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LifeCare Holdings, Inc. Announces Year-End Results
Date:3/31/2009

PLANO, Texas, March 31 /PRNewswire-FirstCall/ -- LifeCare Holdings, Inc. (the "Company") today announced its operating results for the three months and year ended December 31, 2008.

Three Months Ended December 31, 2008

Net Revenues

Our net patient service revenue of $94.2 million for the three months ended December 31, 2008, increased by $14.5 million as compared to the same period in 2007 while patient days were unchanged. During the three months ended December 31, 2008, we recorded a $2.5 million favorable adjustment to net patient service revenues associated with changes in estimates on previously filed Medicare cost reports, as compared to a charge of $0.4 million in the 2007 period. Additionally, we recorded a $2.0 million favorable adjustment to net patient service revenue during the fourth quarter of 2008 related to revised estimates on certain patient accounts where amounts previously collected exceeded amounts originally recorded as revenue.

Excluding these adjustments, net patient service revenue, on a per patient day basis, was $1,561 for the 2008 period and $1,395 for the 2007 period. This 11.9% increase on a per patient day basis was primarily the result of marginal increases implemented in the annual regulatory updates by the Centers for Medicare and Medicaid Services ("CMS") during 2008, annual inflationary increases in our standard charge rates and certain of our contracts with commercial payors, the treatment of higher acuity patients during the 2008 period, and an increase in the percentage of our revenues generated from commercial payors.

Expenses

Total expenses decreased by $15.3 million to $102.1 million for the three months ended December 31, 2008 as compared to $117.4 million for the comparable period in 2007. Included in expenses for the 2008 and 2007 periods are impairment charges of $18
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SOURCE LifeCare Holdings, Inc.
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