STATEMENT REGARDING AMERICAN FLAG INCIDENT AT KINDRED HOSPITAL MANSFIELD

Louisville, KY (May 28, 2009) – Kindred Healthcare, Inc. (the "Company") (NYSE: KND) issued this statement today regarding an incident involving an American flag at Kindred Hospital Mansfield:

We are offended one of our employees took down a colleague's American flag in our Mansfield, TX hospital. It was wrong and as soon as we learned about it we took immediate action to correct the situation. At no time did anyone at Kindred Healthcare instruct anyone to take down the American flag. This was an unauthorized act of an individual employee. The flag is now proudly displayed once again, and we apologize to all who were equally offended by this unpatriotic action, including the owner of the flag. We have reprimanded the employee and let them know we don't tolerate behavior inconsistent with our Company's values.

About Kindred Healthcare

Kindred Healthcare, Inc. is a healthcare services company, based in Louisville, Kentucky, with annual revenues of over $4 billion and approximately 54,800 employees in 40 states. At March 31, 2009, Kindred through its subsidiaries provided healthcare services in 661 locations, including 82 long-term acute care hospitals, 228 skilled nursing centers and a contract rehabilitation services business, Peoplefirst rehabilitation services, which served 351 non-affiliated facilities. Ranked first in Fortune magazine’s Most Admired Companies “Health Care: Medical Facilities” category, 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.

CONTACT:
Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296