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NEW BILL IN U.S. HOUSE INTRODUCED BY ENGLISH AND POMEROY WOULD REQUIRE ADDITIONAL CERTIFICATION CRITERIA FOR LTAC HOSPITALS

Praising Bill, Kindred Healthcare Characterizes Legislation as Important Step Towards Advancing Post-Acute Care Policy by Ensuring Appropriate Placement of Medically Complex Patients in LTAC Hospitals

Louisville, KY (September 29, 2006) – Kindred Healthcare, Inc. (“Kindred”) (NYSE: KND) today praised U.S. Representatives Phil English (R-PA) and Earl Pomeroy (D-ND) for introducing a bipartisan bill that would create additional certification criteria for the nation’s long-term acute care (“LTAC”) hospitals.

Paul J. Diaz, President and Chief Executive Officer of Kindred, stated: “Kindred has long advocated a more rational post-acute Medicare policy that places patients in the most cost-effective setting that fits patients’ clinical needs. The English-Pomeroy Bill advances this policy by ensuring that only the most medically complex Medicare beneficiaries have access to LTAC services. At the same time, the bill ensures that patients that can be appropriately cared for in lower acuity settings such as skilled nursing facilities have access to those services.”

The English-Pomeroy bill is consistent with MedPAC’s June 2004 recommendations to Congress that called for “patient” and “facility” LTAC certification criteria to better define the appropriate role of LTACs in the post-acute continuum. The bill also calls for a quality initiative specifically designed to ensure high quality care for the unique patient population served by LTAC hospitals.

Mr. Diaz further stated, “We have strongly advocated the development of additional LTAC certification criteria, along with enforcement of existing rules, as a more rational way to address LTAC hospital policy issues rather than payment cuts. Congressmen English and Pomeroy should be commended for proposing legislation that at the same time advances post-acute care policy and achieves what we believe are substantial Medicare budget savings.

“We look forward to working with Congressman English, Congressman Pomeroy and the Centers for Medicare and Medicaid Services to pass this legislation and we will continue to work to ensure Medicare beneficiaries who need LTAC hospital services receive high quality patient-centered care in the most appropriate setting.”

About Kindred Healthcare

Kindred Healthcare, Inc. (NYSE: KND), is a Fortune 500 healthcare services company, based in Louisville, Kentucky, with annualized revenues of $4.3 billion that provides services in over 500 locations in 39 states. Kindred through its subsidiaries operates long-term acute care hospitals, skilled nursing centers, institutional pharmacies and a contract rehabilitation services business, Peoplefirst Rehabilitation Services, across the United States. Kindred’s 56,000 employees are committed to providing high quality patient care and outstanding customer service to become the most trusted and respected provider of healthcare services in every community we serve. For more information, go to www.kindredhealthcare.com.

CONTACT:
Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296

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