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): August 23, 2010

REHABCARE GROUP, INC.

(Exact name of Company as specified in its charter)

Delaware	001-14655	51-0265872
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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 August 23, 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: August 23, 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 August 23, 2010

EX-99

Investor Presentation

Second 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 providing multiple growth opportunities

nOrganic

nAcquisitions

nPositioned to leverage continuum capabilities under healthcare reform (e.g., bundled
payment system)

nStrong financial model

nDiversified business lines

nTrack record of strong earnings

and operating cash flow

nStrong 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%

2

Post-Acute Market Overview

Medicare Post-Acute Spending (in billions)

$

Projected3

Actual2

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

LTACHs = Long-Term Acute Care Hospitals

IRFs = Inpatient Rehabilitation Facilities

SNFs = Skilled Nursing Facilities

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

Acute care
hospital

Division Overviews

Skilled Nursing

Rehabilitation Services

$1.3 billion pro forma1 operating revenues for LTM 6/30/10

Hospital

Rehabilitation Services

FS = Freestanding

HIH = Hospital in Hospital

Hospital Division

3

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

n$611 mm - 47% of pro forma
revenue

n29 LTACHs, 6 IRFs; 13 states

n20 FS LTACHs, 9 HIHs; 4 FS
IRFs, 2 HIHs

n1,605 licensed LTACH beds;
243 IRF beds

n420,000 annual patient days

n$507 mm - 39% ofpro forma
revenue

n1,115 SNF/long-term care
programs in 37states

n8.1 mm annual patient visits

nPolaris Group - consulting for
long-term care facilities

nVTA Management Services -
therapy and nurse staffing for
New York

n$178 mm - 14% of pro forma
revenue

n148 hospital-based programs
in 34 states

n42,000 IRF discharges/year

n1.2 mm annual outpatient
visits

Hospital Division
Overview

Competitive Landscape

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 its wholly owned facilities

Market Size1: 221 IRFs

(Freestanding and HIHs)

Market Size1: 386 LTACHs

IRFs

LTACHs

4

Source: Information available from public filings or
company websites

98

952

83

35

232

20

18

15

19

14

1MedPAC, Mar. 2010 Report to the Congress

2Pending completion of its acquisition of Regency Hosp. Co., Select
Medical will be largest post-acute hospital operator

Hospital Division
Performance

Hospital Division Financial Data

5

nLegacy hospitals reached breakeven
operating earnings run rate at end of
Q2’10; on track for breakeven operating
earnings for FY2010

nLegacy LTACHs experiencing significant
improvements under Triumph’s operating
model and leadership

nTriumph integration and expected
synergies ahead of plan

nSoft acute care volumes in key markets
resulted in sequential decline in
Triumph’s EBITDA margin from 17.7%¹ in
Q1’10 to 16.7%¹ in Q2’10

nTriumph expected to achieve historical
EBITDA margins by early 2011

($ mm)	Q1’10	Q2’10
Patient days	106,393	108,031
Adjusted Revenue¹	$ 157.8	$ 160.1
Adjusted EBITDA margin1	13.1%	12.3%
Legacy hospital adj. EBITDA margin1	1.6%	2.5%
Triumph adj. EBITDA margin1	17.7%	16.7%

1 See Appendix for Reconciliation to GAAP

Note:Comparisons to prior year periods are not meaningful due to the Triumph
acquisition on Nov. 24, 2009

Hospital Division
Growth strategy

6

nContinue to achieve margin expansion in legacy hospitals under Triumph’s management

nDevelop IRF opportunities in key markets

nComplete two planned expansion projects

nThe Specialty Hospital (Rome, GA) - opening Q2’11

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

nInvest in quality upgrades to several hospitals to drive volume growth

nBuild out Intensive Care Units / High Observation Units

nExpand ancillary services (CT scanners, hyperbaric chambers, special procedures rooms)

nRoll out new clinical programs and services

nExpect FY2010 revenue of $640 - $665 mm and EBITDA of $85 - $95 mm

nAnticipate continued soft acute care census in the second half of 2010

nReaffirm breakeven operating earnings for 13 legacy hospitals for FY2010

nTriumph hospitals expected to achieve around 17% EBITDA margins for FY2010, with a
return to historical EBITDA margins beginning in 2011

nNet income attributable to noncontrolling interests expected to approximate $2.5 million
for FY2010

Hospital Division
Financial and regulatory outlook

7

Financial

Regulatory

nRate Year (RY) 2011 rule for LTACHs, published on July 30, will result in an estimated
negative 1% adjustment for our LTACHs

nThe Centers for Medicare and Medicaid Services (CMS) self-executing rule, released on
July 16, will increase payments by an estimated net 2.4% for our owned IRFs

nPatient Protection and Affordable Care Act (PPACA) extended LTACH provisions
contained in the 2007 Medicare, Medicaid and SCHIP Extension Act (MMSEA) through
the end of 2012 (see Appendix for summary of PPACA impact)

Skilled Nursing Rehabilitation Services
Division overview

nManages 1,115 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+

1,115

1,000

900

633

482

450

300

188

Market Size1: 15,000+
Medicare-certified SNFs

8

300

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%8.3%

Operating Earnings ($ mm)

9

YOY growth:24.4%5.6%8.5%8.8%4.2%

Same store:7.1%112.4%8.8%10.2%1.2%

nAchieved 8.5% operating earnings margin in Q2’10, while preparing for regulatory
changes

nSame store revenue has begun to moderate following several years of exceptional
growth

nNet unit growth is expected to resume in the second half of 2010

Revenue ($ mm)

4.2%

Skilled Nursing Rehabilitation Services
Advanced technology platform

10

nRolling out next generation point-of-service
(iTouch) technology and upgraded therapy
management platform to all programs by year
end 2010

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

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

nBenchmarking reports provide national
comparative data and ability to track common
metrics across venues of care

Skilled Nursing Rehabilitation Services
Financial and regulatory outlook

11

nExpect 7% - 8% operating earnings margins for FY2010, driven by low to mid-single
digit year-over-year same store revenue growth

nAnticipate an operating earnings margin of 5.5% to 6.5% in Q4’10 given:

§Regulatory changes

§Rollout of new technologies

§Pricing pressures

§Wage rate increases during the year

nExpect 50 to 75 net new units in 2010

Financial

Regulatory

nNew concurrent therapy rules, MDS 3.0 and RUGs IV payment rates effective Oct. 1

nSNF payment update, released on July 16, provides a net 1.7% increase in RY2011

nProposed Multiple Procedure Payment Reduction (MPPR) rule would cut reimbursement
for Part B therapy services by ≈ 10% beginning in 2011

nEstimated, unmitigated annual impact to our operating earnings would be $17 - $18 mm;
expect to mitigate significant fraction of impact

nIssued position paper, available at http://www.rehabcare.com/about/news/index.html

nPPACA extended Part B therapy cap exceptions process through 2010; Affordable
Healthcare for Americans Act delayed a 21% physician pay cut through Nov. 30, 2010

IRF CompetitiveLandscape

Have IRF

No IRF

nManages 148 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, RAC, 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

12

13

Hospital Rehabilitation Services
Performance

nImproved same store revenues and discharges in inpatient and outpatient segments

nBetter leveraging of SG&A resulted in a 17.6% operating earnings margin in Q2’10

nEnded quarter with net three IRF and one outpatient openings, two signed but
unopened contracts

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%9.6%(0.2%)

IRFs:107113106111106

Operating Earnings ($ mm)

% Margin:14.0%13.3%16.6%15.8%16.8%

1

Revenue ($ mm)

(0.2%)

6.0%

Hospital Rehabilitation Services
Growth strategy and outlook

14

nExpect 16% - 18% operating earnings margin for FY2010

nAnticipate 2 - 4% year-over-year growth in IRF same store discharges for
FY2010

nNet one to two new IRF programs expected in second half of 2010

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

nProvides opportunity to upsell therapy management
services

Growth Strategy

Outlook

Revenue ($ mm)

¹

Net Earnings ($ mm)

EPS:$0.73 2$1.05 3$ 1.22 4$0.87$1.20

15

Consolidated Financial Summary

2Includes $0.17 per diluted share impairment charge on an intangible asset

3Includes $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

4Includes transaction and severance related charges related to Triumph of $0.38 per
diluted share

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

16

Consolidated Balance Sheet

nCash flow from operations was $25.8 mm for six months ended June 30, 2010
compared with $27.1 mm in the prior year period

nDays sales outstanding was 62.1 days at June 30, 2010 compared to 61.8 days at Mar. 31, 2010

nExpect continued strong operating cash flow with DSO of approximately 60 - 63 days

nCapital expenditures anticipated to be $32 mm in 2010, consisting of $12.5 mm of
information system investments and $19.5 mm in 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)

$18.0

1,126.8

444.0

468.0

19.1

48%

6/30/10

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

17

Safe Harbor

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.

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.he 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

18

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

19

	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

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

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

20

21

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, at least 25 days	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	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	•Patients must have an average length of stay of >25 days •25% rule: no more than 25% of patients may be referred from a single source (fixed at 50% through 2012) •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

Q2’10 and Q1’10 Adjusted EBITDA
Reconciliations

Q1’10 Adjusted EBITDA Reconciliation

Q2’10 Adjusted EBITDA Reconciliation