Kindred Healthcare Acquires Home Health Operations in California

Kindred Healthcare, Inc. (the "Company” or "Kindred”) (NYSE:KND) today announced that its subsidiaries have acquired the California operations of CareSouth HHA Holdings, LLC ("CareSouth”), a home health company in California. The financial terms of the transaction were not disclosed. The Company financed the transaction with proceeds from its revolving credit facility.

CareSouth operates four locations in Southern California and the San Jose market. Kindred currently operates 13 long-term acute care hospitals, two nursing and rehabilitation centers, and one subacute unit within the service areas of these home health operations.

The assets being acquired generated revenues of approximately $11 million in fiscal year 2010.

Paul J. Diaz, President and Chief Executive Officer of the Company, commented that, "This transaction is another example of how we are expanding our post-acute continuum of service lines in local markets to meet patient needs. Expanding our home health operations provides us the opportunity to continue the care for our patients and residents who are discharged from hospitals and nursing and rehabilitation centers.”

About Kindred Healthcare

Kindred Healthcare, Inc., a top-200 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of over $4.3 billion and approximately 56,800 employees in 40 states. At December 31, 2010, Kindred through its subsidiaries provided healthcare services in 696 locations, including 89 long-term acute care hospitals, 226 nursing and rehabilitation centers and a contract rehabilitation services business, Peoplefirst rehabilitation services, which served 381 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies three years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com.