8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): November 17, 2010

REHABCARE GROUP, INC.

(Exact name of Company as specified in its charter)

Delaware	001-14655	51-0265872
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

7733 Forsyth Boulevard
Suite 2300
St. Louis, Missouri	63105
(Address of principal executive offices)	(Zip Code)

(800) 677-1238

(Company's telephone number, including area code)

Not applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

Beginning on November 17, 2010, RehabCare executives will make presentations at investor conferences to analysts and in other forums using the slides as included in this Form 8-K as Exhibit 99.  Presentations will be made using these slides, or modifications thereof, in connection with other presentations in the foreseeable future.

Information contained in this presentation is an overview and intended to be considered in the context of RehabCare's SEC filings and all other publicly disclosed information. We undertake no duty or obligation to update or revise this information. However, we may update the presentation periodically in a Form 8-K filing.

Forward-looking statements have been provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the Company’s current expectations and could be affected by numerous factors, risks and uncertainties discussed in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K.  Do not rely on forward looking statements as the Company cannot predict or control many of the factors that ultimately may affect the Company’s ability to achieve the results estimated.  The Company makes no promise to update any forward looking statements whether as a result of changes in underlying factors, n ew information, future events or otherwise.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits - See exhibit index

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: November 17, 2010

REHABCARE GROUP, INC.

 By: /s/ Jay W. Shreiner                                  

 Name: Jay W. Shreiner

 Title: Executive Vice President and

 Chief Financial Officer

EXHIBIT INDEX

Exhibit No. Description

99 Investor Relations Presentation in use beginning November 17, 2010

EX-99

Investor Presentation

Third Quarter 2010

Exhibit 99

Investment Highlights

1

nLeading provider of post-acute care

nLargest contract manager of rehabilitation services

nFourth largest post-acute hospital operator, third largest long-term acute care hospital provider

nLarge, growing and highly fragmented market provides multiple organic and acquisitive
growth opportunities

nPositioned to leverage continuum capabilities and real-time technology under
healthcare reform

nStrong financial model

nDiversified business lines

nTrack record of strong earnings

and operating cash flow

nExperienced management team with successful track record of adapting to change

13%

Patient Discharge Destination1

LTACH / SNF

IRF

No post-
acute
care

Hospice/Home Health

65%

Acute care
hospital

2

Post-Acute Market Overview

Medicare Post-Acute Spending (in billions)

$

nPositive demographic trends, with first wave of Baby Boomers entering Medicare
in 2011; ≈ 72% of RehabCare patients are Medicare

nMedicare expenditures for post-acute services (excluding home health) projected
to increase 96% from 2009 to 2021

Projected3

Actual2

LTACHs = Long-Term Acute Care Hospitals

IRFs = Inpatient Rehabilitation Facilities

SNFs = Skilled Nursing Facilities

1“Examining Post-Acute Care Relationships in an Integrated Hospital System,” Dept. of
Health and Human Services, Feb. 2009

2MedPAC Data Book, June 2010; does not include Home Health or Medicare Advantage

3Avalere Health LLC, Apr. 2009; does not include Home Health or Medicare Advantage

Division Overviews

Skilled Nursing

Rehabilitation Services

n$514 mm - 39% ofpro forma
revenue

n1,131 SNF/long-term care
programs in 38states

n8.2 mm annual patient visits

nPolaris Group - consulting for
long-term care facilities

nVTA Management Services -
therapy and nurse staffing for
New York

$1.3 billion pro forma1 operating revenues for LTM 9/30/10

Hospital

Rehabilitation Services

n$179 mm - 14% of pro forma
revenue

n147 hospital-based programs
in 34 states

n42,000 IRF discharges/year

n1.1 mm annual outpatient
visits

n$629 mm - 47% of pro forma
revenue

n29 LTACHs, 6 IRFs; 13 states

n23 FS LTACHs, 6 HIHs; 4 FS
IRFs, 2 HIHs

n1,605 licensed LTACH beds;
243 IRF beds

n431,000 annual patient days

FS = Freestanding

HIH = Hospital in Hospital

Hospital Division

3

1Reflects acquisition of Triumph HealthCare on Nov. 24, 2009

Hospital Division
Overview

Competitive Landscape

1MedPAC, Mar. 2010 Report to the Congress

2Includes acquisition of five LTACHs from Vista Healthcare completed on Nov. 1, 2010

nOwns and operates 35 LTACHs and IRFs

nLTACHs represent the earliest discharge option from the short-term acute care setting
for medically complex patients; IRFs provide intensive rehabilitation with a ≈ 75%
return to community rate

nRehabCare pursues joint venture hospital partnerships (nine currently, representing
15 locations) with market-leading acute care providers and physician groups, in
addition to our wholly owned facilities

Market Size1: 221 IRFs

(FS and HIHs)

Market Size1: 386 LTACHs

IRFs

LTACHs

4

Source: Information available from public filings or
company websites

117

100

882

35

20

19

15

15

18

14

Adjusted Revenue¹($mm)

5

Hospital Division
Performance

1See Appendix for Reconciliation to GAAP

² Excludes a $1.7 mm unfavorable cost report adjustment in Q2’10

Note:Triumph acquired on Nov. 24, 2009

nCompleted integration of Triumph; 2011 annualized run rate of synergies expected to be
upper end of $5 to $7 mm

nVolumes grew with the addition of new clinical programs and costs/patient day declined

nLegacy RehabCare hospitals improved same store operating performance by $2.4 mm²
sequentially; now expected to achieve positive operating earnings for full year 2010

nSequential decline in Triumph EBITDA due to operational issues at four hospitals, which
should improve by year end, in addition to slower progress with start-ups in Philadelphia and
Houston Heights

nFocused on census development and expense control to drive margin expansion

Adjusted EBITDA¹ ($mm)

nContinue to improve margins across division

nExpand post-acute services in key markets

nEntering 40-bed IRF joint venture with Saint Joseph Regional Medical Center (South Bend, IN) -
closing Q1 ’11

nExchanging 60-bed IRF (Miami, FL) for Select 70-bed LTACH (Northwest IN) - closing Jan. 1,
2011

nBuilding 46-bed IRF (Northeast Houston, TX) - opening beginning of 2012

nEvaluating several projects that develop our IRF services in continuum markets

nComplete two planned expansion projects

nThe Specialty Hospital (Rome, GA) - opening Q1 ’11

nCentral Texas Rehabilitation Hospital (Austin, TX) - opening Q1 ’12

nInvest in quality upgrades and new clinical programs and services

Hospital Division
Growth strategy

7

nCombined revenue of $163 - $168 mm

nEBITDA margin of ≈ 14% driven by sequential improvement in Triumph hospitals

nBeginning in 2011, reported results and outlook will be for the consolidated division
rather than legacy groups and on a year-over-year basis

Hospital Division
Financial and regulatory outlook

8

Financial (Q4 ’10)

Regulatory

nRate Year (RY) 2011 rule for LTACHs, effective Oct. 1, 2010, results in a negative 1%
adjustment for our LTACHs

nIRF rule increases payments by a net 2.4% for our owned IRFs

nHealthcare reform legislation extended LTACH provisions contained in the Medicare,
Medicaid and SCHIP Extension Act (MMSEA) through the end of 2012 (see Appendix for
summary of healthcare reform impact)

Skilled Nursing Rehabilitation Services
Division overview

nManages 1,131 rehab programs for SNFs

nEach Medicare-certified SNF is required to provide physical, speech and occupational therapy,
but many lack the know-how and/or scale to effectively manage a program

nRehabCare provides a compelling value proposition to our SNF partners

nAccess to advanced technology platform

nBroader array of clinical programming

nBetter access to scarce therapist labor pool

nReimbursement expertise and denials management

Source: Information available from public filings or from company websites

¹Source: MedPAC Report to Congress, Mar. 2010

Competitive Landscape — # of facilities served

Self-

operated

11,000+

1,131

1,000

900

650

471

450

300

179

Market Size1: 15,000+
Medicare-certified SNFs

9

Skilled Nursing Rehabilitation Services
Performance

Note: Includes Symphony HealthCare acquisition as of July 1, 2006

1Same store analysis does not include Symphony

% Margin:1.7%5.6%7.6%7.9%8.2%

Operating Earnings ($ mm)

10

nAchieved 7.9% operating earnings margin while preparing for Oct. 1 regulatory
changes and implementing new information system technologies

nReduced concurrent therapy utilization to 5% (less than 1% at end of Oct.)

nSales were strong, but closures were ahead of projections

nSame store revenue has begun to moderate as smaller, less profitable units have been
culled from the portfolio and benefit of IRF 60% Rule to patient mix has been realized

YOY growth:24.4%5.6%8.5%9.2%4.8%

Same store:7.1%112.4%8.8%10.3%1.7%

Revenue ($ mm)

4.8%

Skilled Nursing Rehabilitation Services
Advanced technology platform

11

nRolling out iTouch technology and upgraded therapy
management platform to all programs by the end of
Q1 ’11

nIncreases speed and accuracy of data input to
maximize therapist productivity, reduce billing errors
and subsequent denials

nTracks real-time patient outcome data, including
discharge location and hospital readmissions

nResource Utilization Group (RUG) planner ensures
appropriate RUG category placement and payment

nBenchmarking reports provide national comparative
data on key metrics

nCollaboration with Apple enables data sharing across
the post-acute continuum, providing the basis for
more evidence-based care

http://www.apple.com/ipad/business/profiles/rehabcare/

Skilled Nursing Rehabilitation Services
Financial and regulatory outlook

12

n5.5% - 6.5% operating earnings margin, which reflects the estimated impact of:

nRegulatory changes

nConcurrent therapy

nMinimum Data Set 3.0 / RUGs IV

nRollout of new technologies

nRelatively flat unit growth

Financial (Q4 ’10)

Regulatory

nSNF payment update provides a net 1.7% increase in RY2011

nBeginning in 2011, Multiple Procedure Payment Reduction rule will cut reimbursement
for Part B therapy services by ≈ $5 to $6 mm annually

nNet impact after mitigation expected to be ≈$2 to $3 mm annually

nPart B therapy cap exceptions process scheduled to expire Dec. 31, 2010; 23%
physician pay cut scheduled to go into effect Dec. 1

IRF CompetitiveLandscape

Have IRF

No IRF

nManages 147 hospital-based IRFs, subacute and outpatient therapy programs on a
contract basis, providing our partners with:

nImproved internal patient flow

nAbility to attract ≈ 30% admissions from external sources

nSuccessful clinical outcomes and broader clinical programming (brain, stroke, spinal dysfunction)

nRegulatory compliance (60% rule, Recovery Audit Contractor review, 3-hour rule)

nRecruiting and labor management

3,859¹short-term acute
care hospitals

190 outsourced

Hospital Rehabilitation Services
Division overview

Market Size²: 981 hospital
- -based IRFs

Source: Information available from public filings, company
websites and RehabCare estimates

1American Hospital Directory

²MedPAC Mar. 2010 Report to Congress

13

14

Hospital Rehabilitation Services
Performance

nInpatient and outpatient same store revenues improved 3.3% and 8%, respectively,
year over year

nBetter leveraging of SG&A resulted in an 18.7% operating earnings margin

nEnded quarter with six signed but unopened contracts, including three IRFs

¹Includes $1.2 mm pretax charge from a bad debt write-down related to an
outpatient transaction

YOY growth:(8.7%)0.9%7.6%9.2%0.3%

IRFs:107113106110106

Operating Earnings ($ mm)

% Margin:14.0%13.3%16.6%16.6%17.5%

1

Revenue ($ mm)

0.3%

5.4%

Hospital Rehabilitation Services
Growth strategy and outlook

15

n16% - 18% operating earnings margin

n2% - 4% year-over-year growth in IRF same store discharges

nNet one to two new IRF programs

nIncrease market share through:

nTargeted market focus - e.g., small systems, critical
access hospitals

nProduct development - e.g., centers of excellence

nSecond product sales

nInvest in enabling technology

nElectronic pre-screen to increase speed of admissions,
drive volumes

nPoint-of-service technology to improve productivity

nIntegration with eRehabData for national benchmarking
capabilities

nOpportunity to upsell therapy management services

Growth Strategy

Outlook (Q4 ’10)

Revenue ($ mm)

¹

Net Earnings ($ mm)

EPS:$0.73 3$1.05 4$ 1.22 5$1.24 5$1.84

16

Consolidated Financial Summary

1RehabCare 2009 historical includes $39.7 mm in revenue generated by Triumph

2See Appendix for Reconciliation to GAAP

3Includes $0.17 per diluted share impairment charge on an intangible asset

4Includes $0.09 per diluted share in charges related to a bad debt write-down of an
outpatient transaction and cancellation of a planned acquisition and development
project

5Includes transaction and severance related charges of $0.07 in Q3 ’09 and $0.41 per
diluted share in 2009

Adjusted EBITDA² ($mm)

17

Consolidated Balance Sheet

nCash flow from operations was $68.7 mm for nine months ended Sept. 30, 2010
compared with $46.6 mm in the prior year period

nDays sales outstanding was 61.9 days at Sept. 30 compared to 62.1 days at June 30

nExpect DSO of approximately 60 to 63 days

nCapital expenditures anticipated to be $9 mm in Q4 ’10, consisting of information
system investments, expansion projects and maintenance

nPaying down debt is a priority before next significant acquisition

Cash and Cash Equivalents

Total Assets

Total Debt

Stockholders’ Equity

Noncontrolling Interests

Percent of Debt to Total Capital¹

($mm)

$22.5

1,122.5

413.2

484.5

20.9

45%

9/30/10

1Total capital represents the sum of debt, stockholders’ equity and noncontrolling interests

18

Forward-looking statements have been provided pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such statements
are based on the Company’s current expectations and could be affected by
numerous factors, risks and uncertainties discussed in the Company’s filings with
the Securities and Exchange Commission, including its most recent report on
Form 10-K, subsequent reports on Form 10-Q and current reports on Form 8-K.
Do not rely on forward looking statements as the Company cannot predict or
control many factors that affect its ability to achieve the results estimated.The
Company makes no promise to update any forward looking statements whether as
a result of changes in underlying factors, new information, future events or
otherwise.

Appendix

19

Impact of Healthcare Reform

nExtends LTACH provisions of MMSEA through Dec 2012

nMaintains existing status related to 25% Rule and short-stay outliers

nDelays one-time budget neutrality adjustment (estimated at 3.75%)

nContinues moratorium on new LTACH beds while facility criteria is established

nExtends auto exception process for Part B therapy caps through Dec. 31, 2010

nDelays implementation of RUGs IV payment system until Oct. 1, 2011

nEstablishes reductions in market basket updates for IRFs and LTACHs

nProductivity (negative) adjustments for SNFs, IRFs and LTACHs beginning in 2012

nProhibits physician ownership of hospitals, effective Dec. 31, 2010, and creates
new transparency, reporting and expansion requirements for “grandfathered”
hospitals

20

	Apr. 1, 2010	RY 2011	RY 2012-13	RY 2014	RY 2015-16	RY 2017-19
IRF	0.25	0.25	0.10	0.30	0.20	0.75
LTACH	0.25	0.50	0.10	0.30	0.20	0.75

Impact of Healthcare Reform

21

nBeginning in 2012, allows providers organized as Accountable Care Organizations
that voluntarily meet quality thresholds to share in cost savings achieved in
Medicare program

nEstablishes a national pilot program by 2013 to study effectiveness of bundled
payment system for hospital+physician+post-acute services delivered three days
prior to hospitalization through 30 days post-discharge

nContinuing Care Hospital (CCH) is one of the suggested models to study under
required Innovation Center

nCCH is a post-acute, capitative hospital model that would serve complex rehabilitation
and medical patients by providing patient-specific levels of care for a 30-day period

nIn 2015, establishes Medicare Independent Payment Advisory Board (IPAB); IRFs
and LTACHs exempt from any binding proposals of IPAB

22

Primary Post-Acute Settings
Overview

	Long-Term Acute Care Hospitals	Skilled Nursing Facilities	Inpatient Rehab Facilities
Medicare Spending 2009	$4.9 billion	$25.5 billion (est. $6 billion rehab)	$5.7 billion
Patients Served 2008	130,869 Medicare discharges	2.6 million Medicare admissions	370,048 Medicare discharges
Type of Patient	High acuity	Low to moderate acuity, may require some rehab	High acuity, requires extensive rehab (min 3 hrs/day)
Avg. Length of Stay	At least 25 days (Medicare patients)	27 days	13.2 days
Medicare Reimbursement	LTACH PPS - Receive a single payment when Medicare beneficiary is discharged for all services rendered	SNF PPS - Receive a per diem payment under both Medicare Part A and state Medicaid programs	IRF PPS- Receive a single payment when Medicare beneficiary is discharged for all services rendered
Medicare Requirements	•Average length of stay of all Medicare patients must be >25 days •25% rule: no more than 25% of patients may be referred from a single source (HIHs fixed at 50% through 2012, no cap on FS or co-located) •Moratorium on new LTACH beds until 2013	Medicare covers up to 100 days of SNF care following an acute hospital stay of at least 3 days	60% Rule: 60% of patients must satisfy one of 13 defined conditions

Source: MedPAC

FS = Freestanding

HIH = Hospital in Hospital

Q3 ’10 and Q2 ’10 Adjusted EBITDA
Reconciliations

Q2 ’10 Adjusted EBITDA Reconciliation

Q3 ’10 Adjusted EBITDA Reconciliation

Q1 ’10 and Q4 ’09 Adjusted EBITDA
Reconciliation

Q1 ’10 Adjusted EBITDA Reconciliation

Q4 ’09 Adjusted EBITDA Reconciliation

Q3 ’09 Adjusted EBITDA Reconciliation

25

Q3 ’09 Adjusted EBITDA Reconciliation