Exhibit 99.1

CONTACT:

R. Dirk Allison

Senior Vice President and Chief Financial Officer

(214) 922-9711

ODYSSEY HEALTHCARE REPORTS

FOURTH QUARTER AND YEAR-END 2009 RESULTS

DALLAS, TEXAS (February 17, 2010) — Odyssey HealthCare, Inc. (NASDAQ: ODSY), one of the largest providers of hospice care in the United States, today announced financial results for the fourth quarter and year ended December 31, 2009.

For the fourth quarter of 2009, net patient service revenue from continuing operations increased 3.6% to $173.4 million, compared with $167.3 million for the fourth quarter of 2008.  The Company’s net income attributable to Odyssey stockholders for the fourth quarter of 2009 was $11.8 million, or $0.35 per diluted share, as compared with $5.4 million, or $0.16 per diluted share, for the fourth quarter of 2008.  The Company’s EBITDA from continuing operations for the fourth quarter of 2009 was $22.3 million, compared with $12.9 million for the fourth quarter of 2008.

For the year ended December 31, 2009, net patient service revenue from continuing operations was $686.4 million, compared with $616.0 million for 2008.  The Company’s net income attributable to Odyssey stockholders for the year ended December 31, 2009 was $40.6 million, or $1.22 per diluted share, as compared with $14.4 million, or $0.43 per diluted share, for 2008.  The Company’s EBITDA from continuing operations for 2009 was $79.1 million, compared with $44.4 million for 2008.

In commenting on the results, Robert A. Lefton, president and chief executive officer of Odyssey HealthCare, said, “I am pleased with our operating results for the fourth quarter of 2009 and for the full year.  We experienced good admission growth during the fourth quarter with admissions volume increasing by 1.7% over the fourth quarter of 2008.  Our average daily census increased slightly from 12,357 for the fourth quarter of 2008 to 12,427 for the fourth quarter of 2009.  Our admissions during the quarter were instrumental in achieving a Medicare cap contractual of only 1.1% of gross revenue for the fourth quarter of 2009 as compared with 1.8% for the fourth quarter of 2008.

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ODSY Announces Fourth Quarter and Year-End 2009 Results

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February 17, 2010

“I am also pleased with our expense management during the fourth quarter.  Adjusted operating expenses per patient day actually decreased from $135.63 for the fourth quarter of 2008 to $132.12 for the fourth quarter of 2009.  This decrease in adjusted operating expenses is due in large part to a reduction in our workers’ compensation expense, several cost savings initiatives that we put in place in 2009 and our continued ability to leverage corporate and program level overhead expenses as patient census increases.  The decrease in our Medicare cap contractual as a percentage of gross revenue and reductions in our adjusted operating expenses per patient day resulted in solid operating margins for the fourth quarter of 2009.”

In closing, Mr. Lefton added, “As a result of our strong earnings performance and improved cash collections during the year, our balance sheet was strengthened significantly in 2009.  We ended the year with a cash balance of $128.6 million, and our cash balance now exceeds our long term debt.”

On October 1, 2009, payments to Medicare participating hospices increased by approximately 1.4%.  This increase includes the first year phase-out of the budget neutrality adjustment factor (“BNAF”) used in computing the hospice wage index.  The phase-out of the BNAF will occur over a seven-year period with 10% in the first year and an additional 15% in each of the following six years.

The Company also announced that during the first quarter of 2010 it acquired a small hospice program in Overland Park, Kansas, to complement the Company’s existing program located in Kansas City, Missouri, and received a certificate of need to develop and operate a hospice program in Seattle, Washington.  The Company noted that the award of the certificate of need is being contested by several hospice programs currently operating in the Seattle, Washington, market.

Conference Call

Odyssey will host a conference call to discuss the fourth quarter and year-end 2009 results on Thursday, February 18, 2010, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time).  The call will be broadcast live and can be accessed through the Investor Relations section of the Company’s website at www.odsyhealth.com or at www.earnings.com.  An online archive of the broadcast, commencing approximately two hours after the live call, will also be available for two weeks.

Based in Dallas, Texas, Odyssey is one of the largest providers of hospice care in the country in terms of both average daily patient census and number of locations.  Odyssey seeks to improve the quality of life of terminally ill patients and their families by providing care directed at managing pain and other discomforting symptoms and by addressing the psychosocial and spiritual needs of patients and their families.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure included in this press release and is reconciled to the comparable GAAP financial measure in the tables attached to this press release.

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ODSY Announces Fourth Quarter and Year-End 2009 Results

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February 17, 2010

In December 2007, the FASB issued a new accounting pronouncement regarding noncontrolling interests and the deconsolidation of a subsidiary (formerly SFAS No. 160 – “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”).  As a result of adopting this pronouncement at the start of fiscal 2009, the Company has changed its income statement presentation of noncontrolling interests (previously shown as minority interest).  Minority interest is no longer separately reported as a reduction to net income but is instead shown below net income under the heading “net income attributable to noncontrolling interests.”  The calculation of earnings per share is based on income attributable to Odyssey stockholders.  The Company’s Form 10-K filing with the SEC will contain additional information regarding the accounting and reporting impact of the Company’s adoption of this pronouncement.

Certain statements contained in this press release and that will be contained in the presentation are forward-looking statements within the meaning of the federal securities laws.  Such forward-looking statements are based on management’s current expectations and are subject to known and unknown risks, uncertainties and assumptions which may cause the forward-looking events and circumstances discussed in this press release and in the presentation to differ materially from those anticipated or implied by the forward-looking statements.  Additional risks, uncertainties and assumptions include, but are not limited to, general market conditions; adverse changes in reimbursement levels under Medicare and Medicaid programs; government and private party legal proceedings and investigations; adverse changes in the Medicare payment cap limits and increases in the Company’s estimated Medicare cap contractual adjustment; declines in patient census growth; increases in inflation including inflationary increases in patient care costs; the Company’s ability to effectively implement the Company’s 2010 operations and development strategies; the Company’s ability to successfully integrate and operate acquired hospice programs; the Company’s dependence on patient referral sources and potential adverse changes in patient referral practices of those referral sources; the ability to attract and retain healthcare professionals; increases in the Company’s bad debt expense due to various factors including an increase in the volume of pre-payment reviews by the Company’s Medicare fiscal intermediaries; adverse changes in the state and federal licensure and certification laws and regulations; adverse results of regulatory surveys; delays in licensure and/or certification; cost of complying with the terms and conditions of the Company’s corporate integrity agreement; adverse changes in the competitive environment in which the Company operates; changes in state or federal income, franchise or similar tax laws and regulations; adverse impact of natural disasters; changes in the Company’s estimate of additional stock-based compensation costs; and the disclosures contained under the headings “Government Regulation and Payment Structure” in “Item 1. Business” and “Item 1A. Risk Factors” of Odyssey’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2009, and in its other filings with the Securities and Exchange Commission.  Many of these factors are beyond the ability of the Company to control or predict.  Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements, which reflect management’s views only as of the date hereof.  The Company undertakes no obligation to revise or update any of the forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained in this press release and in the presentation to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements.

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ODSY Announces Fourth Quarter and Year-End 2009 Results

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February 17, 2010

ODYSSEY HEALTHCARE, INC. AND SUBSIDIARIES

UNAUDITED SELECTED OPERATING DATA

	Three Months Ended December 31,						Year Ended December 31,
	2009			2008			2009			2008
Continuing Operations:(1)
Admissions		12,246			12,037			49,513			46,772
Discharges		12,325			12,210			49,223			46,507
Average daily census		12,427			12,357			12,380			11,510
Discharge average length of stay		83.1			82.5			82.4			84.7
Gross revenue per patient day	$	158.44		$	153.58		$	157.20		$	151.64
Medicare cap as % of gross revenue		1.1	%		1.8	%		0.6	%		1.1	%
Net revenue per patient day	$	151.65		$	147.15		$	151.91		$	146.23
Operating expense per patient day	$	133.79		$	137.63		$	135.90		$	137.56
Adjusted operating expense per patient day(2)	$	132.12		$	135.63		$	134.41		$	133.81
Bad debt expense as % of net revenue		1.5	%		1.9	%		1.7	%		1.8	%
Same-Facility:(3)
Admissions		12,089			12,037				(4)			(4)
Average daily census		12,338			12,357				(4)			(4)
Average length of stay		83.7			82.5				(4)			(4)

(1) Continuing operations excludes the operations of hospices that the Company classifies as discontinued operations.

(2) Adjusted operating expense per patient day for the three months ended December 31, 2009, excludes depreciation and amortization expenses of $1.51 and $0.16 per patient day of care, respectively.  Adjusted operating expense per patient day for the three months ended December 31, 2008, excludes ramp down and integration expenses of $0.03 and $0.18 per patient day of care, respectively, and excludes depreciation and amortization expenses of $1.61 and $0.18 per patient day of care, respectively.  Adjusted operating expense per patient day for the year ended December 31, 2009, excludes depreciation and amortization expenses of $1.40 and $0.09 per patient day of care, respectively.  Adjusted operating expense per patient day for the year ended December 31, 2008, excludes ramp down and integration expenses of $1.34 and $0.54 per patient day of care, respectively, and excludes depreciation and amortization expenses of $1.77 and $0.10 per patient day of care, respectively.

(3) Same-facility information includes Odyssey hospice programs that have been in operation for the entire period of each period presented and Medicare certified for at least 12 months.

(4) Year-ended December 31, 2009 and 2008 same-facility information has been omitted due to the lack of twelve full months of comparable data as a result of the 2008 acquisition of VistaCare and subsequent site consolidations.

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ODSY Announces Fourth Quarter and Year-End 2009 Results

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February 17, 2010

ODYSSEY HEALTHCARE, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2009			2008			2009			2008
Net patient service revenue	$	173,377		$	167,284		$	686,438		$	616,050
Operating expenses:
Direct hospice care		99,004			98,469			396,774			361,445
General and administrative – hospice care		33,437			34,114			134,335			128,718
General and administrative – support center		16,016			18,742			64,734			70,574
Provision for uncollectible accounts		2,596			3,105			11,490			10,907
Depreciation		1,728			1,827			6,333			7,437
Amortization		181			199			392			431
Income from continuing operations before other income (expense)		20,415			10,828			72,380			36,538
Other income (expense):
Interest income		95			415			479			1,968
Interest expense		(1,520	)		(2,050	)		(6,574	)		(7,430	)
		(1,425	)		(1,635	)		(6,095	)		(5,462	)
Income from continuing operations before provision for income taxes		18,990			9,193			66,285			31,076
Provision for income taxes		7,087			3,302			24,583			11,141
Income from continuing operations		11,903			5,891			41,702			19,935
Income (loss) from discontinued operations, net of tax		64			(395	)		(498	)		(5,252	)
Net income		11,967			5,496			41,204			14,683
Less: Net income attributable to noncontrolling interests		196			142			613			257
Net income attributable to Odyssey stockholders	$	11,771		$	5,354		$	40,591		$	14,426
Income (loss) per common share:
Basic:
Continuing operations attributable to Odyssey stockholders	$	0.35		$	0.18		$	1.25		$	0.60
Discontinued operations attributable to Odyssey stockholders		0.01			(0.02	)		(0.02	)		(0.16	)
Net income attributable to Odyssey stockholders	$	0.36		$	0.16		$	1.23		$	0.44
Diluted:
Continuing operations attributable to Odyssey stockholders	$	0.35		$	0.17		$	1.24		$	0.59
Discontinued operations attributable to Odyssey stockholders		0.00			(0.01	)		(0.02	)		(0.16	)
Net income attributable to Odyssey stockholders	$	0.35		$	0.16		$	1.22		$	0.43
Weighted average shares outstanding:
Basic		33,098			32,724			32,935			32,674
Diluted		33,647			32,936			33,225			33,188
Amounts attributable to Odyssey stockholders:
Income from continuing operations, net of tax	$	11,707		$	5,749		$	41,089		$	19,678
Income (loss) from discontinued operations, net of tax		64			(395	)		(498	)		(5,252	)
Net income	$	11,771		$	5,354		$	40,591		$	14,426

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ODSY Announces Fourth Quarter and Year-End 2009 Results

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February 17, 2010

ODYSSEY HEALTHCARE, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	Dec. 31, 2009			Dec. 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	128,632		$	56,043
Accounts receivable from patient services, net of allowance for    uncollectible accounts of $12,462 and $9,789 at December 31, 2009 and    December 31, 2008, respectively		110,593			127,922
Income taxes receivable		352			66
Deferred tax asset		10,235			13,319
Prepaid expenses and other current assets		6,017			7,906
Assets of discontinued operations	─				2,067
Total current assets		255,829			207,323
Property and equipment, net of accumulated depreciation		20,700			22,816
Deferred loan costs, net		3,033			3,761
Long-term investments		12,425			16,659
Intangibles, net of accumulated amortization		19,251			19,644
Goodwill		191,766			189,521
Other assets		―			1,227
Total Assets	$	503,004		$	460,951
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	4,016		$	4,906
Accrued compensation		31,729			27,493
Accrued nursing home costs		18,144			16,478
Accrued Medicare cap contractual adjustments		18,798			23,719
Other accrued expenses		44,187			45,904
Current maturities of long-term debt		38,767			6,394
Total current liabilities		155,641			124,894
Long-term debt, less current maturities		76,435			116,681
Deferred tax liability		15,171			13,610
Other liabilities		4,597			3,233
Commitments and contingencies	─			─
Stockholders’ equity:
Common stock, $0.001 par value: 75,000,000 shares authorized, 38,549,833 and 38,137,834 shares issued at December 31, 2009 and December 31, 2008, respectively		39			38
Additional paid-in capital		125,716			117,732
Retained earnings		194,431			153,840
Accumulated other comprehensive loss		(1,481	)		(1,585	)
Treasury stock, at cost, 5,347,072 shares held at December 31, 2009 and December 31, 2008		(69,954	)		(69,954	)
Total Odyssey stockholders’ equity		248,751			200,071
Noncontrolling interests		2,409			2,462
Total equity		251,160			202,533
Total Liabilities and Equity	$	503,004		$	460,951

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February 17, 2010

ODYSSEY HEALTHCARE, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2009			2008
Operating Activities:
Net income attributable to Odyssey stockholders	$	40,591		$	14,426
Adjustments to reconcile net income to net cash provided by operating activities and discontinued operations:
Loss from discontinued operations, net of taxes		498			5,252
Net income attributable to noncontrolling interests		613			257
Loss on disposal of property and equipment		410			150
Depreciation and amortization		6,725			7,868
Amortization of debt issue costs		728			892
Stock-based compensation expense		5,083			4,347
Deferred tax expense (benefit)		4,588			(2,434	)
Tax benefit (expense) realized for stock option exercises		1,345			(150	)
Provision for uncollectible accounts		11,490			10,907
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		7,240			(19,926	)
Other assets		2,919			3,071
Accounts payable, accrued nursing home costs, accrued Medicare cap and other accrued expenses		765			(3,611	)
Net cash provided by operating activities and discontinued operations		82,995			21,049
Investing Activities:
Cash paid for acquisitions, net of cash acquired, and procurement of licenses		(3,035	)		(126,796	)
Cash received from the sale of hospice programs and property		1,490			1,344
Purchases of long-term investments	─				(9,000	)
Sales of short-term and long-term investments		4,100			41,693
Purchase of property and equipment, net		(6,637	)		(4,428	)
Net cash used in investing activities		(4,082	)		(97,187	)
Financing Activities:
Proceeds from issuance of common stock		3,559			46
Cash (paid) received from sale of partnership interests and partnership distributions		(665	)		893
Tax (benefit) expense realized for stock option exercises		(1,345	)		150
Payments of debt issue costs	─				(4,368	)
Proceeds from borrowings under credit facility	─				130,000
Payments on credit facility		(7,873	)		(6,926	)
Net cash (used in) provided by financing activities		(6,324	)		119,795
Net increase in cash and cash equivalents		72,589			43,657
Cash and cash equivalents, beginning of period		56,043			12,386
Cash and cash equivalents, end of period	$	128,632		$	56,043
Supplemental Cash Flow Information:
Interest paid	$	5,875		$	5,529
Income taxes paid	$	20,363		$	1,754

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February 17, 2010

ODYSSEY HEALTHCARE, INC. AND SUBSIDIARIES

UNAUDITED EBITDA RECONCILIATION

(in thousands)

This press release includes the non-GAAP financial measure of EBITDA.  The following table reconciles this non-GAAP financial measure to net income attributable to Odyssey stockholders, which Odyssey believes is the most comparable GAAP financial measure:

	Three Months Ended December 31,						Year Ended December 31,
	2009			2008			2009			2008
Net income attributable to Odyssey stockholders	$	11,771		$	5,354		$	40,591		$	14,426
Add:
Net income attributable to noncontrolling interests		196			142			613			257
(Income) loss from discontinued operations, net of taxes		(64	)		395			498			5,252
Provision for income taxes		7,087			3,302			24,583			11,141
Interest expense		1,520			2,050			6,574			7,430
Interest income		(95	)		(415	)		(479	)		(1,968	)
Depreciation		1,728			1,827			6,333			7,437
Amortization		181			199			392			431
EBITDA	$	22,324		$	12,854		$	79,105		$	44,406

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