Revenue |
|                                          | (dollars      in thousands) |
| Skilled      Nursing Rehabilitation Services: |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 402,461 |   |    | 81.1      | %      |   | $      | 373,939 |    |   |   | 81.8      | %      |
| Selling,      general and administrative      |                        | 49,753  |   |    | 10.0      |   |   |   | 50,911  |    |   |   | 11.1      |   |
| Depreciation      and amortization            |                        | 6,283   |   |    | 1.3       |   |   |   | 6,835   |    |   |   | 1.5       |   |
| Total      costs and expenses                 | $                           | 458,497 |   |    | 92.4      | %      |   | $      | 431,685 |    |   |   | 94.4      | %      |
| Hospital      Rehabilitation Services:        |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 124,758 |   |    | 70.0      | %      |   | $      | 118,291 |    |   |   | 71.4      | %      |
| Selling,      general and administrative      |                        | 21,500  |   |    | 12.1      |   |   |   | 22,729  |    |   |   | 13.7      |   |
| Depreciation      and amortization            |                        | 2,423   |   |    | 1.3       |   |   |   | 2,641   |    |   |   | 1.6       |   |
| Total      costs and expenses                 | $                           | 148,681 |   |    | 83.4      | %      |   | $      | 143,661 |    |   |   | 86.7      | %      |
| Hospitals:                                    |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 177,175 |   |    | 90.8      | %      |   | $      | 105,649 |    |   |   | 93.9      | %      |
| Selling,      general and administrative      |                        | 32,553  |   |    | 16.7      |   |   |   | 15,685  |    |   |   | 13.9      |   |
| Depreciation      and amortization            |                        | 7,793   |   |    | 4.0       |   |   |   | 5,094   |    |   |   | 4.6       |   |
| Total      costs and expenses                 | $                           | 217,521 |   |    | 111.5     | %      |   | $      | 126,428 |    |   |   | 112.4     | %      |
|                                          |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |

----

----

| Revenues                                     |   |                        |   |   |          |   |   |   |   |
|----------------------------------------------|--------|-----------------------------|--------|--------|---------------|--------|--------|--------|--------|
|                                         | 2008   |                        | 2007   |   | %      Change |
|                                         |   | (dollars      in thousands) |   |
|                                         |   |                        |   |   |          |   |   |   |   |
| Skilled      nursing rehabilitation services | $      | 457,229                     |   | $      | 432,910       |   | 5.6    | %      |   |
| Hospital      rehabilitation services        |   | 165,658                     |   |   | 164,102       |   | 0.9    |   |   |
| Hospitals                                    |   | 112,525                     |   |   | 96,001        |   | 17.2   |   |   |
| Consolidated      revenues                   | $      | 735,412                     |   | $      | 693,013       |   | 6.1    | %      |   |

----

| Cost      and Expenses                   |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
|------------------------------------------|-----------------------------|---------|--------|---------|-----------|--------|--------|--------|---------|---------|--------|--------|-----------|--------|
|                                     |                        |    |   |    | %      of |   |   |   |    |    |   |   | %      of |   |
|                                     |                        | 2008    |   | Revenue |      |   | 2007   |   |    | Revenue |
|                                     | (dollars      in thousands) |
| Consolidated      costs and expenses:    |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                  | $                           | 597,879 |   |    | 81.3      | %      |   | $      | 561,233 |    |   |   | 81.0      | %      |
| Selling,      general and administrative |                        | 90,056  |   |    | 12.2      |   |   |   | 82,806  |    |   |   | 11.9      |   |
| Impairment      of assets                |                        | — |   |    | —   |   |   |   | 4,906   |    |   |   | 0.7       |   |
| Depreciation      and amortization       |                        | 14,570  |   |    | 2.0       |   |   |   | 16,538  |    |   |   | 2.4       |   |
| Total      costs and expenses            | $                           | 702,505 |   |    | 95.5      | %      |   | $      | 665,483 |    |   |   | 96.0      | %      |

----

|                                          |                        |    |   |    | %      of |   |   |   |    |    |   |   | %      of |   |
|-----------------------------------------------|-----------------------------|---------|--------|---------|-----------|--------|--------|--------|---------|---------|--------|--------|-----------|--------|
|                                          |                        |    |   | Unit    |      |   |   |   |    | Unit    |
|                                          |                        | 2008    |   | Revenue |      |   | 2007   |   |    | Revenue |
|                                          | (dollars      in thousands) |
| Skilled      Nursing Rehabilitation Services: |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 373,939 |   |    | 81.8      | %      |   | $      | 363,909 |    |   |   | 84.1      | %      |
| Selling,      general and administrative      |                        | 50,911  |   |    | 11.1      |   |   |   | 52,975  |    |   |   | 12.2      |   |
| Depreciation      and amortization            |                        | 6,835   |   |    | 1.5       |   |   |   | 8,777   |    |   |   | 2.0       |   |
| Total      costs and expenses                 | $                           | 431,685 |   |    | 94.4      | %      |   | $      | 425,661 |    |   |   | 98.3      | %      |
| Hospital      Rehabilitation Services:        |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 118,291 |   |    | 71.4      | %      |   | $      | 115,706 |    |   |   | 70.5      | %      |
| Selling,      general and administrative      |                        | 22,729  |   |    | 13.7      |   |   |   | 21,399  |    |   |   | 13.0      |   |
| Depreciation      and amortization            |                        | 2,641   |   |    | 1.6       |   |   |   | 4,104   |    |   |   | 2.5       |   |
| Total      costs and expenses                 | $                           | 143,661 |   |    | 86.7      | %      |   | $      | 141,209 |    |   |   | 86.0      | %      |
| Hospitals:                                    |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |
| Operating      expenses                       | $                           | 105,649 |   |    | 93.9      | %      |   | $      | 81,618  |    |   |   | 85.0      | %      |
| Selling,      general and administrative      |                        | 15,685  |   |    | 13.9      |   |   |   | 7,792   |    |   |   | 8.1       |   |
| Impairment      of intangible assets          |                        | — |   |    | —   |   |   |   | 4,906   |    |   |   | 5.1       |   |
| Depreciation      and amortization            |                        | 5,094   |   |    | 4.6       |   |   |   | 3,657   |    |   |   | 3.9       |   |
| Total      costs and expenses                 | $                           | 126,428 |   |    | 112.4     | %      |   | $      | 97,973  |    |   |   | 102.1     | %      |
|                                          |                        |    |   |    |      |   |   |   |    |    |   |   |      |   |

----

----

----

|                                                        |   |   |      |        | Less      than |    | 2-3    |   | 4-5     |         | More      than |    |   |   |
|-------------------------------------------------------------|--------|--------|-----------|-------------|----------------|---------|--------|--------|---------|--------------|----------------|---------|--------|--------|
|                                                        |   | Total  |      | 1      year |           | years   |   | years  |    | 5      years |           | Other   |
| Operating      leases (1)                                   |   | $      | 426,603   |        | $              | 31,611  |   | $      | 65,823  |         | $              | 66,458  |   | $      | 262,711 |   | $ | — |
| Purchase      obligations (2)                               |   |   | 14,583    |        |           | 13,730  |   |   | 853     |         |           | — |   |   | — |   |   | — |
| Long-term      debt including capital lease obligations (3) |   |   | 464,159   |        |           | 7,507   |   |   | 19,499  |         |           | 9,653   |   |   | 427,500 |   |   | — |
| Interest      on long-term debt (4)                         |   |   | 159,222   |        |           | 27,954  |   |   | 53,802  |         |           | 51,918  |   |   | 25,548 |   |   | — |
| Unrecognized      tax benefits (5)                          |   |   | 1,647     |        |           | — |   |   | — |         |           | — |   |   | — |   |   | 1,647 |
| Other      long-term liabilities (6)                        |   |   | 3,352     |        |           | — |   |   | — |         |           | — |   |   | — |   |   | 3,352 |
| Total                                                       |   | $      | 1,069,566 |        | $              | 80,802  |   | $      | 139,977 |         | $              | 128,029 |   | $      | 715,759 |   | $ | 4,999 |

| (1) | We      lease many of our facilities under non-cancelable operating leases in the      normal course of business.  Some lease agreements provide us      with the option to renew the lease. Our future operating lease obligations      would change if we exercised these renewal options and if we entered into      additional operating lease agreements. For more information, see Note 13      to our accompanying consolidated financial  statements. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Purchase      obligations include agreements to purchase goods or services that are      enforceable and legally binding on us and that specify all significant      terms. Purchase obligations exclude agreements that are cancelable without      penalty. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The      amount of long-term debt reported on our consolidated balance sheet at      December 31, 2009 includes unamortized original issue discounts of      approximately $8,892,000. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Interest      on our variable rate debt is estimated using the rate in effect as of      December 31, 2009.  This line also includes interest related to      capital lease obligations, but excludes the amortization of original issue      discounts and the amortization of deferred loan  fees. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Represents      our total liability for unrecognized tax benefits based on the guidance in      the Financial Accounting Standards Board’s Accounting Standards      Codification Topic 740, “Income Taxes.”  There is a high degree      of uncertainty regarding the timing of future cash outflows associated      with these liabilities, which involve various taxing      authorities.  As a result, we are unable to predict the timing      of payments against thisobligation. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6) | We      maintain a nonqualified deferred compensation plan for certain employees.      Under the plan, participants may defer up to 70% of their salary and cash      incentive compensation. The amounts are held in trust in investments      designated by participants but remain our property until distribution.      Because most distributions of funds are tied to the termination of      employment or retirement of participants, we are not able to predict the      timing of payments against this obligation.  At December 31,      2009, we owned trust assets with a value approximately equal to the total      amount of this obligation. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|  ITEM      7A.   |  QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET RISK |
|---------------------------------|-----------------------------------------------------------------------|

----

|   | ITEM      8. | FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA |
|--------|--------------|--------------------------------------------------|

|                                                               |   |
|--------------------------------------------------------------------|--------|
| Report      of Independent Registered Public Accounting Firm       | 46     |
|                                                               |   |
| Consolidated      Balance Sheets as of December 31, 2009 and 2008  | 48     |
|                                                               |   |
| Consolidated      Statements of Earnings for the years             |   |
| ended December 31, 2009, 2008 and      2007                        | 49     |
|                                                               |   |
| Consolidated      Statements of Comprehensive Income for the years |   |
| ended December 31, 2009, 2008 and      2007                        | 50     |
|                                                               |   |
| Consolidated      Statements of Changes in Equity for the years    |   |
| ended December 31, 2009, 2008      and 2007                        | 51     |
|                                                               |   |
| Consolidated      Statements of Cash Flows for the years           |   |
| ended December 31, 2009, 2008 and      2007                        | 52     |
|                                                               |   |
| Notes      to the Consolidated Financial Statements                | 53     |

----

----

----

|                                                                                                                                                                     |   | December      31, |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
| Assets                                                                                                                                                                   |   | 2009              |      | 2008 |   |
| Current      assets:                                                                                                                                                     |   |              |      |   |   |   |   |
| Cash      and cash equivalents                                                                                                                                           |   | $                 | 24,690    |   | $ | 27,373 |   |
| Accounts      receivable, net of allowance for doubtful accounts of $24,729 and $19,480,      respectively                                                               |   |              | 199,447   |   |   | 139,197 |   |
| Deferred      tax assets                                                                                                                                                 |   |              | 21,249    |   |   | 14,876 |   |
| Other      current assets                                                                                                                                                |   |              | 19,530    |   |   | 7,165 |   |
| Total      current assets                                                                                                                                                |   |              | 264,916   |   |   | 188,611 |   |
| Marketable      securities, trading                                                                                                                                      |   |              | 3,314     |   |   | 2,810 |   |
| Property      and equipment, net                                                                                                                                         |   |              | 111,814   |   |   | 37,851 |   |
| Goodwill                                                                                                                                                                 |   |              | 566,078   |   |   | 171,365 |   |
| Intangible      assets, net                                                                                                                                              |   |              | 135,406   |   |   | 28,944 |   |
| Investment      in unconsolidated affiliate                                                                                                                              |   |              | 4,761     |   |   | 4,772 |   |
| Other                                                                                                                                                                    |   |              | 23,691    |   |   | 4,053 |   |
| Total      assets                                                                                                                                                        |   | $                 | 1,109,980 |   | $ | 438,406 |   |
|                                                                                                                                                                     |   |              |      |   |   |   |   |
| Liabilities and Equity                                                                                                                                                   |   |              |      |   |   |   |   |
| Current      liabilities:                                                                                                                                                |   |              |      |   |   |   |   |
| Current      portion of long-term debt                                                                                                                                   |   | $                 | 7,507     |   | $ | — |   |
| Accounts      payable                                                                                                                                                    |   |              | 18,293    |   |   | 8,330 |   |
| Accrued      salaries and wages                                                                                                                                          |   |              | 80,138    |   |   | 55,188 |   |
| Income      taxes payable                                                                                                                                                |   |              | 97        |   |   | 776 |   |
| Accrued      expenses                                                                                                                                                    |   |              | 45,585    |   |   | 27,033 |   |
| Total      current liabilities                                                                                                                                           |   |              | 151,620   |   |   | 91,327 |   |
| Long-term      debt, less current portion                                                                                                                                |   |              | 447,760   |   |   | 57,000 |   |
| Deferred      compensation                                                                                                                                               |   |              | 3,352     |   |   | 2,833 |   |
| Deferred      tax liabilities                                                                                                                                            |   |              | 45,605    |   |   | 8,306 |   |
| Other                                                                                                                                                                    |   |              | 2,023     |   |   | 1,140 |   |
| Total      liabilities                                                                                                                                                   |   |              | 650,360   |   |   | 160,606 |   |
|                                                                                                                                                                     |   |              |      |   |   |   |   |
| Stockholders’      equity:                                                                                                                                         |   |              |      |   |   |   |   |
| Preferred      stock, $.10 par value; authorized 10,000,000 shares, none issued and      outstanding                                                                     |   |              | —   |   |   | — |   |
| Common      stock, $.01 par value; authorized 60,000,000 shares, issued 28,036,014      shares and 21,657,544 shares as of December 31, 2009 and 2008,      respectively |   |              | 280       |   |   | 217 |   |
| Additional      paid-in capital                                                                                                                                          |   |              | 291,771   |   |   | 145,647 |   |
| Retained      earnings                                                                                                                                                   |   |              | 199,991   |   |   | 177,036 |   |
| Accumulated      other comprehensive loss                                                                                                                                |   |              | —   |   |   | (424 | ) |
| Less      common stock held in treasury at cost; 4,002,898 shares as of December 31,      2009 and 2008                                                                  |   |              | (54,704   | ) |   | (54,704 | ) |
| Total      stockholders’ equity                                                                                                                                    |   |              | 437,338   |   |   | 267,772 |   |
| Noncontrolling      interests                                                                                                                                            |   |              | 22,282    |   |   | 10,028 |   |
| Total      equity                                                                                                                                                        |   |              | 459,620   |   |   | 277,800 |   |
| Total      liabilities and equity                                                                                                                                        |   | $                 | 1,109,980 |   | $ | 438,406 |   |

----

|                                                         |   |   | Year      Ended December 31, |   |
|--------------------------------------------------------------|--------|--------|------------------------------|--------|
|                                                         |   |   | 2009                         |   |   |   | 2008 |   |   |   | 2007 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                      |   | $      | 869,427                      |   |   | $ | 735,412 |   |   | $ | 693,013 |   |
| Costs      and expenses:                                     |   |   |                         |   |   |   |   |   |   |   |   |   |
| Operating                                                    |   |   | 704,394                      |   |   |   | 597,879 |   |   |   | 561,233 |   |
| Selling,      general and administrative                     |   |   | 104,060                      |   |   |   | 90,056 |   |   |   | 82,806 |   |
| Impairment      of assets                                    |   |   | —                      |   |   |   | — |   |   |   | 4,906 |   |
| Depreciation      and amortization                           |   |   | 16,499                       |   |   |   | 14,570 |   |   |   | 16,538 |   |
| Total      costs and expenses                                |   |   | 824,953                      |   |   |   | 702,505 |   |   |   | 665,483 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Operating      earnings                                      |   |   | 44,474                       |   |   |   | 32,907 |   |   |   | 27,530 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Interest      income                                         |   |   | 98                           |   |   |   | 143 |   |   |   | 830 |   |
| Interest      expense                                        |   |   | (5,546                       | )      |   |   | (3,897 | ) |   |   | (8,362 | ) |
| Other      income                                            |   |   | 12                           |   |   |   | 21 |   |   |   | 37 |   |
| Equity      in net income of affiliate                       |   |   | 431                          |   |   |   | 471 |   |   |   | 287 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations before income taxes |   |   | 39,469                       |   |   |   | 29,645 |   |   |   | 20,322 |   |
| Income      taxes                                            |   |   | 17,641                       |   |   |   | 12,063 |   |   |   | 7,658 |   |
| Earnings      from continuing operations, net of tax         |   |   | 21,828                       |   |   |   | 17,582 |   |   |   | 12,664 |   |
| Loss      from discontinued operations, net of tax           |   |   | (839                         | )      |   |   | (863 | ) |   |   | (382 | ) |
| Net      earnings                                            |   |   | 20,989                       |   |   |   | 16,719 |   |   |   | 12,282 |   |
| Net      loss attributable to noncontrolling interests       |   |   | 1,966                        |   |   |   | 1,986 |   |   |   | 377 |   |
| Net      earnings attributable to RehabCare                  |   | $      | 22,955                       |   |   | $ | 18,705 |   |   | $ | 12,659 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Amounts      attributable to RehabCare stockholders:         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax         |   | $      | 23,794                       |   |   | $ | 19,568 |   |   | $ | 13,041 |   |
| Loss      from discontinued operations, net of tax           |   |   | (839                         | )      |   |   | (863 | ) |   |   | (382 | ) |
| Net      earnings                                            |   | $      | 22,955                       |   |   | $ | 18,705 |   |   | $ | 12,659 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share attributable to RehabCare:     |   |   |                         |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax         |   | $      | 1.29                         |   |   | $ | 1.11 |   |   | $ | 0.76 |   |
| Loss      from discontinued operations, net of tax           |   |   | (0.05                        | )      |   |   | (0.05 | ) |   |   | (0.03 | ) |
| Net      earnings                                            |   | $      | 1.24                         |   |   | $ | 1.06 |   |   | $ | 0.73 |   |
|                                                         |   |   |                         |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share attributable to RehabCare:   |   |   |                         |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax         |   | $      | 1.26                         |   |   | $ | 1.10 |   |   | $ | 0.75 |   |
| Loss      from discontinued operations, net of tax           |   |   | (0.04                        | )      |   |   | (0.05 | ) |   |   | (0.02 | ) |
| Net      earnings                                            |   | $      | 1.22                         |   |   | $ | 1.05 |   |   | $ | 0.73 |   |

----

|                                                                                                                                                                |   |   | Year      Ended December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------|--------|
|                                                                                                                                                                |   |   | 2009                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Net      earnings                                                                                                                                                   |   | $      | 20,989                       |   | $ | 16,719 |   | $ | 12,282 |   |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Other      comprehensive income (loss), net of tax:                                                                                                                 |   |   |                         |   |   |   |   |   |   |   |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Changes      in the fair value of derivative designated as a cash flow hedge, net of      income tax expense (benefit) of $267, $(226) and $(41),      respectively |   |   | 424                          |   |   | (358 | ) |   | (66 | ) |
| Total      other comprehensive loss, net of tax                                                                                                                     |   |   | 424                          |   |   | (358 | ) |   | (66 | ) |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Comprehensive      income                                                                                                                                           |   |   | 21,413                       |   |   | 16,361 |   |   | 12,216 |   |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Comprehensive      loss attributable to noncontrolling interests                                                                                                    |   |   | 1,966                        |   |   | 1,986 |   |   | 377 |   |
|                                                                                                                                                                |   |   |                         |   |   |   |   |   |   |   |
| Comprehensive      income attributable to RehabCare                                                                                                                 |   | $      | 23,379                       |   | $ | 18,347 |   | $ | 12,593 |   |

----

|                                                     | Amounts      Attributable to RehabCare Stockholders |    |       |   |     |   |
|----------------------------------------------------------|-----------------------------------------------------|---------|------------|--------|----------|--------|
|                                                     |                                                |    |       |   |     |   |   |   | Accumulated |   |   |   |   |   |
|                                                     |                                                |    | Additional |   |     |   |   |   | other |   | Non- |   |   |   |
|                                                     | Common                                              |    | paid-in    |   | Retained |   | Treasury |   | comprehensive |   | controlling |   | Total |   |
|                                                     | stock                                               |    | capital    |   | earnings |   | stock |   | earnings      (loss) |   | interests |   | equity |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2006                          | $                                                   | 211     |       | $      | 134,040  |   | $ | 131,232 |   | $ | (54,704 | ) | $ | — |   | $ | 86 |   | $ | 210,865 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings (loss)                                 |                                                | — |       |   | —  |   |   | 12,659 |   |   | — |   |   | — |   |   | (377 | ) |   | 12,282 |   |
| Changes      in the fair value of derivative, net of tax |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | (66 | ) |   | — |   |   | (66 | ) |
| Adjustment      to initially apply FIN 48                |                                                | — |       |   | —  |   |   | 14,440 |   |   | — |   |   | — |   |   | — |   |   | 14,440 |   |
| Stock-based      compensation                            |                                                | — |       |   | 1,726    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 1,726 |   |
| Activity      under stock plans                          |                                                | 4       |       |   | 4,480    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 4,484 |   |
| Contributions      made by noncontrolling interests      |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | — |   |   | 1,558 |   |   | 1,558 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007                          |                                                | 215     |       |   | 140,246  |   |   | 158,331 |   |   | (54,704 | ) |   | (66 | ) |   | 1,267 |   |   | 245,289 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings (loss)                                 |                                                | — |       |   | —  |   |   | 18,705 |   |   | — |   |   | — |   |   | (1,986 | ) |   | 16,719 |   |
| Changes      in the fair value of derivative, net of tax |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | (358 | ) |   | — |   |   | (358 | ) |
| Stock-based      compensation                            |                                                | — |       |   | 3,195    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 3,195 |   |
| Activity      under stock plans                          |                                                | 2       |       |   | 2,206    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 2,208 |   |
| Contributions      made by noncontrolling interests      |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | — |   |   | 10,747 |   |   | 10,747 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2008                          |                                                | 217     |       |   | 145,647  |   |   | 177,036 |   |   | (54,704 | ) |   | (424 | ) |   | 10,028 |   |   | 277,800 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings (loss)                                 |                                                | — |       |   | —  |   |   | 22,955 |   |   | — |   |   | — |   |   | (1,966 | ) |   | 20,989 |   |
| Changes      in the fair value of derivative, net of tax |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | 424 |   |   | — |   |   | 424 |   |
| Sale      of common stock                                |                                                | 62      |       |   | 140,187  |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 140,249 |   |
| Stock-based      compensation                            |                                                | — |       |   | 4,662    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 4,662 |   |
| Activity      under stock plans                          |                                                | 1       |       |   | 1,275    |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 1,276 |   |
| Business      combinations                               |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | — |   |   | 11,591 |   |   | 11,591 |   |
| Contributions      made by noncontrolling interests      |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | — |   |   | 4,423 |   |   | 4,423 |   |
| Distributions      to noncontrolling interests           |                                                | — |       |   | —  |   |   | — |   |   | — |   |   | — |   |   | (1,794 | ) |   | (1,794 | ) |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2009                          | $                                                   | 280     |       | $      | 291,771  |   | $ | 199,991 |   | $ | (54,704 | ) | $ | — |   | $ | 22,282 |   | $ | 459,620 |   |
|                                                     |                                                |    |       |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                              |   |   | Year      Ended December 31, |   |   |
|-------------------------------------------------------------------|--------|--------|------------------------------|--------|--------|
|                                                              |   |   | 2009                         |   |   |   | 2008 |   |   |   | 2007 |   |   |
| Cash      flows from operating activities:                        |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                 |   | $      | 20,989                       |   |   | $ | 16,719 |   |   | $ | 12,282 |   |   |
| Reconciliation      to net cash provided by operating activities: |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                |   |   | 16,522                       |   |   |   | 14,886 |   |   |   | 17,021 |   |   |
| Provision      for doubtful accounts                              |   |   | 7,794                        |   |   |   | 10,178 |   |   |   | 9,194 |   |   |
| Equity      in net income of affiliate                            |   |   | (431                         | )      |   |   | (471 | ) |   |   | (287 | ) |   |
| Impairment      of assets                                         |   |   | —                      |   |   |   | — |   |   |   | 4,906 |   |   |
| Stock-based      compensation                                     |   |   | 4,662                        |   |   |   | 3,195 |   |   |   | 1,726 |   |   |
| Income      tax benefit related to stock options exercised        |   |   | 916                          |   |   |   | 812 |   |   |   | 1,122 |   |   |
| Excess      tax benefit related to stock options exercised        |   |   | (405                         | )      |   |   | (564 | ) |   |   | (973 | ) |   |
| Loss      (gain) on disposal of discontinued operation            |   |   | 1,188                        |   |   |   | (321 | ) |   |   | — |   |   |
| Gain      on disposal of property and equipment                   |   |   | (12                          | )      |   |   | (21 | ) |   |   | (37 | ) |   |
| Changes      in assets and liabilities:                           |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable, net                                     |   |   | (5,837                       | )      |   |   | (11,318 | ) |   |   | 7,883 |   |   |
| Other      current assets                                         |   |   | (6,821                       | )      |   |   | 846 |   |   |   | 925 |   |   |
| Accounts      payable                                             |   |   | (3,478                       | )      |   |   | 2,328 |   |   |   | (3,895 | ) |   |
| Accrued      salaries and wages                                   |   |   | 5,715                        |   |   |   | 4,952 |   |   |   | (523 | ) |   |
| Income      taxes payable and deferred taxes                      |   |   | 477                          |   |   |   | 4,456 |   |   |   | 5,871 |   |   |
| Accrued      expenses                                             |   |   | 6,212                        |   |   |   | 2,629 |   |   |   | (2,486 | ) |   |
| Other      assets and other liabilities                           |   |   | 599                          |   |   |   | 352 |   |   |   | (720 | ) |   |
| Net      cash provided by operating activities                    |   |   | 48,090                       |   |   |   | 48,658 |   |   |   | 52,009 |   |   |
| Cash      flows from investing activities:                        |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Additions      to property and equipment                          |   |   | (13,215                      | )      |   |   | (18,502 | ) |   |   | (9,989 | ) |   |
| Purchase      of marketable securities                            |   |   | (476                         | )      |   |   | (509 | ) |   |   | (354 | ) |   |
| Proceeds      from sale/maturities of marketable securities       |   |   | 607                          |   |   |   | 546 |   |   |   | 1,390 |   |   |
| Investment      in unconsolidated affiliate                       |   |   | —                      |   |   |   | — |   |   |   | (1,119 | ) |   |
| Proceeds      from disposition of business                        |   |   | 5,043                        |   |   |   | 7,193 |   |   |   | — |   |   |
| Purchase      of businesses, net of cash acquired                 |   |   | (549,783                     | )      |   |   | (8,408 | ) |   |   | (1 | ) |   |
| Other,      net                                                   |   |   | (27                          | )      |   |   | (406 | ) |   |   | (871 | ) |   |
| Net      cash used in investing activities                        |   |   | (557,851                     | )      |   |   | (20,086 | ) |   |   | (10,944 | ) |   |
| Cash      flows from financing activities:                        |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Net      change in revolving credit facility                      |   |   | (57,000                      | )      |   |   | (11,500 | ) |   |   | (45,000 | ) |   |
| Proceeds      from the issuance of long-term debt                 |   |   | 450,000                      |   |   |   | — |   |   |   | — |   |   |
| Debt      issuance costs                                          |   |   | (28,448                      | )      |   |   | — |   |   |   | — |   |   |
| Principal      payments on long-term debt                         |   |   | (1,749                       | )      |   |   | (6,000 | ) |   |   | (1,059 | ) |   |
| Net      proceeds from the sale of common stock                   |   |   | 140,249                      |   |   |   | — |   |   |   | — |   |   |
| Cash      contributed by noncontrolling interests                 |   |   | 4,423                        |   |   |   | 3,663 |   |   |   | 1,373 |   |   |
| Cash      distributed to noncontrolling interests                 |   |   | (1,794                       | )      |   |   | — |   |   |   | — |   |   |
| Activity      under stock plans                                   |   |   | 992                          |   |   |   | 1,809 |   |   |   | 3,483 |   |   |
| Excess      tax benefit related to stock options exercised        |   |   | 405                          |   |   |   | 564 |   |   |   | 973 |   |   |
| Net      cash provided by (used in) financing activities          |   |   | 507,078                      |   |   |   | (11,464 | ) |   |   | (40,230 | ) |   |
| Net      (decrease) increase in cash and cash equivalents         |   |   | (2,683                       | )      |   |   | 17,108 |   |   |   | 835 |   |   |
| Cash      and cash equivalents at beginning of year               |   |   | 27,373                       |   |   |   | 10,265 |   |   |   | 9,430 |   |   |
| Cash      and cash equivalents at end of year                     |   | $      | 24,690                       |   |   | $ | 27,373 |   |   | $ | 10,265 |   |   |

----

|  (1)   |  Overview of Company and Summary      of Significant Accounting Policies |
|-----------------------|-------------------------------------------------------------------------------|

----

|                                       | As      of December 31, |
|--------------------------------------------|-------------------------|
| Hospital segment                           | 2009                    |   | 2008 |
| Medicare                                   |                    | 58.7 | % |   | 64.7 | % |
| Medicaid                                   |                    | 2.8 |   |   | 2.3 |   |
| Other      third party payors              |                    | 36.8 |   |   | 32.1 |   |
| Self-pay                                   |                    | 1.6 |   |   | 0.9 |   |
| Total      net patient accounts receivable |                    | 99.9 |   |   | 100.0 |   |
| Other      receivables                     |                    | 0.1 |   |   | — |   |
| Total      net accounts receivable         |                    | 100.0 | % |   | 100.0 | % |

----

----

----

----

|  (2)  |  Stock-Based      Compensation |
|-----------------|-------------------------------------|

|                                  |   | Year      Ended December 31, |   |
|---------------------------------------|--------|------------------------------|--------|
|                                  |   | 2009                         |   |   | 2008 |   |   | 2007 |   |
|                                  |   |                         |   |   |   |   |   |   |   |
| Share-based      compensation expense | $      | 4,662                        |   | $ | 3,195 |   | $ | 1,726 |   |
| Income      tax benefit               |   | 1,802                        |   |   | 1,235 |   |   | 667 |   |

----

|                                  |    |   |   | Weighted- |   | Weighted-Average |   | Aggregate  |
|---------------------------------------|---------|--------|--------|-----------|--------|------------------|--------|------------|
|                                  |    |   |   | Average   |   | Remaining        |   | Intrinsic  |
|                                  |    |   |   | Exercise  |   | Contractual      |   | Value      |
| Stock Options                         | Shares  |   |   | Price     |   | Life      (yrs)  |   | (millions) |
|                                  |    |   |   |      |   |             |   |       |
| Outstanding      at January 1, 2009   | 974,739 |   |   | $24.10    |   |             |   |       |
| Granted                               | — |   |   | —   |   |             |   |       |
| Exercised                             | (93,910 | )      |   | 14.11     |   |             |   |       |
| Forfeited      or expired             | (10,000 | )      |   | 30.08     |   |             |   |       |
| Outstanding      at December 31, 2009 | 870,829 |   |   | $25.11    |   | 3.5              |   | $5.7       |
| Exercisable      at December 31, 2009 | 863,329 |   |   | $25.16    |   | 3.5              |   | $5.6       |

|                                |    |   |   | Weighted-       |   |
|-------------------------------------|---------|--------|--------|-----------------|--------|
|                                |    |   |   | Average         |   |
|                                |    |   |   | Grant-Date      |   |
| Nonvested Stock Options             | Shares  |   |   | Fair      Value |   |
|                                |    |   |   |            |   |
| Nonvested      at January 1, 2009   | 15,000  |   |   | $7.78           |   |
| Granted                             | — |   |   | —         |   |
| Vested                              | (7,500  | )      |   | 7.78            |   |
| Forfeited                           | — |   |   | —         |   |
| Nonvested      at December 31, 2009 | 7,500   |   |   | $7.78           |   |

----

|                                   |    |   |   | Weighted-       |   |
|----------------------------------------|---------|--------|--------|-----------------|--------|
|                                   |    |   |   | Average         |   |
|                                   |    |   |   | Grant-Date      |   |
| Nonvested Restricted Stock      Awards | Shares  |   |   | Fair      Value |   |
|                                   |    |   |   |            |   |
| Nonvested      at January 1, 2009      | 398,742 |   |   | $18.90          |   |
| Granted                                | 382,016 |   |   | 14.80           |   |
| Vested                                 | (92,595 | )      |   | 17.91           |   |
| Forfeited                              | (58,430 | )      |   | 16.18           |   |
| Nonvested      at December 31, 2009    | 629,733 |   |   | $16.81          |   |
|                                   |    |   |   |            |   |

|  (3)  |  Marketable      Securities |
|-----------------|----------------------------------|

|  (4)  |  Allowance for Doubtful      Accounts |
|-----------------|--------------------------------------------|

|                                         |   | Year      Ended December 31, |   |
|----------------------------------------------|--------|------------------------------|--------|
|                                         |   | 2009                         |   |   | 2008 |   |   |   | 2007 |   |
|                                         |   |                         |   |   |   |   |   |   |   |   |
| Balance      at beginning of year            | $      | 19,480                       |   | $ | 16,266 |   |   | $ | 14,355 |   |
| Provisions      for doubtful accounts        |   | 7,794                        |   |   | 9,643 |   |   |   | 9,194 |   |
| Acquisitions                                 |   | 8,201                        |   |   | 17 |   |   |   | 1,472 |   |
| Disposition                                  |   | (41                          | )      |   | — |   |   |   | — |   |
| Accounts      written off, net of recoveries |   | (10,705                      | )      |   | (6,446 | ) |   |   | (8,755 | ) |
| Balance      at end of year                  | $      | 24,729                       |   | $ | 19,480 |   |   | $ | 16,266 |   |
|                                         |   |                         |   |   |   |   |   |   |   |   |

----

|   (5)  |  Property and      Equipment |
|-----------------------|-----------------------------------|

|                                                         |   | December      31, |    |
|--------------------------------------------------------------|--------|-------------------|---------|
|                                                         |   |              | 2009    |   |   | 2008 |   |
|                                                         |   |              |    |   |   |   |   |
| Equipment                                                    |   | $                 | 88,808  |   | $ | 58,163 |   |
| Land                                                         |   |              | 6,043   |   |   | 1,010 |   |
| Buildings      and leasehold improvements                    |   |              | 60,328  |   |   | 27,599 |   |
| Buildings      and equipment under capital lease obligations |   |              | 11,243  |   |   | — |   |
|                                                         |   |              | 166,422 |   |   | 86,772 |   |
| Less      accumulated depreciation                           |   |              | 54,608  |   |   | 48,921 |   |
|                                                         |   | $                 | 111,814 |   | $ | 37,851 |   |

|  (6)  |  Business      Combinations |
|-----------------|----------------------------------|

----

| Cash                                                                                                         |   | $      | — |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Accounts      receivable                                                                                     |   |   | 60,636  |   |
| Other      current assets                                                                                    |   |   | 13,357  |   |
| Property      and equipment                                                                                  |   |   | 67,777  |   |
| Identifiable      intangible assets, principally Medicare licenses, trade name and      certificates of need |   |   | 108,960 |   |
| Other      assets                                                                                            |   |   | 1,747   |   |
| Current      portion of long-term debt                                                                       |   |   | (2,536  | )      |
| Accounts      payable and other current liabilities                                                          |   |   | (45,649 | )      |
| Noncurrent      portion of long-term debt                                                                    |   |   | (10,217 | )      |
| Other      liabilities                                                                                       |   |   | (36,455 | )      |
| Total      identifiable net assets                                                                           |   |   | 157,620 |   |
| Noncontrolling      interests in Triumph                                                                     |   |   | (10,000 | )      |
| Goodwill                                                                                                     |   |   | 390,920 |   |
| Fair      value of total consideration transferred                                                           |   | $      | 538,540 |   |

----

|                                                                                      |   | Year      ended        |    | Year      ended        |   |
|-------------------------------------------------------------------------------------------|--------|------------------------|---------|------------------------|--------|
|                                                                                      |   | December      31, 2009 |    | December      31, 2008 |   |
|                                                                                      |   | As      Reported       |    | Pro      Forma         |   | As      Reported |   | Pro      Forma |   |
|                                                                                      |   |                   |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                                                   |   | $                      | 869,427 |                   |   | $ | 1,260,775 |   |   | $ | 735,412 |   |   | $ | 1,159,138 |   |   |
| Net      earnings from continuing operations attributable to    RehabCare                 |   | $                      | 23,794  |                   |   | $ | 45,724 |   |   | $ | 19,568 |   |   | $ | 35,144 |   |   |
| Diluted      earnings per share from continuing operations attributable to      RehabCare |   | $                      | 1.26    |                   |   | $ | 1.88 |   |   | $ | 1.10 |   |   | $ | 1.46 |   |   |
|                                                                                      |   |                   |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|  (7)  |  Goodwill and Other Intangible      Assets |
|-----------------|-------------------------------------------------|

----

----

|                                      |   | December 31, 2009 |   | December 31, 2008 |   |
|-------------------------------------------|--------|-------------------|--------|-------------------|--------|
|                                      |   | Gross             |   |              |   | Gross |   |   |   |
|                                      |   | Carrying          |   | Accumulated       |   | Carrying |   | Accumulated |   |
|                                      |   | Amount            |   | Amortization      |   | Amount |   | Amortization |   |
| Amortizing      Intangible Assets:        |   |              |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncompete      agreements                |   | $                 | 4,710  |              |   | $ | (1,566 | ) |   | $ | 1,850 |   |   | $ | (1,261 | ) |   |
| Customer      contracts and relationships |   |              | 23,096 |              |   |   | (12,577 | ) |   |   | 23,096 |   |   |   | (10,042 | ) |   |
| Trade      names                          |   |              | 40,083 |              |   |   | (2,792 | ) |   |   | 9,683 |   |   |   | (1,929 | ) |   |
| Medicare      exemption                   |   |              | 454    |              |   |   | (340 | ) |   |   | 454 |   |   |   | (227 | ) |   |
| Market      access assets                 |   |              | 5,720  |              |   |   | (310 | ) |   |   | 5,720 |   |   |   | (24 | ) |   |
| Certificates      of need                 |   |              | 9,442  |              |   |   | (152 | ) |   |   | 142 |   |   |   | (28 | ) |   |
| Lease      arrangements                   |   |              | 1,305  |              |   |   | (297 | ) |   |   | 905 |   |   |   | (205 | ) |   |
| Total                                     |   | $                 | 84,810 |              |   | $ | (18,034 | ) |   | $ | 41,850 |   |   | $ | (13,716 | ) |   |
|                                      |   |              |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-amortizing      Intangible Assets:    |   |              |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade      names                          |   | $                 | 410    |              |   |   |   |   |   | $ | 810 |   |   |   |   |   |   |
| Medicare      provider numbers            |   |              | 68,220 |              |   |   |   |   |   |   | — |   |   |   |   |   |   |
|                                      |   | $                 | 68,630 |              |   |   |   |   |   | $ | 810 |   |   |   |   |   |   |

----

|                              |         |    |   |         |   |      |   | Healthcare      Management |   |    |   |
|-----------------------------------|--------------|---------|--------|--------------|--------|-----------|--------|----------------------------|--------|---------|--------|
|                              | SRS      (a) |    |   | HRS      (b) |   | Hospitals |   | Consulting      (c)        |   | Total   |   |
| Balance      at December 31, 2007 | $            | 79,419  |   |         | $      | 39,715    |   |                       | $      | 45,239  |   |   | $ | 4,144 |   |   | $ | 168,517 |   |
| Acquisitions                      |         | — |   |         |   | —   |   |                       |   | 6,414   |   |   |   | — |   |   |   | 6,414 |   |
| Dispositions                      |         | — |   |         |   | —   |   |                       |   | (3,566  | )      |   |   | — |   |   |   | (3,566 | ) |
| Balance      at December 31, 2008 |         | 79,419  |   |         |   | 39,715    |   |                       |   | 48,087  |   |   |   | 4,144 |   |   |   | 171,365 |   |
| Acquisitions                      |         | — |   |         |   | —   |   |                       |   | 398,857 |   |   |   | — |   |   |   | 398,857 |   |
| Dispositions                      |         | — |   |         |   | —   |   |                       |   | — |   |   |   | (4,144 | ) |   |   | (4,144 | ) |
| Balance      at December 31, 2009 | $            | 79,419  |   |         | $      | 39,715    |   |                       | $      | 446,944 |   |   | $ | — |   |   | $ | 566,078 |   |

|   | (a) | Skilled      Nursing Rehabilitation Services(SRS). |
|--------|-----|----------------------------------------------------|

|   | (b) | Hospital      Rehabilitation Services (HRS). |
|--------|-----|----------------------------------------------|

|   | (c) | The      healthcare management consulting segment consists of Phase 2 Consulting,      Inc., which was sold effective June 1,2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------|

|  (8)  |  Dispositions and Discontinued      Operations |
|-----------------|-----------------------------------------------------|

| Assets:                                    |   |   |   |   |
|--------------------------------------------|--------|--------|--------|--------|
| Accounts      receivable                   |   | $      | 2,202  |   |
| Other      current assets                  |   |   | 23     |   |
| Property      and equipment, net           |   |   | 115    |   |
| Goodwill                                   |   |   | 4,144  |   |
| Intangible      assets                     |   |   | 400    |   |
| Other      assets                          |   |   | 13     |   |
| Total      assets                          |   | $      | 6,897  |   |
|                                       |   |   |   |   |
| Liabilities:                               |   |   |   |   |
| Accounts      payable and accrued expenses |   | $      | 209    |   |
| Total      liabilities                     |   | $      | 209    |   |
|                                       |   |   |   |   |

----

|                                                       |   | 2009   |   | 2008   |   | 2007   |    |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|
|                                                       |   |   |   |   |   |   |    |   |   |   |   |   |   |
| Operating      revenues                                    |   | $      | 2,833  |   |   | $      | 9,563   |   |   | $ | 12,480 |   |   |
| Costs      and expenses                                    |   |   | 3,064  |   |   |   | 9,789   |   |   |   | 11,375 |   |   |
| Operating      gain (loss) from discontinued operations    |   |   | (231   | )      |   |   | (226    | ) |   |   | 1,105 |   |   |
| Loss      on disposal of assets of discontinued operations |   |   | (1,188 | )      |   |   | — |   |   |   | — |   |   |
| Income      tax benefit (expense)                          |   |   | 553    |   |   |   | 88      |   |   |   | (440 | ) |   |
| Gain      (loss) from discontinued operations              |   | $      | (866   | )      |   | $      | (138    | ) |   | $ | 665 |   |   |

| Assets:                          |   |   |   |   |
|----------------------------------|--------|--------|--------|--------|
| Property      and equipment, net |   | $      | 18     |   |
| Goodwill                         |   |   | 3,566  |   |
| Intangible      assets, net      |   |   | 2,154  |   |
| Total      assets                |   | $      | 5,738  |   |
|                             |   |   |   |   |
| Liabilities:                     |   |   |   |   |
| Accrued      salaries and wages  |   | $      | 7      |   |
| Total      liabilities           |   | $      | 7      |   |

----

|                                                       |   | 2009   |    | 2008   |   | 2007   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
|                                                       |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                    |   | $      | — |   |   | $      | 3,962  |   |   | $ | 7,125 |   |   |
| Costs      and expenses                                    |   |   | (44     | )      |   |   | 5,471  |   |   |   | 8,791 |   |   |
| Operating      gain (loss) from discontinued operations    |   |   | 44      |   |   |   | (1,509 | ) |   |   | (1,666 | ) |   |
| Loss      on disposal of assets of discontinued operations |   |   | — |   |   |   | 321    |   |   |   | — |   |   |
| Income      tax benefit (expense)                          |   |   | (17     | )      |   |   | 463    |   |   |   | 619 |   |   |
| Gain      (loss) from discontinued operations              |   | $      | 27      |   |   | $      | (725   | ) |   | $ | (1,047 | ) |   |

|  (9)  |  Long-Term  Debt |
|-----------------|-----------------------|

----

|                                                                                                                                                                                                           |   | December      31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                                                                                                                           |   |              | 2009    |   |   | 2008 |   |
|                                                                                                                                                                                                           |   |              |    |   |   |   |   |
| Borrowings      under $175 million revolving credit facility                                                                                                                                                   |   | $                 | — |   | $ | 57,000 |   |
|                                                                                                                                                                                                           |   |              |    |   |   |   |   |
| Borrowings      under $125 million revolving credit facility; maturity date of November      24, 2014                                                                                                          |   |              | — |   |   | — |   |
|                                                                                                                                                                                                           |   |              |    |   |   |   |   |
| Term      loan facility; payable in quarterly installments of $1.1 million with      remaining balance due on November 24, 2015; net of unamortized original      issue discount of $8,892                     |   |              | 441,108 |   |   | — |   |
|                                                                                                                                                                                                           |   |              |    |   |   |   |   |
| Note      payable to bank; bearing interest at prime plus 1%, but not less than 5%      nor greater than 7.5%; payable in monthly installments through January      2011 and $4.2 million due in February 2011 |   |              | 4,528   |   |   | — |   |
|                                                                                                                                                                                                           |   |              |    |   |   |   |   |
| Capital      lease obligations                                                                                                                                                                                 |   |              | 9,631   |   |   | — |   |
|                                                                                                                                                                                                           |   |              | 455,267 |   |   | 57,000 |   |
| Less:  current      portion                                                                                                                                                                          |   |              | (7,507  | ) |   | — |   |
|                                                                                                                                                                                                           |   | $                 | 447,760 |   | $ | 57,000 |   |

----

|   | 2010       | $      | 7,507   |   |
|--------|------------|--------|---------|--------|
|   | 2011       |   | 11,708  |   |
|   | 2012       |   | 7,791   |   |
|   | 2013       |   | 5,148   |   |
|   | 2014       |   | 4,505   |   |
|   | Thereafter |   | 427,500 |   |
|   | Total      | $      | 464,159 |   |

|  (10)   |  Stockholders’      Equity |
|------------------------|---------------------------------------|

----

|  (11) |  Earnings per    Share |
|------------|-----------------------------|

|                                                    | Year      Ended December 31, |   |
|---------------------------------------------------------|------------------------------|--------|
|                                                    |                         | 2009   |   |   |   | 2008 |   |   |   | 2007 |   |   |
| Numerator:                                              |                         |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax    | $                            | 23,794 |   |   | $ | 19,568 |   |   | $ | 13,041 |   |   |
| Loss      from discontinued operations, net of tax      |                         | (839   | ) |   |   | (863 | ) |   |   | (382 | ) |   |
| Net      earnings                                       | $                            | 22,955 |   |   | $ | 18,705 |   |   | $ | 12,659 |   |   |
|                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                            |                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic      weighted average common shares outstanding   |                         | 18,481 |   |   |   | 17,583 |   |   |   | 17,226 |   |   |
| Effect      of dilutive securities:                     |                         |   |   |   |   |   |   |   |   |   |   |   |
| stock      options and restricted stock awards          |                         | 381    |   |   |   | 215 |   |   |   | 233 |   |   |
| Diluted      weighted average common shares outstanding |                         | 18,862 |   |   |   | 17,798 |   |   |   | 17,459 |   |   |
|                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per common share:                   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax    | $                            | 1.29   |   |   | $ | 1.11 |   |   | $ | 0.76 |   |   |
| Loss      from discontinued operations, net of tax      |                         | (0.05  | ) |   |   | (0.05 | ) |   |   | (0.03 | ) |   |
| Net      earnings                                       | $                            | 1.24   |   |   | $ | 1.06 |   |   | $ | 0.73 |   |   |
|                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per common share:                 |                         |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from continuing operations, net of tax    | $                            | 1.26   |   |   | $ | 1.10 |   |   | $ | 0.75 |   |   |
| Loss      from discontinued operations, net of tax      |                         | (0.04  | ) |   |   | (0.05 | ) |   |   | (0.02 | ) |   |
| Net      earnings                                       | $                            | 1.22   |   |   | $ | 1.05 |   |   | $ | 0.73 |   |   |
|                                                    |                         |   |   |   |   |   |   |   |   |   |   |   |

|  (12) |  Employee    Benefits |
|------------|----------------------------|

----

|  (13)  |  Commitments |
|------------------|-------------------|

|   | 2010       |   | $      | 31,611  |   |
|--------|------------|--------|--------|---------|--------|
|   | 2011       |   |   | 32,893  |   |
|   | 2012       |   |   | 32,930  |   |
|   | 2013       |   |   | 32,987  |   |
|   | 2014       |   |   | 33,471  |   |
|   | Thereafter |   |   | 262,711 |   |
|   | Total      |   | $      | 426,603 |   |

----

|   | 2010                                        |   | $      | 3,533   |   |
|--------|---------------------------------------------|--------|--------|---------|--------|
|   | 2011                                        |   |   | 3,532   |   |
|   | 2012                                        |   |   | 3,532   |   |
|   | 2013                                        |   |   | 658     |   |
|   | 2014                                        |   |   | 5       |   |
|   | Thereafter                                  |   |   | — |   |
|   | Total      minimum lease payments           |   |   | 11,260  |   |
|   | Less:      interest portion                 |   |   | (1,629  | )      |
|   | Total      obligations under capital leases |   | $      | 9,631   |   |
|   |                                        |   |   |    |   |

|  (14)  |  Income  Taxes |
|------------------|---------------------|

|   |                          |   | Year      Ended December 31, |   |
|--------|-------------------------------|--------|------------------------------|--------|
|   |                          |   | 2009                         |   |   | 2008 |   |   |   | 2007 |   |
|   | Federal      – current  | $      | 13,051                       |   | $ | 7,282 |   |   | $ | 1,196 |   |
|   | Federal      – deferred |   | 2,183                        |   |   | 3,229 |   |   |   | 6,392 |   |
|   | State                         |   | 2,407                        |   |   | 1,552 |   |   |   | 70 |   |
|   |                          | $      | 17,641                       |   | $ | 12,063 |   |   | $ | 7,658 |   |

|                                                                                                  |   |   | Year      Ended December 31, |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------------------------|--------|
|                                                                                                  |   |   | 2009                         |   |   | 2008 |   |   |   | 2007 |   |
| Expected      income taxes                                                                            |   | $      | 13,814                       |   | $ | 10,376 |   |   | $ | 7,113 |   |
| Tax      effect of interest income from municipal bond obligations exempt from      federal taxation  |   |   | (2                           | )      |   | (1 | ) |   |   | (8 | ) |
| State      income taxes, net of federal income tax benefit                                            |   |   | 1,634                        |   |   | 982 |   |   |   | 120 |   |
| Tax      effect of losses attributable to noncontrolling interests not deductible      by the Company |   |   | 688                          |   |   | 695 |   |   |   | 132 |   |
| Tax      effect on nondeductible acquisition-related expenses                                         |   |   | 1,347                        |   |   | — |   |   |   | — |   |
| Other,      net                                                                                       |   |   | 160                          |   |   | 11 |   |   |   | 301 |   |
|                                                                                                  |   | $      | 17,641                       |   | $ | 12,063 |   |   | $ | 7,658 |   |

----

|                                                              |   | December      31, |    |
|-------------------------------------------------------------------|--------|-------------------|---------|
|                                                              |   | 2009              |    | 2008 |   |
| Deferred      tax assets:                                         |   |              |    |   |   |   |   |
| Allowance      for doubtful accounts                              |   | $                 | 7,588   |   | $ | 5,439 |   |
| Accrued      insurance, vacation, bonus and deferred compensation |   |              | 12,563  |   |   | 8,348 |   |
| Net      operating loss carryforward/capital loss carryforward    |   |              | 1,697   |   |   | 184 |   |
| Stock      based compensation                                     |   |              | 3,081   |   |   | 1,993 |   |
| Other                                                             |   |              | 6,516   |   |   | 4,717 |   |
| Total      gross deferred tax assets                              |   |              | 31,445  |   |   | 20,681 |   |
| Valuation      allowance                                          |   |              | (74     | ) |   | (75 | ) |
| Net      deferred tax assets                                      |   |              | 31,371  |   |   | 20,606 |   |
|                                                              |   |              |    |   |   |   |   |
| Deferred      tax liabilities:                                    |   |              |    |   |   |   |   |
| Acquired      goodwill and intangibles                            |   |              | 47,402  |   |   | 10,500 |   |
| Depreciation      and amortization                                |   |              | 5,229   |   |   | 1,913 |   |
| Other                                                             |   |              | 3,096   |   |   | 1,623 |   |
| Total      deferred tax liabilities                               |   |              | 55,727  |   |   | 14,036 |   |
|                                                              |   | $                 | (24,356 | ) | $ | 6,570 |   |

----

|                                                                 |   |   | 2009  |   |   |   | 2008    |   |
|----------------------------------------------------------------------|--------|--------|-------|--------|--------|--------|---------|--------|
| Balance      at beginning of year                                    |   | $      | 448   |   |   | $      | 308     |   |
| Liability      assumed in acquisition of Triumph                     |   |   | 133   |   |   |   | — |   |
| Increase      as a result of tax positions taken in prior years      |   |   | 510   |   |   |   | 7       |   |
| Increase      as a result of tax positions taken in the current year |   |   | 710   |   |   |   | 212     |   |
| Lapse      of applicable statute of limitations                      |   |   | (154  | )      |   |   | (79     | )      |
| Balance      at end of year                                          |   | $      | 1,647 |   |   | $      | 448     |   |

----

|  (15)  |  Investment in Unconsolidated      Affiliate |
|------------------|---------------------------------------------------|

|  (16)  |  Severance and Restructuring      Costs |
|------------------|----------------------------------------------|

| Balance,      January 1, 2009    |   | $      | — |   |
|----------------------------------|--------|--------|---------|--------|
| Accrual      for severance costs |   |   | 862     |   |
| Payments                         |   |   | (105    | )      |
| Balance,      December 31, 2009  |   | $      | 757     |   |
|                             |   |   |    |   |

| Balance,      January 1, 2008    |   | $      | — |   |
|----------------------------------|--------|--------|---------|--------|
| Accrual      for severance costs |   |   | 2,263   |   |
| Payments                         |   |   | (910    | )      |
| Balance,      December 31, 2008  |   | $      | 1,353   |   |
| Payments                         |   |   | (1,353  | )      |
| Balance,      December 31, 2009  |   | $      | — |   |
|                             |   |   |    |   |

----

|  (17)   |  Related Party      Transactions |
|------------------------|---------------------------------------|

|  (18)   |  Fair Value      Measurements |
|------------------------|------------------------------------|

|                    | December      31, 2009 |   |
|-------------------------|------------------------|--------|
|                    | Carrying               |   |   | Fair      Value Measurements |   |
|                    | Value                  |   |   |  Level      1 |   |  Level      2 |   | Level      3 |   |
|                    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trading      securities | $                      | 3,314  |   |   | $ | 3,314 |   |   | $ | — |   |   | $ | — |   |   |

|                                          | December      31, 2008 |   |
|-----------------------------------------------|------------------------|--------|
|                                          | Carrying               |   |   | Fair      Value Measurements |   |
|                                          | Value                  |   |   |  Level      1 |   |  Level      2 |   | Level      3 |   |
|                                          |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trading      securities                       | $                      | 2,810  |   |   | $ | 2,810 |   |   | $ | — |   |   | $ | — |   |   |
| Interest      rate swap                       |                   | (692   | ) |   |   | — |   |   |   | (692 | ) |   |   | — |   |   |
| Total      net financial assets (liabilities) | $                      | 2,118  |   |   | $ | 2,810 |   |   | $ | (692 | ) |   | $ | — |   |   |

----

|  (19)  |  Industry Segment      Information |
|------------------|-----------------------------------------|

|                                         |   | Operating      Revenues |   |   |    | Operating      Earnings (Loss) |   |
|----------------------------------------------|--------|-------------------------|--------|--------|---------|--------------------------------|--------|
|                                         |   | 2009                    |   |   | 2008    |                           |   | 2007 |   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Program      management:                     |   |                    |   |   |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Skilled      nursing rehabilitation services | $      | 496,250                 |   | $      | 457,229 |                           | $      | 432,910 |   |   | $ | 37,753 |   | $ | 25,544 |   | $ | 7,249 |   |
| Hospital      rehabilitation services        |   | 178,168                 |   |   | 165,658 |                           |   | 164,102 |   |   |   | 29,487 |   |   | 21,997 |   |   | 22,893 |   |
| Program      management total                |   | 674,418                 |   |   | 622,887 |                           |   | 597,012 |   |   |   | 67,240 |   |   | 47,541 |   |   | 30,142 |   |
| Hospitals                                    |   | 195,009                 |   |   | 112,525 |                           |   | 96,001 |   |   |   | (22,512 | ) |   | (13,903 | ) |   | (1,972 | ) |
| Unallocated      corporate expenses (1)      |   | N/A                     |   |   | N/A     |                           |   | N/A |   |   |   | (254 | ) |   | (731 | ) |   | (640 | ) |
| Total                                        | $      | 869,427                 |   | $      | 735,412 |                           | $      | 693,013 |   |   | $ | 44,474 |   | $ | 32,907 |   | $ | 27,530 |   |

----

|                                         |   | Depreciation      and Amortization |   |   |   | Capital      Expenditures |   |
|----------------------------------------------|--------|------------------------------------|--------|--------|--------|---------------------------|--------|
|                                         |   | 2009                               |   |   | 2008   |                      |   | 2007 |   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Program      management:                     |   |                               |   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Skilled      nursing rehabilitation services | $      | 6,283                              |   | $      | 6,835  |                      | $      | 8,777 |   |   | $ | 2,422 |   | $ | 3,824 |   | $ | 2,530 |   |
| Hospital      rehabilitation services        |   | 2,423                              |   |   | 2,641  |                      |   | 4,104 |   |   |   | 1,328 |   |   | 1,032 |   |   | 442 |   |
| Program      management total                |   | 8,706                              |   |   | 9,476  |                      |   | 12,881 |   |   |   | 3,750 |   |   | 4,856 |   |   | 2,972 |   |
| Hospitals                                    |   | 7,793                              |   |   | 5,094  |                      |   | 3,657 |   |   |   | 9,465 |   |   | 13,604 |   |   | 6,824 |   |
| Healthcare      management consulting (2)    |   | N/A                                |   |   | N/A    |                      |   | N/A |   |   |   | — |   |   | 42 |   |   | 193 |   |
| Total                                        | $      | 16,499                             |   | $      | 14,570 |                      | $      | 16,538 |   |   | $ | 13,215 |   | $ | 18,502 |   | $ | 9,989 |   |

|                                         |   | Total      Assets       |   |   |    |
|----------------------------------------------|--------|-------------------------|--------|--------|---------|
|                                         |   | as      of December 31, |   |   |    |
|                                         |   | 2009                    |   |   | 2008    |   |   | 2007 |   |   |   |
| Program      management:                     |   |                    |   |   |    |   |   |   |   |   |   |
| Skilled      nursing rehabilitation services | $      | 187,744                 |   | $      | 198,236 |   | $ | 201,482 |   |   |   |
| Hospital      rehabilitation services        |   | 127,212                 |   |   | 115,044 |   |   | 105,292 |   |   |   |
| Program      management total                |   | 314,956                 |   |   | 313,280 |   |   | 306,774 |   |   |   |
| Hospitals      (3)                           |   | 795,024                 |   |   | 118,267 |   |   | 93,659 |   |   |   |
| Healthcare      management consulting        |   | —                 |   |   | 6,859   |   |   | 8,127 |   |   |   |
| Total                                        | $      | 1,109,980               |   | $      | 438,406 |   | $ | 408,560 |   |   |   |

|   | (1) | Represents      general corporate overhead expenses associated with Phase 2 Consulting,      Inc., which was sold effective June 1, 2009.  All other costs      and expenses associated with Phase 2 have been reported in discontinued      operations. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The      healthcare management consulting segment consists of Phase 2 Consulting,      Inc., which was sold effective June 1, 2009.  Depreciation and      amortization expense associated with Phase 2 has been reported in      discontinued operations. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Hospitals      segment total assets include the carrying value of the Company’s      investment in HRSC. |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

|  (20)  |  Quarterly Financial Information      (Unaudited) |
|------------------|--------------------------------------------------------|

----

|                                                      |   | Quarter      Ended |                                       |
|-----------------------------------------------------------|--------|--------------------|--------------------------------------------|
| 2009                                                      |   | December      31   |                                       | September      30 |   | June      30 |   | March      31 |
|                                                      |   |               | (in      thousands, except per share data) |   |
|                                                      |   |               |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                   |   | $                  | 254,692                                    |   |   | $ | 208,040 |   |   | $ | 205,164 |   |   | $ | 201,531 |   |
| Operating      earnings (1)                               |   |               | 6,872                                      |   |   |   | 10,480 |   |   |   | 12,832 |   |   |   | 14,290 |   |
| Earnings      from continuing operations, net of tax      |   |               | 295                                        |   |   |   | 5,706 |   |   |   | 7,430 |   |   |   | 8,397 |   |
| Gain      (loss) from discontinued operations, net of tax |   |               | 8                                          |   |   |   | (16 | ) |   |   | (882 | ) |   |   | 51 |   |
| Net      earnings                                         |   |               | 303                                        |   |   |   | 5,690 |   |   |   | 6,548 |   |   |   | 8,448 |   |
| Net      earnings attributable to RehabCare               |   |               | 655                                        |   |   |   | 6,757 |   |   |   | 6,883 |   |   |   | 8,660 |   |
| Net      earnings per share attributable to RehabCare:    |   |               |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   |               | 0.03                                       |   |   |   | 0.38 |   |   |   | 0.39 |   |   |   | 0.49 |   |
| Diluted                                                   |   |               | 0.03                                       |   |   |   | 0.37 |   |   |   | 0.38 |   |   |   | 0.48 |   |

|                                                   |   | Quarter      Ended |                                       |
|--------------------------------------------------------|--------|--------------------|--------------------------------------------|
| 2008                                                   |   | December      31   |                                       | September      30 |   | June      30 |   | March      31 |
|                                                   |   |               | (in      thousands, except per share data) |   |
|                                                   |   |               |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                |   | $                  | 192,059                                    |   |   | $ | 181,350 |   |   | $ | 181,899 |   |   | $ | 180,104 |   |
| Operating      earnings                                |   |               | 9,511                                      |   |   |   | 7,080 |   |   |   | 7,786 |   |   |   | 8,530 |   |
| Earnings      from continuing operations, net of tax   |   |               | 5,408                                      |   |   |   | 3,666 |   |   |   | 4,008 |   |   |   | 4,500 |   |
| Loss      from discontinued operations, net of tax     |   |               | (352                                       | ) |   |   | (280 | ) |   |   | (159 | ) |   |   | (72 | ) |
| Net      earnings                                      |   |               | 5,056                                      |   |   |   | 3,386 |   |   |   | 3,849 |   |   |   | 4,428 |   |
| Net      earnings attributable to RehabCare            |   |               | 5,703                                      |   |   |   | 3,998 |   |   |   | 4,496 |   |   |   | 4,508 |   |
| Net      earnings per share attributable to RehabCare: |   |               |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                  |   |               | 0.32                                       |   |   |   | 0.23 |   |   |   | 0.26 |   |   |   | 0.26 |   |
| Diluted                                                |   |               | 0.32                                       |   |   |   | 0.22 |   |   |   | 0.25 |   |   |   | 0.25 |   |

----

|  (21)  |  Contingencies |
|------------------|---------------------|

----

|  ITEM 9.  |  CHANGES IN AND DISAGREEMENTS      WITH ACCOUNTANTS    |
|---------------------|----------------------------------------------------------------------------|
|                |  ON ACCOUNTING AND FINANCIAL      DISCLOSURE                          |

|  ITEM 9A. |  CONTROLS AND      PROCEDURES |
|----------------|------------------------------------|

----

|  ITEM 9B. |  OTHER  INFORMATION |
|----------------|------------------------------------|

|  ITEM 10. |  DIRECTORS, EXECUTIVE OFFICERS      AND CORPORATE GOVERNANCE |
|----------------|-------------------------------------------------------------------|

|   | · | Information      regarding directors who are standing for reelection and any persons      nominated to become directors is set forth under the caption "Election of      Directors." |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Information      regarding the Company’s audit committee and designated "audit committee      financial experts" is set forth under the caption "Audit      Committee." |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Information      regarding Section 16(a) beneficial ownership reporting compliance is set      forth under the caption "Section 16(a) Beneficial Ownership Reporting      Compliance." |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                      |   | Age |   | Position                                                  |
|---------------------------|--------|-----|--------|-----------------------------------------------------------|
| John      H. Short, Ph.D. |   | 65  |   | President      and Chief Executive Officer                |
| Jay      W. Shreiner      |   | 59  |   | Executive      Vice President, Chief Financial Officer    |
| Patricia      S. Williams |   | 42  |   | Senior      Vice President, General Counsel and Secretary |
| Patricia      M. Henry    |   | 57  |   | Executive      Vice President, Operations                 |
| Mary      Pat Welc        |   | 55  |   | Senior      Vice President, Operations                    |
| Kevin      J. Gross       |   | 54  |   | Senior      Vice President, Operations                    |
| James      F. Martin      |   | 59  |   | Senior      Vice President, Chief Human Resources Officer |
| Jeff      A. Zadoks       |   | 44  |   | Senior      Vice President, Chief Accounting Officer      |
| Samuel      W. Duggan II  |   | 46  |   | Vice      President, Treasurer                            |

----

| ITEM      11. | EXECUTIVE      COMPENSATION |
|---------------|-----------------------------|

|  ITEM 12. |  SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND |
|----------------|----------------------------------------------------------------|
|           |  MANAGEMENT AND RELATED      STOCKHOLDER MATTERS          |

----

| Plan      category                                              | Number      ofsecurities      tobe      issueduponexercise      ofoutstandingoptions,warrants      andrights(a) | Weighted-averageexercise      price ofoutstandingoptions,      warrantsand      rights (b) | Number      of securitiesremaining      availablefor      future issuanceunder      equitycompensation      plans(excluding      securitiesreflected      in column (a))  (c) |
|-----------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Equity      compensation plans approved by security holders     | 870,829                                                                                                         | $25.11                                                                                          | 274,903                                                                                                                                                                                 | (1) |
| Equity      compensation plans not approved by security holders | -                                                                                                               | -                                                                                               | -                                                                                                                                                                                       |   |
| Total                                                           | 870,829                                                                                                         | $25.11                                                                                          | 274,903                                                                                                                                                                                 |   |

|   | (1) | Represents      the number of shares of common stock available for future issuance under      the Company’s 2006 Equity Incentive Plan.  Permissible awards      under the Company’s plan include stock options, stock appreciation rights,      restricted stock, stock units and other equity-based    awards. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  ITEM 13. | CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR      INDEPENDENCE |
|----------------|-------------------------------------------------------------------------------------|

|  ITEM 14. |  PRINCIPAL ACCOUNTANT FEES AND      SERVICES |
|----------------|---------------------------------------------------|

----

| ITEM      15. | EXHIBITS      AND FINANCIAL STATEMENT SCHEDULES |
|---------------|-------------------------------------------------|

| (a)    | The      following documents are filed as part of this Annual Report on Form      10-K: |
|--------|-----------------------------------------------------------------------------------------|
|   |                                                                                    |   |
|   | (1)                                                                                     | Financial      Statements: |
|   |                                                                                    |   |   |
|   |                                                                                    |   | Report      of Independent Registered Public Accounting Firm |
|   |                                                                                    |   | Consolidated      Balance Sheets as of December 31, 2009 and 2008 |
|   |                                                                                    |   | Consolidated      Statements of Earnings for the years ended December 31, 2009, 2008 and      2007 |
|   |                                                                                    |   | Consolidated      Statements of Comprehensive Income for the years ended December 31, 2009,      2008 and 2007 |
|   |                                                                                    |   | Consolidated      Statements of Changes in Equity for the years ended December 31, 2009,      2008 and 2007 |
|   |                                                                                    |   | Consolidated      Statements of Cash Flows for the years ended December 31, 2009, 2008 and      2007 |
|   |                                                                                    |   | Notes      to Consolidated Financial Statements |
|   |                                                                                    |   |
|   | (2)                                                                                     | Financial      Statement Schedules: |
|   |                                                                                    |   |   |
|   |                                                                                    |   | None |
|   |                                                                                    |   |   |
|   | (3)                                                                                     | Exhibits: |
|   |                                                                                    |   |   |
|   |                                                                                    |   | See      Exhibit Index on page 88 of this Annual Report on Form    10-K. |

----

|   | SIGNATURES |
|--------|------------|

|            | REHABCARE      GROUP, INC.                 |
|-----------------|--------------------------------------------|
|            | (Registrant)                               |
|            |                                       |
| By       : | /s/      John H.      Short                |
|            | John      H. Short                         |
|            | President      and Chief Executive Officer |

| Signature                           |   | Title                             |   | Dated              |
|-------------------------------------|--------|-----------------------------------|--------|--------------------|
|                                |   |                              |   |               |
| /s/      John H.      Short         |   | President,      Chief Executive   |   | March      8, 2010 |
| John      H. Short                  |   | Officer      and Director         |   |               |
| (Principal      Executive Officer)  |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Jay W.      Shreiner       |   | Executive      Vice President and |   | March      8, 2010 |
| Jay      W. Shreiner                |   | Chief      Financial Officer      |   |               |
| (Principal      Financial Officer)  |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Jeff A.      Zadoks        |   | Senior      Vice President and    |   | March      8, 2010 |
| Jeff      A. Zadoks                 |   | Chief      Accounting Officer     |   |               |
| (Principal      Accounting Officer) |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Colleen      Conway-Welch  |   | Director                          |   | March      8, 2010 |
| Colleen      Conway-Welch           |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Christopher T.      Hjelm  |   | Director                          |   | March      8, 2010 |
| Christopher      T. Hjelm           |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Anthony S.      Piszel     |   | Director                          |   | March      8, 2010 |
| Anthony      S. Piszel              |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Suzan L.      Rayner       |   | Director                          |   | March      8, 2010 |
| Suzan      L. Rayner                |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Harry E.      Rich         |   | Director                          |   | March      8, 2010 |
| Harry      E. Rich                  |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Larry      Warren          |   | Director                          |   | March      8, 2010 |
| Larry      Warren                   |   |                              |   |               |
|                                |   |                              |   |               |
| /s/      Theodore M.      Wight     |   | Director                          |   | March      8, 2010 |
| Theodore      M. Wight              |   |                              |   |               |
|                                |   |                              |   |               |

----

| 2.1 | Agreement      and Plan of Merger, dated November 3, 2009, between the Registrant,      RehabCare Group East, Inc., RehabCare Hospital Holdings, L.L.C., RehabCare      Merger Sub Corporation, Triumph HealthCare Holdings, Inc. and TA      Associates, Inc. (filed as Exhibit 99.2 to the Registrant’s Current Report      on Form 8-K dated November 3, 2009 and incorporated herein by      reference) |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | Restated      Certificate of Incorporation (filed as Exhibit 3.1 to the Registrant’s      Registration Statement on Form S-1, dated May 9, 1991 [Registration No.      33-40467], and incorporated herein byreference) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Certificate      of Amendment of Certificate of Incorporation (filed as Exhibit 3.1 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended May 31,      1995 and incorporated herein byreference) |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Amended      and Restated Bylaws, dated October 30, 2007 (filed as Exhibit 3.1 to the      Registrant’s Current Report on Form 8-K dated October 31, 2007 and      incorporated herein by reference) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Rights      Agreement, dated August 28, 2002, by and between the Registrant and      Computershare Trust Company, Inc. (filed as Exhibit 1 to the Registrant’s      Registration Statement on Form 8-A filed September 5, 2002 and      incorporated herein by reference) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | 1987      Incentive Stock Option and 1987 Nonstatutory Stock Option Plans (filed as      Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1, dated      May 9, 1991 [Registration No. 33-40467] and incorporated herein by      reference) * |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Form      of Stock Option Agreement for 1987 Incentive Stock Option and 1987      Nonstatutory Stock Option Plans (filed as Exhibit 10.2 to the Registrant’s      Registration Statement on Form S-1, dated May 9, 1991 [Registration No.      33-40467] and incorporated herein by reference) * |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Termination      Compensation Agreement, dated December 11, 2007 by and between RehabCare      Group, Inc. and John H. Short, Ph.D. (filed as Exhibit 10.1 to      Registrant’s Annual Report on Form 8-K dated December 12, 2007 and      incorporated herein by reference) * |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Amendment      to Termination Compensation Agreement, dated December 11, 2007 by and      between RehabCare Group, Inc. and John H. Short, Ph.D. (filed as Exhibit      10.1 to Registrant’s Current Report on Form 8-K dated December 12, 2008      and incorporated herein by reference)* |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Termination      Compensation Agreement dated December 8, 2008 by and between RehabCare      Group, Inc. and Jay W. Shreiner (filed as Exhibit 10.2 to Registrant’s      Current Report on Form 8-K dated December 12, 2008 and incorporated herein      by reference) * |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.6 | Termination      Compensation Agreement dated December 8, 2008 by and between RehabCare      Group, Inc. and Patricia M. Henry (filed as Exhibit 10.3 to Registrant’s      Current Report on Form 8-K dated December 12, 2008 and incorporated herein      by reference) * |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Form      of Change in Control Termination Agreement dated December 8, 2008 by and      between RehabCare Group, Inc. and Mary Patricia Welc (filed as Exhibit      10.4 to Registrant’s Current Report on Form 8-K dated December 12, 2008      and incorporated herein by reference)* |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Change      in Control Termination Agreement dated November 12, 2007 by and between      RehabCare Group, Inc. and Patricia S. Williams (filed as Exhibit 10.6 to      Registrant’s Annual Report on Form 10-K for the year ended December 31,      2007 and incorporated herein by reference)* |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9 | Form      of Termination Compensation Agreement dated March 10, 2006 by and between      RehabCare Group, Inc. and other executive officers who are not named      executive officers in the Registrant’s proxy statement for the 2006 annual      meeting of stockholders (filed as Exhibit 10.5 to Registrant’s Annual      Report on Form 10-K for the year ended December 31, 2005 and incorporated      herein by reference) * |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | RehabCare      Severance Plan for Company Senior Vice Presidents effective January 1,      2009 (filed as Exhibit 10.5 to Registrant’s Current Report on Form 8-K      dated December 12, 2008 and incorporated herein by reference)      * |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | RehabCare      Severance Plan for Company Vice Presidents effective January 1, 2009      (filed as Exhibit 10.6 to Registrant’s Current Report on Form 8-K dated      December 12, 2008 and incorporated herein by reference)  * |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | RehabCare      Executive Deferred Compensation Plan (filed as Exhibit 10.12 to the      Registrant’s Report on Form 10-K, dated May 27, 1994 and incorporated      herein by reference) * |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | RehabCare      Executive Deferred Compensation Plan as amended and restated effective      January 1, 2009 (filed as Exhibit 10.7 to Registrant’s Current Report on      Form 8-K dated December 12, 2008 and incorporated herein by reference)      * |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14 | RehabCare      Directors’ Stock Option Plan (filed as Appendix A to Registrant’s      definitive Proxy Statement for the 1994 Annual Meeting of Stockholders and      incorporated herein by reference) * |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Second      Amended and Restated 1996 Long-Term Performance Plan (filed as Appendix B      to Registrant’s definitive Proxy Statement for the 2004 Annual Meeting of      Stockholders and incorporated herein by reference) * |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Form      of Stock Option Agreement for the Second Amended and Restated 1996      Long-Term Performance Plan (filed as Exhibit 10.10 to the Registrant’s      Annual Report on Form 10-K for the year ended December 31, 2005 and      incorporated herein by reference) * |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.17 | Form      of Restricted Stock Agreement for the Second Amended and Restated 1996      Long-Term Performance Plan (filed as Exhibit 10.11 to the Registrant’s      Annual Report on Form 10-K for the year ended December 31, 2005 and      incorporated herein by reference) * |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | RehabCare      Group, Inc. 2006 Equity Incentive Plan (filed as Appendix A to the      Registrant’s Definitive Proxy Statement for the 2006 Annual Meeting of      Shareholders and incorporated herein by reference)  * |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Amended      and Restated Credit Agreement, dated November 24, 2009, by and among      RehabCare Group, Inc., as borrower, certain subsidiaries and affiliates of      the borrower, as guarantors, and Bank of America, N.A., as administrative      agent and collateral agent, and Banc of America Securities LLC, RBC      Capital Markets and BNP Paribas Securities Corp., as joint lead arrangers      (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      dated November 24, 2009 and incorporated herein by    reference) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Pledge      Agreement, dated as of November 24, 2009, by and among RehabCare Group,      Inc. and subsidiaries, as pledgors, and Bank of America, N.A., as      collateral agent (filed as Exhibit 10.1 to the Registrant’s Current Report      on Form 8-K dated November 24, 2009 and incorporated herein by      reference) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21 | Security      Agreement, dated as of November 24, 2009, by and among RehabCare Group,      Inc. and subsidiaries, as grantors, and Bank of America, N.A., as      collateral agent (filed as Exhibit 10.1 to the Registrant’s Current Report      on Form 8-K dated November 24, 2009 and incorporated herein by      reference) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22 | Non-Continuous      Aircraft Dry Lease Agreement by and between 55JS Limited, Co. and      RehabCare Group, Inc. (filed as Exhibit 10.1 to Registrant’s Current      Report on Form 8-K dated September 7, 2006 and incorporated herein by      reference) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23 | Asset      Purchase Agreement dated June 8, 2005 by and among RehabCare Group East,      Inc., a wholly owned subsidiary of Registrant, MeadowBrook HealthCare,      Inc., MeadowBrook Specialty Hospital of Tulsa LLC, Lafayette Rehab      Associate Limited Partnership, Clear Lake Rehabilitation Hospital, Inc.      and South Dade Rehab Associates Limited Partnership (filed as Exhibit 10.1      to Registrant’s Current Report on Form 8-K dated August 4, 2005 and      incorporated herein by reference) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24 | Purchase      and Sale Agreement, dated May 3, 2006, by and among LUK-Symphony      Management, LLC, Symphony Health Services, LLC and RehabCare Group, Inc.      (filed as exhibit 10.1 to the Registrant’s Current Report on Form 8-K      dated May 8, 2006 and incorporated herein by  reference) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25 | Termination      Compensation Agreement dated July 1, 2008 by and between RehabCare Group,      Inc. and Kevin Gross (filed as Exhibit 10.2 to Registrant’s Current Report      on Form 8-K dated July 7, 2008 and incorporated herein by reference)      * |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.1 | Subsidiaries      of the Registrant (filed herewith) |
|------|------------------------------------------------------|

| 23.1 | Consent      of KPMG LLP (filed herewith) |
|------|-------------------------------------------|

----

| 31.1 | Certification      by Chief Executive Officer in accordance with Rule 13a-14(a) under the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (filedherewith) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      by Chief Financial Officer in accordance with Rule 13a-14(a) under the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002 (filedherewith) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification      by Chief Executive Officer in accordance with 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed      herewith) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      by Chief Financial Officer in accordance with 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed      herewith) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|