RehabCare Group Completes Purchase of MeadowBrook Healthcare; Acquisition Brings Continuum of Care Opportunities to Four Potential Target Markets.

ST. LOUIS -- RehabCare Group, Inc. (NYSE:RHB) today announced that it has completed the purchase of the operating assets of MeadowBrook Healthcare Inc. for approximately $36.5 million. The purchase price was funded from a combination of $27.5 million in cash on hand and credit facilities, plus $9 million in subordinated notes. The Company has concurrently entered into leases with respect to the four MeadowBrook facilities with SunTrust Equity Funding ("STEF"), a wholly-owned subsidiary of SunTrust Bank. STEF acquired the real estate from MeadowBrook and affiliates in a separate transaction that closed concurrently with the Company's asset purchase.

Based in Birmingham, AL, MeadowBrook operates freestanding acute rehabilitation hospitals and long-term acute care hospitals ("LTACHs") in Miami, FL, Houston, TX, Tulsa, OK and Lafayette, LA. MeadowBrook generated revenue in 2004 of approximately $53 million. RehabCare expects the acquisition to contribute $21 million to $25 million in net revenue and $0.01 to $0.03 to earnings per diluted share during the balance of 2005.

John H. Short, Ph.D., President and CEO of RehabCare, commented, "We are pleased to finalize the purchase of MeadowBrook Healthcare, which represents our largest transaction to date since we redefined the Company's strategy in 2003. MeadowBrook brings us four potential target markets to complement the five that we currently have. It will also bring us back office and information systems to support the seven freestanding rehabilitation hospitals that we expect to have in place by early 2006, including our recently announced Arlington, TX and Amarillo, TX facilities. We will continue to focus on using joint ventures and acquisitions such as this to deliver the post-acute continuum of rehabilitative care to additional target markets."

RehabCare Group, Inc., headquartered in St. Louis, MO, is a leading provider of contract therapy and program management services for hospital inpatient rehabilitation, skilled nursing units, and outpatient therapy programs in conjunction with more than 900 hospitals and skilled nursing facilities in 38 states, the District of Columbia and Puerto Rico. RehabCare is pleased to be included in the Russell 2000 and Standard and Poor's Small Cap 600 indices.

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause RehabCare's actual results in future periods to differ materially from forecasted results. These risks and uncertainties may include, but are not limited to, the ability of RehabCare to consummate acquisitions; RehabCare's ability to integrate acquisitions, including MeadowBrook, and client partnering relationships within the expected timeframes and to achieve the revenue and earnings levels from such acquisitions and relationships at or above the levels projected; changes in governmental reimbursement rates and other regulations or policies affecting governmental and third party reimbursement for services provided by RehabCare; the operational, administrative and financial effect of RehabCare's compliance with other governmental regulations and applicable licensing and certification requirements; RehabCare's ability to attract new client relationships or to retain and grow existing client relationships through expansion of RehabCare's contract therapy and hospital rehabilitation services offerings and the development of alternative product offerings; the ability of new management of InteliStaf Holdings, Inc., an unconsolidated affiliate of RehabCare, to complete its business assessment of InteliStaf on a timely basis and to institute a business restructuring to improve revenues and earnings; the results of RehabCare's impairment analysis to be conducted with respect to the carrying value of its investment in InteliStaf; the future financial results of RehabCare's other unconsolidated affiliates; the adequacy and effectiveness of RehabCare's operating and administrative systems; RehabCare's ability to attract and the additional costs of attracting administrative, operational and professional employees; significant increases in health, workers' compensation and professional and general liability costs; litigation risks of RehabCare's past and future business, including RehabCare's ability to predict the ultimate costs and liabilities or the disruption of its operations; competitive and regulatory effects on pricing and margins; and general and economic conditions, including efforts by governmental reimbursement programs, insurers, healthcare providers and others to contain healthcare costs.

NOTE: More information on RehabCare can be found on the World Wide Web at http://www.rehabcare.com