Select Medical

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K 
☒
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2024 
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to                                               
Commission file numbers: 001-34465
SELECT MEDICAL HOLDINGS CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware
20-1764048
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification Number)
4714 Gettysburg Road, P.O. Box 2034 
Mechanicsburg, PA, 17055 
(Address of Principal Executive Offices and Zip Code)
(717) 972-1100 
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, $0.001 par value per share
SEM
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ☒  No ☐ 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 
twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 
of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit such files). Yes  ☒  No ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial 
accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting 
under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction 
of an error to previously held financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the 
registrant’s executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐  No ☒
The aggregate market value of the registrant’s voting stock held by non-affiliates at June 30, 2024 (the last business day of the registrant’s most recently completed second fiscal 
quarter) was approximately $3,622,619,762, based on the closing price per share of common stock on that date of $35.06 as reported on the New York Stock Exchange. Shares of common 
stock known by the registrant to be beneficially owned by directors and officers of the registrant subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 
1934 are not included in the computation. The registrant, however, has made no determination that such persons are “affiliates” within the meaning of Rule 12b-2 under the Securities Exchange 
Act of 1934.
 As of February 1, 2025, the number of shares of Holdings’ Common Stock, $0.001 par value, outstanding was 128,962,850.
Unless the context indicates otherwise, any reference in this report to “Holdings” refers to Select Medical Holdings Corporation and any reference to “Select” refers to Select 
Medical Corporation, the wholly owned operating subsidiary of Holdings, and any of Select’s subsidiaries. Any reference to “Concentra” refers to Concentra Group Holdings Parent, LLC 
(“Concentra Group Holdings Parent”) and its subsidiaries, including Concentra Inc. References to the “Company,” “we,” “us,” and “our” refer collectively to Holdings, Select, and Concentra.
Documents Incorporated by Reference
Listed hereunder are the documents, any portions of which are incorporated by reference and the Parts of this Form 10-K into which such portions are incorporated:
1. 
The registrant's definitive proxy statement for use in connection with the 2025 Annual Meeting of Stockholders to be held on or about April 30, 2025 to be filed within 120 days 
after the registrant’s fiscal year ended December 31, 2024, portions of which are incorporated by reference into Part III of this Form 10-K. Such definitive proxy statement, except for the parts 
therein which have been specifically incorporated by reference, should not be deemed “filed” for the purposes of this form 10-K.

SELECT MEDICAL HOLDINGS CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2024 
Item
 
 
Page
 
PART I
 
Forward-Looking Statements
1
Item 1.
Business. 
3
Item 1A.
Risk Factors. 
34
Item 1B.
Unresolved Staff Comments. 
48
Item 1C.
Cybersecurity.
45
Item 2.
Properties. 
51
Item 3.
Legal Proceedings. 
52
Item 4.
Mine Safety Disclosures. 
52
 
PART II
 
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities. 
53
Item 6.
[Reserved]
56
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations. 
57
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk. 
80
Item 8.
Financial Statements and Supplementary Data. 
80
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 
80
Item 9A.
Controls and Procedures. 
80
Item 9B.
Other Information. 
81
 
PART III
 
Item 10.
Directors, Executive Officers and Corporate Governance. 
82
Item 11.
Executive Compensation. 
82
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 
82
Item 13.
Certain Relationships, Related Transactions and Director Independence. 
82
Item 14.
Principal Accountant Fees and Services
83
 
PART IV
 
Item 15.
Exhibits and Financial Statement Schedules. 
84
Item 16.
Form 10-K Summary. 
89
Signatures
90
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PART I
Forward-Looking Statements
This annual report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. 
Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. 
Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” 
“should,” “believe,” “expect,” “anticipate,” “plan,” “target,” “estimate,” “project,” “intend,” and similar expressions. These statements 
include, among others, statements regarding our expected business outlook, anticipated financial and operating results, including our 
business strategy and means to implement our strategy, our objectives, the amount and timing of capital expenditures, the likelihood of 
our success in expanding our business, financing plans, budgets, working capital needs, and sources of liquidity.
Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our 
management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to 
the forward-looking statements include, among others, assumptions regarding our services, the expansion of our services, competitive 
conditions, and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve 
known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-
looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the 
following:
•
changes in government reimbursement for our services and/or new payment policies may result in a reduction in revenue, an 
increase in costs, and a reduction in profitability;
•
adverse economic conditions including an inflationary environment could cause us to continue to experience increases in the 
prices of labor and other costs of doing business resulting in a negative impact on our business, operating results, cash flows, 
and financial condition;
•
shortages in qualified nurses, therapists, physicians, or other licensed providers, and/or the inability to attract or retain 
qualified healthcare professionals could limit our ability to staff our facilities;
•
shortages in qualified health professionals could cause us to increase our dependence on contract labor, increase our efforts 
to recruit and train new employees, and expand upon our initiatives to retain existing staff, which could increase our 
operating costs significantly;
•
the negative impact of public threats such as a global pandemic or widespread outbreak of an infectious disease similar to the 
COVID-19 pandemic;
•
the failure of our Medicare-certified long term care hospitals or inpatient rehabilitation facilities to maintain their Medicare 
certifications may cause our revenue and profitability to decline;
•
the failure of our Medicare-certified long term care hospitals and inpatient rehabilitation facilities operated as “hospitals 
within hospitals” to qualify as hospitals separate from their host hospitals may cause our revenue and profitability to decline;
•
a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational 
harm and increased costs;
•
acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources, or expose us to unforeseen 
liabilities;
•
our plans and expectations related to our acquisitions and our ability to realize anticipated synergies;
•
failure to complete or achieve some or all the expected benefits of the separation of Concentra; 
•
private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability;
•
the failure to maintain established relationships with the physicians in the areas we serve could reduce our revenue and 
profitability;
•
competition may limit our ability to grow and result in a decrease in our revenue and profitability;
•
the loss of key members of our management team could significantly disrupt our operations;
•
the effect of claims asserted against us could subject us to substantial uninsured liabilities; 
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•
a security breach of our or our third-party vendors’ information technology systems may subject us to potential legal and 
reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 or the 
Health Information Technology for Economic and Clinical Health Act; and
•
other factors discussed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including 
factors discussed under the heading “Risk Factors” of this annual report on Form 10-K.
Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, 
we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, 
future events, or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the 
expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.
Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our 
policy to disclose to securities analysts any material non-public information or other confidential commercial information. 
Accordingly, stockholders should not assume that we agree with any statement or report issued by any securities analyst irrespective 
of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts 
or opinions, such reports are not the responsibility of the Company.
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Item 1.    Business.
Overview
We began operations in 1997 and, based on the number of facilities, are one of the largest operators of critical illness 
recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States. As of December 31, 2024, 
we had operations in 40 states and the District of Columbia. As of December 31, 2024, we operated 104 critical illness recovery 
hospitals in 29 states, 35 rehabilitation hospitals in 14 states, and 1,914 outpatient rehabilitation clinics in 39 states and the 
District of Columbia.
On July 26, 2024, Concentra Group Holdings Parent (“Concentra”), a then wholly-owned subsidiary of Select, completed 
an initial public offering (“IPO”) of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public 
offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of 
$29.1 million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of Concentra’s 
common stock for net proceeds of $16.7 million after deducting discounts and commission of $1.0 million. Concentra shares 
began trading on the New York Stock Exchange under the symbol “CON” on July 25, 2024. 
After the closing of the IPO and underwriters option, Select owned 81.74% of the total outstanding shares of Concentra 
common stock. On November 25, 2024, Select made a tax-free distribution to its stockholders of all of its remaining equity 
interest in Concentra (“the Distribution”). Holders of the Company’s common stock received 0.806971 shares of Concentra 
common stock for each outstanding share of the Company’s common stock they owned as of November 18, 2024 (the “Record 
Date”). Following the completion of the distribution, the Company no longer owns any shares of Concentra common stock. The 
historical results of Concentra (which previously represented the Concentra business segment) are reflected as discontinued 
operations in the Company’s Consolidated Financial Statements through the date of the distribution.
Following the completion of the distribution of Concentra in November 2024, we now manage our Company through 
three business segments: our critical illness recovery hospital segment, our rehabilitation hospital segment, and our outpatient 
rehabilitation segment. We had revenue of $5,187.1 million for the year ended December 31, 2024. Of this total, we earned 
approximately 47% of our revenue from our critical illness recovery hospital segment, approximately 21% from our 
rehabilitation hospital segment, and approximately 24% from our outpatient rehabilitation segment. We also recognized other 
revenue associated with employee leasing services provided to the Company’s non-consolidating subsidiaries.
Our critical illness recovery hospital segment consists of hospitals designed to serve the needs of patients recovering from 
critical illnesses, often with complex medical needs, and our rehabilitation hospital segment consists of hospitals designed to 
serve patients that require intensive physical rehabilitation care. Patients are typically admitted to our critical illness recovery 
hospitals and rehabilitation hospitals from general acute care hospitals. Our outpatient rehabilitation segment consists of clinics 
that provide physical, occupational, and speech rehabilitation services. See “Management’s Discussion and Analysis of 
Financial Condition and Results of Operations—Results of Operations” and “Notes to Consolidated Financial Statements—
Note 15. Segment Information” beginning on F-28 for financial information for each of our segments for the past three fiscal 
years.
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Critical Illness Recovery Hospitals
We are a leading operator of critical illness recovery hospitals in the United States. Our hospitals are certified by Medicare 
as long term care hospitals (“LTCHs”). As of December 31, 2024, we operated 104 critical illness recovery hospitals in 29 
states. For the years ended December 31, 2022, 2023, and 2024, approximately 38%, 37%, and 33%, respectively, of the 
revenue of our critical illness recovery hospital segment came from Medicare reimbursement. As of December 31, 2024, we 
employed approximately 16,500 people in our critical illness recovery hospital segment, consisting primarily of registered 
nurses, respiratory therapists, physical therapists, occupational therapists, and speech therapists.
We operate the majority of our critical illness recovery hospitals as a hospital within a hospital (an “HIH”). A critical 
illness recovery hospital that operates as an HIH typically leases space from a general acute care hospital, or “host hospital,” 
and operates as a separately licensed hospital within the host hospital, or on the same campus as the host hospital. In contrast, a 
free-standing critical illness recovery hospital does not operate on a host hospital campus. We operated 104 critical illness 
recovery hospitals at December 31, 2024, of which 70 were operated as HIHs and 34 were operated as free-standing hospitals.
Patients are typically admitted to our critical illness recovery hospitals from general acute care hospitals, likely following 
an intensive care unit stay, and suffer from chronic critical illness. These patients have highly specialized needs, with serious 
and complex medical conditions involving multiple organ systems. These conditions are often a result of complications related 
to heart failure, complex infectious disease, respiratory failure and pulmonary disease, complex surgery requiring prolonged 
recovery, renal disease, neurological events, and trauma. Given their complex medical needs, these patients require a longer 
length of stay than patients in a general acute care hospital and benefit from being treated in a critical illness recovery hospital 
that is designed to meet their unique medical needs. For the year ended December 31, 2024, the average length of stay for 
patients in our critical illness recovery hospitals was 31 days.
Additionally, we continually seek to increase our admissions by demonstrating our quality outcomes and, by doing so, 
expanding and improving our relationships with the physicians and general acute care hospitals in the markets where we 
operate. We maintain a strong focus on the provision of high-quality medical care within our facilities. The Joint Commission 
(“TJC”), DNV GL Healthcare USA, Inc. (“DNV”), and the Center for Improvement in Healthcare Quality (“CIHQ”) are 
independent accreditation organizations that establish standards related to the operation and management of healthcare 
facilities. As of December 31, 2024, we operated 104 critical illness recovery hospitals, 102 of which were accredited by TJC 
and two of which were accredited by DNV. Also as of December 31, 2024, all of our critical illness recovery hospitals were 
certified by Medicare as LTCHs. Each of our critical illness recovery hospitals must regularly demonstrate to a survey team 
conformance to the standards established by TJC, DNV, CIHQ, or the Medicare program, as applicable.
When a patient is referred to one of our critical illness recovery hospitals by a physician, case manager, discharge planner, 
or payor, a clinical assessment is performed to determine patient eligibility for admission. Based on the determinations reached 
in this clinical assessment, an admission decision is made.
Upon admission, an interdisciplinary team meets to perform a comprehensive review of the patient’s condition. The 
interdisciplinary team is composed of a number of clinicians and may include any or all of the following: an attending 
physician; a registered nurse; a physical, occupational, and speech therapist; a respiratory therapist; a dietitian; a pharmacist; 
and a case manager. Upon completion of an initial evaluation by each member of the treatment team, an individualized 
treatment plan is established and initiated. Case management coordinates all aspects of the patient’s hospital stay and serves as 
a liaison to the insurance carrier’s case management staff as appropriate. The case manager specifically communicates clinical 
progress, resource utilization, and treatment goals to the patient, the treatment team, and the payor.
Each of our critical illness recovery hospitals has a distinct medical staff that is composed of physicians from multiple 
specialties that have successfully completed the required privileging and credentialing process. In general, physicians on the 
medical staff are not directly employed, but are more commonly independent, and practice at multiple hospitals in the 
community. Attending physicians conduct daily rounds on their patients while consulting physicians provide consulting 
services based on the specific medical needs of our patients. Each critical illness recovery hospital develops on-call 
arrangements with individual physicians to help ensure that a physician is available to care for our patients. When determining 
the appropriate composition of the medical staff of a critical illness recovery hospital, we consider the size of the critical illness 
recovery hospital, services provided by the critical illness recovery hospital, and the size and capabilities of the medical staff of 
the general acute care hospital that hosts that HIH or the proximity of an acute care hospital to the free-standing critical illness 
recovery hospital. The medical staff of each of our critical illness recovery hospitals meets the applicable requirements set forth 
by Medicare, the hospital’s applicable accrediting organizations, and the state in which that critical illness recovery hospital is 
located.
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Our critical illness recovery hospital segment is led by a president, chief medical officer, chief nursing officer, and chief 
quality officer. Each of our critical illness recovery hospitals has an onsite management team consisting of a chief executive 
officer, a medical director, a chief nursing officer, and a director of business development. These teams manage local strategy 
and day-to-day operations, including oversight of clinical care and treatment. They also assume primary responsibility for 
developing relationships with the general acute care providers and clinicians in the local areas we serve that refer patients to our 
critical illness recovery hospitals. We provide our critical illness recovery hospitals with centralized accounting, treasury, 
payroll, legal, operational support, human resources, compliance, management information systems, health information, 
credentialing, physician contracting support, and billing and collection services. The centralization of these services improves 
efficiency and permits staff at our critical illness recovery hospitals to focus their time on patient care.
For a description of government regulations and Medicare payments made to our critical illness recovery hospitals, see 
“Government Regulations” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Regulatory Changes.”
Critical Illness Recovery Hospital Strategy
The key elements of our critical illness recovery hospital strategy are to:
Focus on Specialized Inpatient Services. We serve highly acute patients and patients with debilitating injuries and 
rehabilitation needs that cannot be adequately cared for in a less medically intensive environment, such as a skilled nursing 
facility. Patients admitted to our critical illness recovery hospitals require long stays, benefiting from a more specialized and 
targeted clinical approach. Our care model is distinct from what patients experience in general acute care hospitals.
Provide High-Quality Care and Service. Our critical illness recovery hospitals serve a critical role in comprehensive 
healthcare delivery. Through our specialized treatment programs and staffing models, we treat patients with acute, highly 
complex, and specialized medical needs. Our treatment programs focus on specific patient needs and medical conditions, such 
as ventilator weaning protocols, comprehensive wound care assessments and treatment protocols, medication review and 
antibiotic stewardship, infection control prevention, and customized mobility, speech, and swallow programs. Our staffing 
models seek to ensure that patients have the appropriate clinical resources over the course of their stay. We maintain quality 
assurance programs to support and monitor quality of care standards and to meet regulatory requirements and maintain 
Medicare certifications. We believe that we are recognized for providing quality care and service, which helps develop brand 
loyalty in the local areas we serve.
Our treatment programs are continuously reassessed and updated based on peer-reviewed literature. This approach 
provides our clinicians access to the best practices and protocols that we have found to be effective in treating various 
conditions in this population such as respiratory failure, non-healing wounds, brain injury, renal dysfunction, and complex 
infectious diseases. In addition, we customize these programs to provide a treatment plan tailored to meet our patients’ unique 
needs. The collaborative team-based approach coupled with the intense focus on patient safety and quality affords these highly 
complex patients the best opportunity to recover from catastrophic illness. This comprehensive care model is ultimately 
measured by the functional recovery of each of our patients.
Our critical illness recovery hospitals demonstrated a pivotal role in caring for patients during the COVID-19 pandemic. 
Our critical illness recovery hospitals were and continue to be in a position to enhance and promote recovery of patients with 
COVID-19, as many patients with severe manifestations of COVID-19 require prolonged mechanical ventilation. We have 
developed specialized strategies for liberation from prolonged mechanical ventilation, promoting physical recovery through 
innovative therapies and rehabilitation programs while reducing risk of adverse ventilator-associated events.
The quality of the patient care we provide is continually monitored using several measures, including clinical outcomes 
data and analyses and patient satisfaction surveys. Quality metrics from our critical illness recovery hospitals are used to create 
monthly, quarterly, and annual reporting for our leadership team. In order to benchmark ourselves against other hospitals, we 
collect our clinical and patient satisfaction information and compare it to national standards and the results of other healthcare 
organizations. We are required to report quality measures to individual states based on unique requirements and laws. We also 
submit required quality data elements to the Center for Medicare & Medicaid Services (“CMS”). See “Government Regulations
—Other Healthcare Regulations—Medicare Quality Reporting.”
Control Operating Costs. We continually seek to improve operating efficiency and control costs at our critical illness 
recovery hospitals by standardizing operations and centralizing key administrative functions. These initiatives include:
•
centralizing administrative functions such as accounting, finance, treasury, payroll, legal, operational support, human 
resources, health information, credentialing, compliance, and billing and collection;
•
standardizing management information systems to assist in capturing the medical record, accounting, billing, 
collections, and data capture and analysis; and
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•
centralizing sourcing and contracting to receive discounted prices for pharmaceuticals, medical supplies, and other 
commodities used in our operations.
Increase Commercial Volume. We have focused on continued expansion of our relationships with commercial insurers to 
increase our volume of patients with commercial insurance in our critical illness recovery hospitals. We believe that 
commercial payors seek to contract with our hospitals because we offer our patients high-quality, cost-effective care at more 
attractive rates than general acute care hospitals. We also offer commercial enrollees customized treatment programs not 
typically offered in general acute care hospitals.
Pursue Opportunistic Acquisitions. We may grow our network of critical illness recovery hospitals through opportunistic 
acquisitions. When we acquire a critical illness recovery hospital or a group of related facilities, a team of our professionals is 
responsible for formulating and executing an integration plan. We seek to improve financial performance at such facilities by 
adding clinical programs that attract commercial payors, centralizing administrative functions, and implementing our 
standardized resource management programs.
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Rehabilitation Hospitals
Our rehabilitation hospitals provide comprehensive physical medicine, as well as rehabilitation programs and services, 
which serve to optimize patient health, function, and quality of life. As of December 31, 2024, we operated 35 rehabilitation 
hospitals in 14 states. For the years ended December 31, 2022, 2023, and 2024, approximately 46%, 47%, and 45% 
respectively, of the revenue of our rehabilitation hospital segment came from Medicare reimbursement. As of December 31, 
2024, we employed approximately 13,700 people in our rehabilitation hospital segment, consisting primarily of registered 
nurses, respiratory therapists, physical therapists, occupational therapists, speech therapists, neuropsychologists, and other 
psychologists.
Patients at our rehabilitation hospitals have specialized needs, with serious and often complex medical conditions 
requiring rehabilitative healthcare services in an inpatient setting. These conditions require targeted therapy and rehabilitation 
treatment, including comprehensive rehabilitative services for brain and spinal cord injuries, strokes, amputations, neurological 
disorders, orthopedic conditions, pediatric congenital or acquired disabilities, and cancer. Given their complex medical needs 
and gradual and prolonged recovery, these patients generally require a longer length of stay than patients in a general acute care 
hospital. For the year ended December 31, 2024, the average length of stay for patients in our rehabilitation hospitals was 
14 days.
Additionally, we continually seek to increase our admissions by demonstrating our quality outcomes and, by doing so, 
expanding and improving our relationships with the physicians and general acute care hospitals in the markets where we 
operate. We maintain a strong focus on the provision of high-quality medical care within our facilities. As of December 31, 
2024, we operated 35 rehabilitation hospitals, all of which were accredited by TJC. Also as of December 31, 2024, 34 of our 
rehabilitation hospitals were certified by Medicare as inpatient rehabilitation facilities (“IRFs”). 30 of our rehabilitation 
hospitals also received accreditation from the Commission on Accreditation of Rehabilitation Facilities (“CARF”), an 
independent, not-for-profit organization that establishes standards related to the operation of medical rehabilitation facilities. 
Each of our rehabilitation hospitals must regularly demonstrate to a survey team conformance to the standards established by 
TJC, the Medicare program, or CARF, as applicable.
When a patient is referred to one of our rehabilitation hospitals by a physician, case manager, discharge planner, health 
maintenance organization, or insurance company, we perform a clinical assessment of the patient to determine if the patient 
meets criteria for admission. Based on the determinations reached in this clinical assessment, an admission decision is made.
Upon admission, an interdisciplinary team reviews a patient’s condition. The interdisciplinary team is composed of a 
number of clinicians and may include any or all of the following: an attending physician; a registered nurse; a physical, 
occupational, and speech therapist; a respiratory therapist; a dietitian; a pharmacist; and a case manager. Upon completion of an 
initial evaluation by each member of the treatment team, an individualized treatment plan is established and implemented. The 
case manager coordinates all aspects of the patient’s hospital stay and serves as a liaison with the insurance carrier’s case 
management staff when appropriate. The case manager communicates progress, resource utilization, and treatment goals 
between the patient, the treatment team, and the payor.
Each of our rehabilitation hospitals has a multi-specialty medical staff that is composed of physicians who have completed 
the privileging and credentialing process required by that rehabilitation hospital and have been approved by the governing 
board of that rehabilitation hospital. Physicians on the medical staff of our rehabilitation hospitals are generally not directly 
employed by our rehabilitation hospitals, but instead have staff privileges at one or more hospitals. At each of our rehabilitation 
hospitals, attending physicians conduct rounds on their patients on a regular basis and consulting physicians provide consulting 
services based on the medical needs of our patients. Our rehabilitation hospitals also have on-call arrangements with physicians 
to help ensure that a physician is available to care for our patients. We staff our rehabilitation hospitals with the number of 
physicians, therapists, and other medical practitioners that we believe is appropriate to address the varying needs of our patients. 
When determining the appropriate composition of the medical staff of a rehabilitation hospital, we consider the size of the 
rehabilitation hospital, services provided by the rehabilitation hospital, and, if applicable, the proximity of an acute care hospital 
to the free-standing rehabilitation hospital. The medical staff of each of our rehabilitation hospitals meets the applicable 
requirements set forth by Medicare, the facility’s applicable accrediting organizations, and the state in which that rehabilitation 
hospital is located.
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Our rehabilitation hospital segment is led by a president, chief medical officer, chief academic officer, chief nursing 
officer, and chief quality officer. Each of our rehabilitation hospitals has an onsite management team consisting of a chief 
executive officer, a medical director, a chief nursing officer, a director of therapy services, and a director of business 
development. These teams manage local strategy and day-to-day operations, including oversight of clinical care and treatment. 
They also assume primary responsibility for developing relationships with the general acute care providers and clinicians in the 
local areas we serve that refer patients to our rehabilitation hospitals. We provide our facilities within our rehabilitation hospital 
segment with centralized accounting, treasury, payroll, legal, operational support, human resources, compliance, management 
information systems, health information, credentialing, physician contracting support, and billing and collection services. The 
centralization of these services improves efficiency and permits the staff at our rehabilitation hospitals to focus their time on 
patient care.
For a description of government regulations and Medicare payments made to our rehabilitation hospitals, see 
“Government Regulations” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Regulatory Changes.”
Rehabilitation Hospital Strategy
The key elements of our rehabilitation hospital strategy are to:
Focus on Specialized Inpatient Services. We serve patients with debilitating injuries and rehabilitation needs that cannot 
be adequately cared for in a less medically intensive environment, such as a skilled nursing facility. Generally, patients in our 
rehabilitation hospitals require longer stays and can benefit from more specialized and intensive clinical care than patients 
treated in general acute care hospitals and require more intensive therapy than that provided in outpatient rehabilitation clinics.
Provide High-Quality Care and Service. Our rehabilitation hospitals serve a critical role in comprehensive healthcare 
delivery. Through our specialized treatment programs and staffing models, we treat patients with complex and specialized 
medical needs. Our specialized treatment programs focus on specific patient needs and medical conditions, such as 
rehabilitation programs for brain trauma and spinal cord injuries. We also focus on specific programs of care designed to restore 
strength, improve physical and cognitive function, and promote independence in activities of daily living for patients who have 
suffered complications from strokes, amputations, cancer, and neurological and orthopedic conditions. Our staffing models seek 
to ensure that patients have the appropriate clinical resources over the course of their stay. We maintain quality assurance 
programs to support and monitor quality of care standards and to meet regulatory requirements and maintain Medicare 
certifications. We believe that we are recognized for providing quality care and service, which helps develop brand loyalty in 
the local areas we serve.
Our treatment programs, which are continuously reassessed and updated, benefit patients because they give our clinicians 
access to the best practices and protocols that we have found to be most effective in treating various conditions such as brain 
and spinal cord injuries, strokes, and neuromuscular disorders. In addition, we combine or modify these programs to provide a 
treatment plan tailored to meet our patients’ unique needs. We measure the outcomes and successes of our patients’ recovery in 
order to provide the best possible patient care and service.
The quality of the patient care we provide is continually monitored using several measures, including clinical outcomes 
data and analyses and patient satisfaction surveys. Quality metrics from our rehabilitation hospitals are used to create monthly, 
quarterly, and annual reporting for our leadership team. In order to benchmark ourselves against other hospitals, we collect our 
clinical and patient satisfaction information and compare it to national standards and the results of other healthcare 
organizations. We are required to report quality measures to individual states based on unique requirements and laws. We also 
submit required quality data elements to CMS. See “Government Regulations—Other Healthcare Regulations—Medicare 
Quality Reporting.”
Control Operating Costs. We continually seek to improve operating efficiency and control costs at our rehabilitation 
hospitals by standardizing operations and centralizing key administrative functions. These initiatives include:
•
centralizing administrative functions such as accounting, finance, treasury, payroll, legal, operational support, human 
resources, compliance, health information, credentialing, and billing and collection;
•
standardizing management information systems to assist in capturing the medical record, accounting, billing, 
collections, and data capture and analysis; and
•
centralizing sourcing and contracting to receive discounted prices for pharmaceuticals, medical supplies, and other 
commodities used in our operations.
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Increase Commercial Volume. We have focused on continued expansion of our relationships with commercial insurers to 
increase our volume of patients with commercial insurance in our rehabilitation hospitals. We believe that commercial payors 
seek to contract with our rehabilitation hospitals because we offer our patients high-quality, cost-effective care at more 
attractive rates than general acute care hospitals. We also offer commercial enrollees customized and comprehensive 
rehabilitation treatment programs not typically offered in general acute care hospitals.
Develop Rehabilitation Hospitals through Pursuing Joint Ventures with Large Healthcare Systems. By leveraging the 
experience of our senior management and development team, we believe that we are well positioned to expand our portfolio of 
joint ventured operations. When we identify joint venture opportunities, our development team conducts an extensive review of 
the area’s referral patterns and commercial insurance rates to determine the general reimbursement trends and payor mix. Once 
discussions commence with a healthcare system, we identify the specific needs of a joint venture, which could include working 
capital, the construction of new space, or the leasing and renovation of existing space. A joint venture typically consists of us 
and the healthcare system contributing certain post-acute care businesses into a newly formed entity. We typically function as 
the manager and hold either a majority or minority ownership interest. We bring clinical expertise and clinical programs that 
attract commercial payors and implement our standardized resource management programs, which may improve the clinical 
outcome and enhance the financial performance of the joint venture.
Pursue Opportunistic Acquisitions. We may grow our network of rehabilitation hospitals through opportunistic 
acquisitions. When we acquire a rehabilitation hospital or a group of related facilities, a team of our professionals is responsible 
for formulating and executing an integration plan. We seek to improve financial performance at such facilities by adding 
clinical programs that attract commercial payors, centralizing administrative functions, and implementing our standardized 
resource management programs.
Outpatient Rehabilitation
We are the largest operator of outpatient rehabilitation clinics in the United States based on number of facilities, with 
1,914 facilities throughout 39 states and the District of Columbia as of December 31, 2024. Our outpatient rehabilitation clinics 
are typically located in a medical complex or retail location. Our outpatient rehabilitation segment employed approximately 
11,300 people as of December 31, 2024.
In our outpatient rehabilitation clinics, we provide physical, occupational, and speech rehabilitation programs and 
services. We also provide certain specialized programs such as functional programs for work related injuries, hand therapy, 
post-concussion rehabilitation, pelvic health rehabilitation, pediatric rehabilitation, cancer rehabilitation, and athletic training 
services. The typical patient in one of our outpatient rehabilitation clinics suffers from musculoskeletal impairments that restrict 
his or her ability to perform normal activities of daily living. These impairments are often associated with accidents, sports 
injuries, work related injuries, or post-operative orthopedic and other medical conditions. Our rehabilitation programs and 
services are designed to help these patients minimize physical and cognitive impairments and maximize functional ability. We 
also provide services designed to prevent short term disabilities from becoming chronic conditions. Our rehabilitation services 
are provided by our professionals including licensed physical therapists, occupational therapists, and speech-language 
pathologists.
Outpatient rehabilitation patients are generally referred or directed to our clinics by a physician, employer, or health 
insurer who believes that a patient, employee, or member can benefit from the level of therapy we provide in an outpatient 
setting. Although individuals in all states may have some form of direct access to physical therapy services, the level of direct 
access varies based on provisions and limitations in each jurisdiction. In recent years, all states have enacted laws that allow 
individuals to seek outpatient physical rehabilitation services without a physician order. In our outpatient rehabilitation 
segment, for the year ended December 31, 2024, approximately 82% of our revenue comes from commercial payors, including 
healthcare insurers, managed care organizations, workers’ compensation programs, contract management services, and private 
pay sources. We believe that our services are attractive to healthcare payors who are seeking to provide high-quality and cost-
effective care to their enrollees. The balance of our reimbursement is derived from Medicare and other government sponsored 
programs.
For a description of government regulations and Medicare payments made to our outpatient rehabilitation services, see 
“Government Regulations” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Regulatory Changes.”
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Outpatient Rehabilitation Strategy
The key elements of our outpatient rehabilitation strategy are to:
Provide High-Quality Care and Service. We are focused on providing a high level of access, quality, and care to our 
patients throughout their entire course of treatment. We collect patient reported outcomes that allow us to assess each patient’s 
functional improvement. To measure satisfaction with our service we have developed surveys for both patients and physicians. 
Our clinics utilize the feedback from these surveys to continuously refine and improve service levels. We believe that by 
focusing on quality care and offering a high level of customer service we develop brand loyalty which allows us to strengthen 
our relationships with referring physicians, employers, and health insurers to drive additional patient volume. 
Increase Market Share. We strive to establish a leading presence within the local areas we serve. We use analytics to 
assess underserved needs in rehabilitation markets. We then target those areas for additional growth. To increase our presence, 
we seek to open new clinics in our existing markets. We have also entered into joint ventures with hospital systems that have 
resulted in an increase in the number of facilities that we operate. This allows us to realize economies of scale, heightened brand 
loyalty, and workforce continuity. We also focus on increasing our workers’ compensation and commercial/managed care 
payor mix. 
Expand Rehabilitation Programs and Services. Through our local clinical directors of operations and clinic managers 
within their service areas, we assess the healthcare needs of the areas we serve. Based on these assessments, we implement 
additional clinical programs (such as cancer rehabilitation and pelvic health) and services (such as telehealth and home physical 
therapy) specifically targeted to meet demand in the local community. In designing these programs we benefit from the 
knowledge we gain through our patient outcomes within our national network of clinics. This knowledge is used to design 
programs that optimize treatment methods and measure changes in health status, clinical outcomes, and patient satisfaction.
Optimize Payor Contract Reimbursements. We review payor contracts scheduled for renewal and potential new payor 
contracts to assure reasonable reimbursements for the services we provide. Before we enter into a new contract with a 
commercial payor, we assess the reasonableness of the reimbursements by analyzing past and projected patient volume and 
clinic capacity. We create a retention strategy for the top performing contracts and a renegotiation strategy for contracts that do 
not meet our defined criteria. We believe that our national footprint and our strong reputation enable us to negotiate favorable 
reimbursement rates with commercial insurers.
Maintain Strong Community and Employee Relations. We believe that the relationships between our employees and the 
referral sources in their communities are critical to our success. Our referral sources, such as physicians and healthcare case 
managers, send their patients to our clinics based on three factors: the quality of our care, the customer service we provide, and 
their familiarity with our therapists. We seek to retain and motivate our therapists by implementing a performance-based bonus 
program, a defined career path with the ability to be promoted from within, timely communication on company developments, 
and internal training programs. We also focus on empowering our employees by giving them a high degree of autonomy in 
determining local area strategy. We seek to identify therapists who are potential business leaders. This management approach 
reflects the unique nature of each local area in which we operate and the importance of encouraging our employees to assume 
responsibility for their clinic’s financial and operational performance.
Pursue Opportunistic Acquisitions. We may grow our network of outpatient rehabilitation facilities through opportunistic 
acquisitions. We believe our size and centralized infrastructure allow us to take advantage of operational efficiencies and 
improve financial performance at acquired facilities.
Other
Other activities include our corporate administration and shared services, as well as employee leasing services with our 
non-consolidating subsidiaries. We also hold minority investments in other healthcare related businesses. These include 
investments in companies that provide specialized technology and services to healthcare entities, as well as providers of 
complementary services.
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Our Competitive Strengths
We believe that the success of our business model is based on a number of competitive strengths, including our position as 
a leading operator in each of our business segments, our proven financial performance, our strong cash flow, our significant 
scale, our experience in completing and integrating acquisitions, our partnerships with large healthcare systems, our ability to 
capitalize on acquisition opportunities, and our experienced management team.
Leading Operator in Distinct but Complementary Lines of Business. We believe that we are a leading operator in our 
business segments based on number of facilities in the United States. Our leadership position and reputation as a high-quality, 
cost-effective healthcare provider in each of our business segments allows us to attract patients and employees, aids us in our 
marketing efforts to referral sources, and helps us negotiate payor contracts. In our critical illness recovery hospital segment, we 
operated 104 critical illness recovery hospitals in 29 states as of December 31, 2024. In our rehabilitation hospital segment, we 
operated 35 rehabilitation hospitals in 14 states as of December 31, 2024. In our outpatient rehabilitation segment, we operated 
1,914 outpatient rehabilitation clinics in 39 states and the District of Columbia as of December 31, 2024. With these leading 
positions in the areas we serve, we believe that we are well-positioned to benefit from the rising demand for medical services 
due to an aging population in the United States, which will drive growth across our business segments.
Proven Financial Performance and Strong Cash Flow. We have established a track record of improving the financial 
performance of our facilities due to our disciplined approach to revenue growth, expense management, and focus on free cash 
flow generation. This includes regular review of specific financial metrics of our business to determine trends in our revenue 
generation, expenses, billing, and cash collection. Based on the ongoing analysis of such trends, we make adjustments to our 
operations to optimize our financial performance and cash flow.
Significant Scale. By building significant scale in each of our business segments, we have been able to leverage our 
operating costs by centralizing administrative functions at our corporate office.
Experience in Successfully Completing and Integrating Acquisitions. Since our inception in 1997 through 2024, we 
completed a number of significant acquisitions. We believe that we have improved the operating performance of these 
businesses over time by applying our standard operating practices and by realizing efficiencies from our centralized operations 
and management.
Experience in Partnering with Large Healthcare Systems. Over the past several years we have partnered with large 
healthcare systems to provide post-acute care services. We believe that we provide operating expertise to these ventures through 
our experience in operating critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation facilities and 
have improved and expanded the level of post-acute care services provided in these communities, as well as the financial 
performance of these operations.
Well-Positioned to Capitalize on Acquisition Opportunities. We are well-positioned to pursue selective acquisitions within 
each of our business segments to augment our internal growth. Many of the nation’s critical illness recovery hospitals, 
rehabilitation hospitals, and outpatient rehabilitation facilities are operated by independent operators lacking national or broad 
regional scope. We believe that our geographically diversified portfolio of facilities provide us with a footprint to strengthen 
and grow our businesses in the markets we operate and in new markets that need the services we provide.
Experienced and Proven Management Team. The members of our senior management team have extensive experience in 
the healthcare industry, with an average of almost 25 years in the business. In recent years, we have reorganized our operations 
to expand executive talent and promote management continuity.
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Sources of Revenue
The following table presents the approximate percentages by payor source of revenue received for healthcare services we 
provided for the periods indicated: 
 
Year Ended December 31,
Revenue by Payor Source
2022
2023
2024
Medicare
 31.4 %
 30.8 %
 28.8 %
Commercial insurance(1)
 49.0 %
 49.3 %
 51.3 %
Workers’ Compensation
 4.8 %
 4.7 %
 4.4 %
Private and other(2)
 12.5 %
 12.3 %
 12.5 %
Medicaid
 2.3 %
 2.9 %
 3.0 %
Total
 100.0 %
 100.0 %
 100.0 %
_______________________________________________________________________________
(1)
Primarily includes commercial healthcare insurance carriers, health maintenance organizations, preferred provider 
organizations, and managed care programs.
(2)
Primarily includes management services, employer and other contracted services, self-payors, and non-patient related 
payments. Revenues included in this category from self-pay patients represent less than 1% of total revenue for all 
periods.
Government Sources
Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some disabled 
persons, and persons with end-stage renal disease. Medicaid is a federal-state funded program, administered by the states, 
which provides medical benefits to individuals who are unable to afford healthcare. As of December 31, 2024, we operated 104 
critical illness recovery hospitals, all of which were certified by Medicare as LTCHs. Also as of December 31, 2024, we 
operated 35 rehabilitation hospitals, 34 of which were certified by Medicare as IRFs. Our outpatient rehabilitation clinics 
regularly receive Medicare payments for their services. Additionally, many of our critical illness recovery hospitals and 
rehabilitation hospitals participate in state Medicaid programs. Amounts received under the Medicare and Medicaid programs 
are generally less than the customary charges for the services provided. In recent years, there have been significant changes 
made to the Medicare and Medicaid programs. Since a significant portion of our revenues come from patients covered under the 
Medicare program, our ability to operate our business successfully in the future will depend in large measure on our ability to 
adapt to changes in the Medicare program. See “—Government Regulations—Overview of U.S. and State Government 
Reimbursements.”
Non-Government Sources
Our non-government sources of revenue include insurance companies, workers’ compensation programs, health 
maintenance organizations, preferred provider organizations, other managed care companies, and employers, as well as patients 
directly. 
Human Capital Management
Overview
At December 31, 2024, we had approximately 44,100 employees, including approximately 30,000 full-time and 14,100 
part-time and per-diem employees. Our critical illness recovery hospital segment employees totaled approximately 16,500, 
rehabilitation hospital segment employees totaled approximately 13,700, and outpatient rehabilitation segment employees 
totaled approximately 11,300. Approximately 2,600 of the remaining employees performed corporate management, 
administration, and other support services primarily at our Mechanicsburg, Pennsylvania headquarters.
Our workforce is predominantly non-union, with less than 40 employees represented by one labor union. We consider our 
employee relations to be good and believe that our employees are essential contributors to our success. In some markets, the 
shortage of clinical personnel is a significant operating issue facing healthcare providers. Shortages of nurses and other clinical 
personnel, including therapists, may, from time to time, require us to increase use of more costly temporary personnel, which 
we refer to as “contract labor,” and other types of premium pay programs.
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Our hospitals are staffed by licensed physicians who are usually not employed by us. Any licensed physician may apply to 
be accepted to the medical staff of any of our hospitals, but the hospital’s medical staff and the appropriate governing board of 
the hospital, in accordance with established credentialing criteria, must approve acceptance to the staff. Members of the medical 
staffs of our hospitals often also serve on the medical staffs of other hospitals and may terminate their affiliation with one of our 
hospitals at any time. Within our hospital divisions, approximately 17,000 practitioners are credentialed to treat and provide 
services to our patients. In addition, some physicians or group practices provide administrative and/or clinical services in our 
hospitals under contracts.
Select Medical developed a cultural framework we call “The Select Medical Way.” One of the key tenants of this 
framework is to deliver a superior employee experience. We devote considerable time and resources to attract, engage and 
retain talented employees to successfully operate our business and achieve our goals. Each of the key areas on which we focus 
to achieve our human capital objectives is described below.
Select Medical's Human Capital and Compensation Committee undertakes an annual review of material compensation and 
human capital risk exposures, and reviews management's efforts to monitor and mitigate such exposures. 
Talent Acquisition
We have several key strategies to attract and hire top talent across the markets that we serve. These strategies include 
robust employee referral programs, new hire incentives such as sign-on bonuses and loan repayment assistance, recruitment 
marketing through social media and our internal campaign technology, promotion of virtual and in-person hiring events and 
partnering with nursing and therapy schools for clinical rotations and hiring new graduate nursing and therapy clinicians with 
extended orientation. Our recruitment and selection processes seek to ensure that we hire employees who have the level of 
education, experience, and professional licensure that align with the organization’s strategic objectives.
Training and Development
Our licensed clinicians receive new-hire orientation and training which is commensurate with the experience of the 
employee. Due to the complex medical conditions of the patients admitted to our hospitals and the specialized nature of their 
work, our nurses receive more extensive training, which has a duration of up to 13 weeks, prior to assuming patient care 
responsibilities. 
We have also developed several programs to advance technical and clinical skills, enable career growth and improve 
retention for clinical and operational employees. Using our online learning platform, we have developed an extensive catalog of 
online learning classes for both instructor-led and asynchronous learning covering technical, professional, and management-
related topics. To support mandatory educational requirements for our licensed clinicians, many of our clinical education 
courses are approved for continuing education units with the respective accrediting bodies.
To develop future leaders at all levels of the organization, we offer online curriculum as well as a variety of in-person 
workshops and intensives. In addition to internal education opportunities, we provide tuition assistance for employees who 
pursue relevant degrees and certifications from accredited educational institutions. We also utilize an internal program that 
encourages and makes it easier for employees to explore possible career growth opportunities within the Company. To promote 
business continuity, we create specific succession plans for our key operational and support management and executive 
positions.
Diversity and Inclusion
We strive to foster a culture of inclusion and equity. We are committed to providing regular employee education and 
training on respect, equity, empathy and compassion, and we evaluate and update these resources on an ongoing basis. 
Additionally, any agency or contracted individual working within our facilities receives orientation and training on our 
expectations and standards for care. We take pride in our recruitment efforts that seek to attract the best and brightest talent 
from around the country. We are committed to having a workforce that reflects diversity at all levels, and we partner with 
several organizations to help attract diverse talent. In order to help us achieve these goals, we have established a diversity task 
force that oversees affirmative action planning and provides strategic recommendations to help ensure our goals for a diverse 
and inclusive workplace remain robust and actionable.
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Employee Engagement and Wellness
We demonstrate our care for our employees through our safety, benefit, and employee resource programs. We strive to 
create and sustain a culture of employee safety in each of our facilities. 
We have deployed company-wide a communications tool called the “10-Foot Circle of Employee Safety.” This tool is 
meant to help leaders and staff focus on areas of our work which cause workplace injuries. This program has resulted in 
significant reductions of employee injuries at work. We have also implemented an Employee Assistance Program (“EAP”) 
which has become a valuable resource for employees needing no cost or low cost counseling/mental health services, legal 
support, or family assistance. Our EAP provides access to resources for individuals dealing with grief, anxiety, and other 
concerns relevant to and at the forefront of our communities. We offer robust benefit programming with health coaching on 
diverse topics like weight management, smoking cessation, and maintaining and improving health goals, and we offer training 
to our employees to help them develop their skills. We utilize surveys of our employees that are focused on areas such as 
employee engagement, operational reliability and suggestions for improvement. Subsequently, we take actions to realize 
opportunities for improvement based on the results of these surveys. Additionally, we offer extensive supportive programs to 
individuals facing serious health concerns, including but not limited to, high blood pressure/heart conditions, diabetes, and 
cancer.
In response to heightened threats of workplace violence faced by healthcare workers, we have formed a dedicated 
interdisciplinary task force focused on development of robust strategies to enhance workplace safety.
Workforce Compensation and Pay Equity
We provide competitive compensation and benefits, including a retirement savings plan with matching opportunities, 
comprehensive healthcare and insurance benefits, health savings and flexible spending accounts, paid time off and family leave. 
We have key processes that seek to ensure our pay and benefits remain competitive across all of our disciplines. Using an 
electronic platform for both performance reviews and compensation review, each employee’s performance assessment and 
compensation go through multiple layers of review annually to promote equitable, market competitive and performance-based 
compensation. For external benchmarking, we use third party commercially available compensation surveys, as well as the 
Department of Labor wage data. We continue to navigate shortages, higher turnover, and wage pressures in the healthcare labor 
market.
Select Medical Charitable Foundation
We have operated a private, non-profit charitable foundation known as the Select Medical Charitable Foundation since 
2004. The Foundation is funded primarily by donations by our employees. The Foundation provides financial assistance to 
employees significantly impacted by natural disasters such as hurricanes, tornadoes, and wildfires. Eligibility is application-
based with grant distribution determined by the Foundation Review Committee, comprised of colleagues across the 
organization. In 2024, the Foundation assisted our colleagues impacted by hurricanes Helene, Milton, and Beryl, and tropical 
storm Francine.
Competition
Critical Illness Recovery Hospitals and Rehabilitation Hospitals 
Our critical illness recovery hospitals and our rehabilitation hospitals both compete on the basis of the quality of the 
patient services we provide, the outcomes we achieve for our patients, and the prices we charge for our services. The primary 
competitive factors in both of our critical illness recovery hospital and rehabilitation hospital segments include quality of 
services, charges for services, and responsiveness to the needs of patients, families, payors, and physicians. Other companies 
operate critical illness recovery hospitals and rehabilitation hospitals that compete with our own hospitals, including large 
operators of similar facilities, such as ScionHealth and Encompass Health Corporation, and rehabilitation units and step-down 
units operated by acute care hospitals in the markets we serve. The competitive position of a critical illness recovery hospital or 
a rehabilitation hospital is also affected by the ability of its management to negotiate contracts with purchasers of group 
healthcare services, including private employers, managed care companies, preferred provider organizations, and health 
maintenance organizations. Such organizations attempt to obtain discounts from established critical illness recovery hospital or 
rehabilitation hospital charges. The importance of obtaining contracts with preferred provider organizations, health maintenance 
organizations, and other organizations which finance healthcare, and its effect on a critical illness recovery hospital’s or 
rehabilitation hospital’s competitive position, vary from area to area depending on the number and strength of such 
organizations.
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Outpatient Rehabilitation Clinics
Our outpatient rehabilitation clinics face a highly fragmented and competitive environment. The primary competitors that 
provide outpatient rehabilitation services include physician-owned physical therapy clinics, dedicated locally owned and 
managed outpatient rehabilitation clinics, and hospital or university owned or affiliated ventures, as well as national and 
regional providers in select areas, including Athletico Physical Therapy, ATI Physical Therapy, U.S. Physical Therapy, and 
Upstream Rehabilitation. Some of these competing clinics have longer operating histories and greater name recognition in these 
communities than our clinics, and they may have stronger relationships with physicians in these communities on whom we rely 
for patient referrals. Because the barriers to entry are not substantial and current customers have the flexibility to move easily to 
new healthcare service providers, we believe that new outpatient physical therapy competitors can emerge relatively quickly.
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Government Regulations
General
The healthcare industry is required to comply with many complex laws and regulations at the federal, state, and local 
government levels. These laws and regulations require that hospitals and facilities furnishing outpatient services (including 
outpatient rehabilitation clinics) comply with various requirements and standards. These laws and regulations include those 
relating to the adequacy of medical care, facilities and equipment, personnel, operating policies and procedures, and 
recordkeeping, as well as standards for reimbursement, fraud and abuse prevention, and health information privacy and 
security. These laws and regulations are extremely complex, often overlap and, in many instances, the industry does not have 
the benefit of significant regulatory or judicial interpretation. If we fail to comply with applicable laws and regulations, we 
could suffer civil or criminal penalties, including the loss of our licenses to operate and our ability to participate in the 
Medicare, Medicaid, and other federal and state healthcare programs.
Facility Licensure
Our healthcare facilities are subject to state and local licensing statutes and regulations ranging from the adequacy of 
medical care to compliance with building codes and environmental protection laws. In order to assure continued compliance 
with these various regulations, governmental and other authorities periodically inspect our facilities, both at scheduled intervals 
and in response to complaints from patients and others. While our facilities intend to comply with existing licensing standards, 
there can be no assurance that regulatory authorities will determine that all applicable requirements are fully met at any given 
time. In addition, the state and local licensing laws are subject to changes or new interpretations that could impose additional 
burdens on our facilities. A determination by an applicable regulatory authority that a facility is not in compliance with these 
requirements could lead to the imposition of corrective action, assessment of fines and penalties, or loss of licensure, Medicare 
enrollment, certification or accreditation. These consequences could have an adverse effect on our company.
Some states require us to get approval under certificate of need regulations when we create, acquire, or expand our 
facilities or services, or alter the ownership of such facilities, whether directly or indirectly. The certificate of need regulations 
vary from state to state, and are subject to change and new interpretation. If we fail to show public need and obtain approval in 
these states for our new facilities or changes to the ownership structure of existing facilities, we may be subject to civil or even 
criminal penalties, lose our facility license, or become ineligible for reimbursement.
Professional Licensure, Corporate Practice and Fee-Splitting Laws
Healthcare professionals at our critical illness recovery hospitals, our rehabilitation hospitals, and our facilities furnishing 
outpatient services are required to be individually licensed or certified under applicable state law. We take steps to help ensure 
our employees and agents possess all necessary licenses and certifications.
Some states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine 
through the direct employment of physicians or from exercising control over medical decisions by physicians. Some states 
similarly prohibit the “corporate practice of therapy.” The laws relating to corporate practice vary from state to state and are not 
fully developed in each state in which we have facilities. Typically, however, professional corporations owned and controlled 
by licensed professionals are exempt from corporate practice restrictions and may employ physicians or therapists to furnish 
professional services. Also, in some states, hospitals are permitted to employ physicians.
Some states also prohibit entities from engaging in certain financial arrangements, such as fee-splitting, with physicians or 
therapists. The laws relating to fee-splitting also vary from state to state and are not fully developed. Generally, these laws 
restrict business arrangements that involve a physician or therapist sharing medical fees with a referral source, but in some 
states these laws have been interpreted to extend to management agreements between physicians or therapists and business 
entities under some circumstances.
We believe that each of our facilities, licensed physicians, and therapists comply with any current corporate practice and 
fee-splitting laws of the state in which they are located. In states where we are prohibited by the corporate practice of medicine 
from directly employing licensed physicians, we typically enter into management agreements with professional corporations 
that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical 
services in our facilities. Under those management agreements, we perform only non-medical administrative services, do not 
exercise control over the practice of medicine by the physicians, and structure compensation to avoid fee-splitting. In those 
states that apply the corporate practice of therapy prohibition, we either contract to obtain therapy services from an entity 
permitted to employ therapists or we manage the physical therapy practice owned by licensed therapists through which the 
therapy services are provided.
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Although we believe that our facilities comply with corporate practice and fee-splitting laws, if new regulations or judicial 
or administrative interpretations establish that our facilities do not comply with these laws, we could be subject to civil and 
perhaps criminal penalties. In addition, if any of our facilities are determined not to comply with corporate practice and fee-
splitting laws, certain of our agreements relating to the facility may be determined to be unenforceable, including our 
management agreements with the professional corporations furnishing physician services or our payment arrangements with 
insurers or employers. Future interpretations of corporate practice and fee-splitting laws, the enactment of new legislation, or 
the adoption of new regulations relating to these laws could cause us to have to restructure our business operations or close our 
facilities in a particular state. Any such penalties, determinations of unenforceability, or interpretations could have a material 
adverse effect on our business.
Medicare Enrollment and Certification
In order to participate in the Medicare program and receive Medicare reimbursement, each facility must comply with the 
applicable regulations of the United States Department of Health and Human Services relating to, among other things, the type 
of facility, its equipment, its personnel, and its standards of medical care, as well as compliance with all applicable state and 
local laws and regulations. As of December 31, 2024, all of the critical illness recovery hospitals we operated were certified by 
Medicare as LTCHs. As of December 31, 2024, 22 of the rehabilitation hospitals we operated were certified by Medicare as 
IRFs. In addition, we provide the majority of our outpatient rehabilitation services through outpatient rehabilitation clinics 
certified by Medicare as rehabilitation agencies or “rehab agencies,” which operate as outpatient rehabilitation providers for the 
purposes of the Medicare program.
Accreditation
Our critical illness recovery hospitals and our rehabilitation hospitals receive accreditation from TJC, DNV, CIHQ and/or 
CARF. As of December 31, 2024, all of the 104 critical illness recovery hospitals and all of the 35 rehabilitation hospitals we 
operated were accredited by TJC, DNV, or CIHQ. In addition, 30 of our rehabilitation hospitals have also received accreditation 
from CARF. 
Workers’ Compensation
Workers’ compensation is a state mandated, comprehensive insurance program that requires employers to fund or insure 
medical expenses, lost wages, and other costs resulting from work related injuries and illnesses. Workers’ compensation 
benefits and arrangements vary from state to state, and are often highly complex. In some states, payment for services covered 
by workers’ compensation programs are subject to cost containment features, such as requirements that all workers’ 
compensation injuries be treated through a managed care program, or the imposition of fee schedules or payment caps for 
services furnished to injured employees. Some state workers’ compensation laws limit the ability of an employer to select the 
providers furnishing care to injured employees. Several states require that physicians furnishing non-emergency services to 
workers’ compensation patients must register with the applicable state agency and undergo special continuing education and 
training. Workers’ compensation programs may also impose other requirements that affect the operations of our facilities 
furnishing outpatient services. Revenue generated directly from workers’ compensation programs represented approximately 
15% of our revenue from our outpatient rehabilitation segment, 2% of our revenue from our rehabilitation hospital segment, and 
1% of our revenue from our critical illness recovery hospital segment for the year ended December 31, 2024.
Our facilities furnishing outpatient services are reimbursed for services provided to injured workers by payors pursuant to 
the applicable state workers’ compensation statutes. Most of the states in which we maintain operations reimburse providers for 
services payable under workers’ compensation laws pursuant to a treatment-specific fee schedule with established maximum 
reimbursement levels. In states without such fee schedules, healthcare providers are often reimbursed based on “usual and 
customary” fees benchmarked by market data and negotiated by providers with payors and networks.
Inadequate increases to the applicable fee schedule amounts for our services, and changes in state workers’ compensation 
laws, including cost containment initiatives, could have a negative impact on the operations and financial performance of those 
facilities.
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Overview of U.S. and State Government Reimbursements
Medicare Program in General
The Medicare program reimburses healthcare providers for services furnished to Medicare beneficiaries, which are 
generally persons age 65 and older, those who are chronically disabled, and those suffering from end stage renal disease. The 
program is governed by the Social Security Act of 1965 and is administered primarily by the Department of Health and Human 
Services and CMS. The table below shows the percentage of revenue generated directly from the Medicare program for each of 
our segments and our company as a whole for the fiscal years ended December 31, 2022, 2023, and 2024.
 
Year Ended December 31,
Medicare Revenue by Segment
2022
2023
2024
Critical illness recovery hospital
 38.0 %
 36.5 %
 32.7 %
Rehabilitation hospital
 46.2 %
 47.2 %
 45.3 %
Outpatient rehabilitation
 15.6 %
 15.3 %
 15.2 %
Total Company
 31.4 %
 30.8 %
 28.8 %
The Medicare program reimburses various types of providers, including LTCHs, IRFs, and outpatient rehabilitation 
providers, using different payment methodologies. The Medicare reimbursement systems specific to LTCHs, IRFs, and 
outpatient rehabilitation providers, as described herein, are different than the system applicable to general acute care hospitals. 
If any of our hospitals fail to comply with requirements for payment under Medicare reimbursement systems for LTCHs or 
IRFs, as applicable, that hospital will be paid under the system applicable to general acute care hospitals. For general acute care 
hospitals, Medicare payments for inpatient care are made under the inpatient prospective payment system (“IPPS”) under which 
a hospital receives a fixed payment amount per discharge (adjusted for area wage differences) using Medicare severity 
diagnosis-related groups (“MS-DRGs”). The general acute care hospital MS-DRG payment rate is based upon the national 
average cost of treating a Medicare patient’s condition, based on severity levels of illness, in that type of facility. Although the 
average length of stay varies for each MS-DRG, the average stay of all Medicare patients in a general acute care hospital is 
substantially less than the average length of stay in LTCHs and IRFs. Thus, the prospective payment system for general acute 
care hospitals creates an economic incentive for those hospitals to discharge medically complex Medicare patients to a post-
acute care setting as soon as clinically possible. Effective October 1, 2005, CMS expanded its post-acute care transfer policy 
under which general acute care hospitals are paid on a per diem basis rather than the full MS-DRG rate if a patient is discharged 
early to certain post-acute care settings, including LTCHs and IRFs. When a patient is discharged from selected MS-DRGs to, 
among other providers, an LTCH or IRF, the general acute care hospital may be reimbursed below the full MS-DRG payment if 
the patient’s length of stay is at least one day less than the geometric mean length of stay for the MS-DRG.
Medicare Reimbursement of LTCH Services
The Medicare payment system for LTCHs is based on a prospective payment system specifically applicable to LTCHs 
(“LTCH-PPS”). The policies and payment rates under LTCH-PPS are subject to annual updates and revisions. Under LTCH-
PPS, each patient discharged from an LTCH is assigned to a distinct “MS-LTC-DRG,” which is a Medicare severity long-term 
care diagnosis-related group for LTCHs, and an LTCH is generally paid a pre-determined fixed amount applicable to the 
assigned MS-LTC-DRG (adjusted for area wage differences), subject to exceptions for short stay and high cost outlier patients 
(described below). CMS assigns relative weights to each MS-LTC-DRG to reflect their relative use of medical care resources. 
The payment amount for each MS-LTC-DRG is intended to reflect the average cost of treating a Medicare patient assigned to 
that MS-LTC-DRG in an LTCH.
Standard Federal Rate
Payment under the LTCH-PPS is dependent on determining the patient classification, that is, the assignment of the case to 
a particular MS-LTC-DRG, the weight of the MS-LTC-DRG, and the standard federal payment rate. There is a single standard 
federal rate that encompasses both the inpatient operating costs, which includes a labor and non-labor component, and capital-
related costs that CMS updates on an annual basis. LTCH-PPS also includes special payment policies that adjust the payments 
for some patients based on the patient’s length of stay, the facility’s costs, whether the patient was discharged and readmitted, 
and other factors.
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Patient Criteria
The Bipartisan Budget Act of 2013, enacted December 26, 2013, established a dual-rate LTCH-PPS for Medicare patients 
discharged from an LTCH. Specifically, for Medicare patients discharged in cost reporting periods beginning on or after 
October 1, 2015, LTCHs are reimbursed at the LTCH-PPS standard federal payment rate only if, immediately preceding the 
patient’s LTCH admission, the patient was discharged from a “subsection (d) hospital” (generally, a short-term acute care 
hospital paid under IPPS) and either the patient’s stay included at least three days in an intensive care unit or coronary care unit 
at the subsection (d) hospital, or the patient was assigned to an MS-LTC-DRG for cases receiving at least 96 hours of ventilator 
services in the LTCH. In addition, to be paid at the LTCH-PPS standard federal payment rate, the patient’s discharge from the 
LTCH may not include a principal diagnosis relating to psychiatric or rehabilitation services. For any Medicare patient who 
does not meet these criteria, the LTCH will be paid a “site-neutral” payment rate, which will be the lower of: (i) the IPPS 
comparable per-diem payment rate capped at the MS-DRG payment rate plus any outlier payments; or (ii) 100 percent of the 
estimated costs for services. For hospital discharges beginning on or after October 1, 2017 through September 30, 2026, the 
IPPS comparable per diem payment amount (including any applicable outlier payment) used to determine the site neutral 
payment rate is reduced by 4.6% after any annual payment rate update.
In addition, for cost reporting periods beginning on or after October 1, 2019, LTCHs must maintain an “LTCH discharge 
payment percentage” of at least 50% to continue to be reimbursed for Medicare fee-for-service patients at the dual rates of the 
LTCH-PPS. The “LTCH discharge payment percentage” is a ratio, expressed as a percentage, of Medicare fee-for-service (FFS) 
discharges not paid the site neutral payment rate (i.e., those meeting LTCH patient criteria) to the total number of Medicare FFS 
discharges occurring during the cost reporting period. If this percentage is lower than 50%, the LTCH is notified that all of its 
Medicare FFS discharges will be subject to payment adjustment beginning in the cost reporting period after it was notified. The 
payment adjustment will result in reimbursement at an IPPS equivalent payment rate. However, the LTCH will not be subject to 
this payment adjustment if it maintains an LTCH discharge payment percentage of at least 50% during a 6-month 
“probationary-cure period” immediately before the cost reporting period when the payment adjustment would apply, and during 
that cost reporting period. An LTCH that has been subject to this payment adjustment will be reinstated at the regular dual 
payment rates of the LTCH-PPS in the cost reporting period that begins after the LTCH is notified that its LTCH discharge 
payment percentage is at least 50%.
Payment adjustments, including the interrupted stay policy (discussed herein), apply to LTCH discharges regardless of 
whether the case is paid at the standard federal payment rate or the site-neutral payment rate. However, short stay outlier 
payment adjustments do not apply to cases paid at the site-neutral payment rate. CMS calculates the annual recalibration of the 
MS-LTC-DRG relative payment weighting factors using only data from LTCH discharges that meet the criteria for exclusion 
from the site-neutral payment rate. In addition, CMS applies the IPPS fixed-loss amount for high cost outliers to site-neutral 
cases, rather than the LTCH-PPS fixed-loss amount. CMS calculates the LTCH-PPS fixed-loss amount using only data from 
cases paid at the LTCH-PPS payment rate, excluding cases paid at the site-neutral rate.
In response to the COVID-19 outbreak in the United States, the Coronavirus Aid, Relief, and Economic Security Act 
(“CARES Act”) was enacted on March 27, 2020. The CARES Act provided two temporary waivers regarding the site-neutral 
payment to LTCHs. The first waived the LTCH discharge payment percentage requirement for the cost reporting periods that 
included the emergency period. The second waived the application of the site neutral payment rate so that all LTCH cases 
admitted during the emergency period were paid the LTCH-PPS standard federal rate. These waivers ended when the public 
health emergency expired on May 11, 2023. See “Management’s Discussion and Analysis of Financial Condition and Results 
of Operations—Regulatory Changes” for further description of the CARES Act provisions. 
Short Stay Outlier Policy
CMS established a different payment methodology for Medicare patients with a length of stay less than or equal to five-
sixths of the geometric average length of stay for that particular MS-LTC-DRG, referred to as a short stay outlier (“SSO”). SSO 
cases are paid based on a per diem rate derived from blending 120% of the MS-LTC-DRG specific per diem amount with a per 
diem rate based on the general acute care hospital IPPS. Under this policy, as the length of stay of a SSO case increases, the 
percentage of the per diem payment amounts based on the full MS-LTC-DRG standard federal payment rate increases and the 
percentage of the payment based on the IPPS comparable amount decreases.
Interrupted Stays
An interrupted stay is defined as a case in which an LTCH patient, upon discharge, is admitted to a general acute care 
hospital, IRF or skilled nursing facility/swing-bed and then returns to the same LTCH within a specified period of time. If the 
length of stay at the receiving provider is equal to or less than the applicable fixed period of time, it is considered to be an 
interrupted stay case and the case is treated as a single discharge for the purposes of payment to the LTCH. For interrupted 
stays of three days or less, Medicare payments for any test, procedure, or care provided to an LTCH patient on an outpatient 
basis or for any inpatient treatment during the “interruption” would be the responsibility of the LTCH.
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Freestanding, HIH, and Satellite LTCHs
LTCHs may be organized and operated as freestanding facilities or as HIHs. As its name suggests, a freestanding LTCH is 
not located on the campus of another hospital. For such purpose, “campus” means the physical area immediately adjacent to a 
hospital’s main buildings, other areas, and structures that are not strictly contiguous to a hospital’s main buildings but are 
located within 250 yards of its main buildings, and any other areas determined, on an individual case basis by the applicable 
CMS regional office, to be part of a hospital’s campus. Conversely, an HIH is an LTCH that is located on the campus of 
another hospital. An LTCH, whether freestanding or an HIH, that uses the same Medicare provider number of an affiliated 
“primary site” LTCH is known as a “satellite.” Under Medicare policy, a satellite LTCH generally must be located within 35 
miles of its primary site LTCH and be administered by such primary site LTCH. A primary site LTCH may have more than one 
satellite LTCH. CMS sometimes refers to a satellite LTCH that is freestanding as a “remote location.” LTCH HIHs and 
satellites must comply with certain requirements to show that they operate as part of the main LTCH, and not the co-located 
hospital. Some of these requirements no longer apply to LTCHs that are located on the same campus as an IRF, an inpatient 
psychiatric facility, or any other hospital excluded from the IPPS, provided that an IPPS hospital is not also located on that 
campus.
Facility Certification Criteria
The LTCH-PPS regulations define the criteria that must be met in order for a hospital to be certified as an LTCH. To be 
eligible for payment under the LTCH-PPS, a hospital must be primarily engaged in providing inpatient services to Medicare 
beneficiaries with medically complex conditions that require a long hospital stay. In addition, by definition, LTCHs must meet 
certain facility criteria, including: (i) instituting a review process that screens patients for appropriateness of an admission and 
validates the patient criteria within 48 hours of each patient’s admission, evaluates regularly their patients for continuation of 
care, and assesses the available discharge options; (ii) having active physician involvement with patient care that includes a 
physician available on-site daily and additional consulting physicians on call; and (iii) having an interdisciplinary team of 
healthcare professionals to prepare and carry out an individualized treatment plan for each patient.
An LTCH must have an average inpatient length of stay for Medicare patients (including both Medicare covered and non-
covered days) of greater than 25 days. LTCH cases paid at the site-neutral rate and Medicare Advantage cases are excluded 
from the LTCH average length of stay calculation. LTCHs that fail to exceed an average length of stay of 25 days during any 
cost reporting period may be paid under the general acute care hospital IPPS if not corrected within established time frames. 
CMS, through its contractors, determines whether an LTCH has maintained an average length of stay of greater than 25 days 
during each annual cost reporting period.
Prior to qualifying under the payment system applicable to LTCHs, a new LTCH initially receives payments under the 
general acute care hospital IPPS. The LTCH must continue to be paid under this system for a minimum of six months while 
meeting certain Medicare LTCH requirements, the most significant requirement being an average length of stay for Medicare 
patients (including both Medicare covered and non-covered days) greater than 25 days.
Annual Payment Rate Update
Fiscal Year 2023.  On August 10, 2022, CMS published the final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2023 (affecting discharges and cost reporting periods beginning on or after October 1, 2022, through 
September 30, 2023). Certain errors in the final rule were corrected in documents published November 4, 2022 and December 
13, 2022. The standard federal rate for fiscal year 2023 was set at $46,433, an increase from the standard federal rate applicable 
during fiscal year 2022 of $44,714. The update to the standard federal rate for fiscal year 2023 included a market basket 
increase of 4.1%, less a productivity adjustment of 0.3%. The standard federal rate also included an area wage budget neutrality 
factor of 1.0004304. As a result of the CARES Act, LTCH cases were paid at the standard federal rate during the public health 
emergency. When the public health emergency ended on May 11, 2023, CMS returned to using the site-neutral payment rate for 
reimbursement of cases that did not meet the LTCH patient criteria. The fixed-loss amount for high cost outlier cases paid under 
LTCH-PPS was set at $38,518, an increase from the fixed-loss amount in the 2022 fiscal year of $33,015. The fixed-loss 
amount for high cost outlier cases paid under the site-neutral payment rate was set at $38,788, an increase from the fixed-loss 
amount in the 2022 fiscal year of $30,988.
Fiscal Year 2024.  On August 28, 2023, CMS published the final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through 
September 30, 2024). Certain errors in the final rule were corrected in documents published October 4, 2023 and November 9, 
2023. The standard federal rate for fiscal year 2024 was set at $48,117, an increase from the standard federal rate applicable 
during fiscal year 2023 of $46,433. The update to the standard federal rate for fiscal year 2024 includes a market basket 
increase of 3.5%, less a productivity adjustment of 0.2%. The standard federal rate also includes an area wage budget neutrality 
factor of 1.0031599. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $59,873, an increase from the 
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fixed-loss amount in the 2023 fiscal year of $38,518. The fixed-loss amount for high cost outlier cases paid under the site-
neutral payment rate is $42,750, an increase from the fixed-loss amount in the 2023 fiscal year of $38,788.
Fiscal Year 2025. On August 28, 2024, CMS published a final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through 
September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. In an interim 
final action document published on October 3, 2024, CMS also made modifications to the fiscal year 2025 policies and 
payment rates as a result of a recent decision issued by the United States Court of Appeals for the District of Columbia Circuit. 
The standard federal rate for fiscal year 2025 is $49,383, an increase from the standard federal rate applicable during fiscal year 
2024 of $48,117. The update to the standard federal rate for fiscal year 2025 includes a market basket increase of 3.5%, less a 
productivity adjustment of 0.5%. The standard federal rate also includes an area wage budget neutrality factor of 0.9964315. 
The fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $77,048, an increase from the fixed-loss amount in 
the 2024 fiscal year of $59,873. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate is 
$46,217, an increase from the fixed-loss amount in the 2024 fiscal year of $42,750.
High Cost Outliers and Criteria for Reconciliation of Outlier Payments
Under the LTCH PPS, CMS makes two types of outlier payments to LTCHs. First, CMS makes additional payments to 
LTCHs for high cost outlier cases that have extraordinarily high costs relative to the costs of most discharges. For these cases, 
CMS sets a fixed loss amount each year that represents the maximum loss an LTCH will incur for a case before qualifying for a 
high cost outlier payment. A high cost outlier threshold equal to the LTCH PPS adjusted Federal payment for the case plus the 
fixed loss amount determines when Medicare pays a high cost outlier payment. Such payments are based on 80% of the 
estimated cost of the case above the high cost outlier threshold. Second, CMS reduces payments to LTCHs for patients with a 
relatively short stay, which is defined as a length of stay less than or equal to five-sixths of the geometric average length of stay 
for that particular MS-LTC-DRG. Short stay outlier cases are paid using a per diem rate based on 120% of the MS-LTC-DRG 
specific per diem amount and an IPPS per diem amount. 
Outlier payments made to LTCHs during the cost reporting year may be reconciled at cost report settlement by the 
Medicare Administrative Contractor (“MAC”) if certain criteria are met. According to CMS, the reconciliation of outlier 
payments is intended to account for the fact that the LTCH’s cost-to-charge ratio (“CCR”) used to pay Medicare claims during 
the cost reporting year may differ from the LTCH’s final CCR for the year calculated by the MAC at cost report settlement. The 
outlier reconciliation criteria were: (1) a change in the LTCH’s CCR of 10 percentage points or more when comparing the 
actual CCR to the CCR used during the cost reporting period to make outlier payments; and (2) the LTCH received at least 
$500,000 in outlier payments during the cost reporting period. If the criteria for outlier reconciliation are met, the MAC will 
conduct an outlier reconciliation to determine whether the LTCH was overpaid or underpaid for outlier cases. If the LTCH was 
overpaid, the LTCH must repay Medicare in the amount of the overpayment plus the time value of money (i.e., interest). If the 
LTCH was underpaid, Medicare must pay the LTCH in the amount of the underpayment plus the time value of money.
On April 26, 2024, CMS issued new guidance in Transmittal 12594 changing the criteria for LTCH outlier 
reconciliations. CMS modified the first criterion to a change in the LTCH’s CCR of 20 percent or more from the CCR used to 
make outlier payments during the cost reporting period. CMS did not change the second criterion for reconciliation that the 
LTCH must have received at least $500,000 in outlier payments during the cost reporting period. The revised policy is effective 
for cost reporting periods beginning on or after October 1, 2024. However, CMS notes that MACs would receive the first cost 
reports subject to the revised policy in March 2026.
Setting the threshold at 20 percent for changes in the hospital’s CCR will result in more outlier reconciliations. This 
increases the likelihood that LTCHs will have a portion of their outlier payments recouped by the MAC at cost report 
settlement. Because outlier reconciliations often delay the final settlement of cost reports, and providers cannot appeal disputed 
reimbursement amounts until the cost report is settled, this new policy will likely delay more reimbursement appeals related to 
LTCH cost reports.
Medicare Reimbursement of IRF Services
IRFs are paid under a prospective payment system specifically applicable to this provider type, which is referred to as 
“IRF-PPS.” Under the IRF-PPS, each patient discharged from an IRF is assigned to a case mix group (“IRF-CMG”) containing 
patients with similar clinical conditions that are expected to require similar amounts of resources. An IRF is generally paid a 
pre-determined fixed amount applicable to the assigned IRF-CMG (subject to applicable case adjustments related to length of 
stay and facility level adjustments for location and low income patients). The payment amount for each IRF-CMG is intended 
to reflect the average cost of treating a Medicare patient’s condition in an IRF relative to patients with conditions described by 
other IRF-CMGs. The IRF-PPS also includes special payment policies that adjust the payments for some patients based on the 
patient’s length of stay, the facility’s costs, whether the patient was discharged and readmitted and other factors.
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Facility Certification Criteria
Our rehabilitation hospitals must meet certain facility criteria to be classified as an IRF by the Medicare program, 
including: (i) a provider agreement to participate as a hospital in Medicare; (ii) a pre-admission screening procedure; 
(iii) ensuring that patients receive close medical supervision and furnish, through the use of qualified personnel, rehabilitation 
nursing, physical therapy, and occupational therapy, plus, as needed, speech therapy, social or psychological services, and 
orthotic and prosthetic services; (iv) a full-time, qualified director of rehabilitation; (v) a plan of treatment for each inpatient 
that is established, reviewed, and revised as needed by a physician in consultation with other professional personnel who 
provide services to the patient; and (vi) a coordinated multidisciplinary team approach in the rehabilitation of each inpatient, as 
documented by periodic clinical entries made in the patient’s medical record to note the patient’s status in relationship to goal 
attainment, and that team conferences are held at least every two weeks to determine the appropriateness of treatment. Failure to 
comply with any of the classification criteria may result in the denial of claims for payment or cause a hospital to lose its status 
as an IRF and be paid under the prospective payment system that applies to general acute care hospitals.
Patient Classification Criteria
In order to qualify as an IRF, a hospital must demonstrate that during its most recent 12-month cost reporting period, it 
served an inpatient population of whom at least 60% required intensive rehabilitation services for one or more of 13 conditions 
specified by regulation. Compliance with the 60% Rule is demonstrated through either medical review or the “presumptive” 
method, in which a patient’s diagnosis codes are compared to a “presumptive compliance” list. Beginning October 1, 2017, the 
60% Rule’s presumptive methodology was revised to (i) include certain International Classification of Diseases, Tenth 
Revision, Clinical Modification (“ICD-10-CM”) diagnosis codes for patients with traumatic brain injury and hip fracture 
conditions and (ii) count IRF cases that contain two or more of the ICD-10-CM codes from three major multiple trauma lists in 
the specified combinations.
Annual Payment Rate Update
Fiscal Year 2023. On August 1, 2022, CMS published the final rule updating policies and payment rates for the IRF-PPS 
for fiscal year 2023 (affecting discharges and cost reporting periods beginning on or after October 1, 2022, through September 
30, 2023). The standard payment conversion factor for discharges for fiscal year 2023 was set at $17,878, an increase from the 
standard payment conversion factor applicable during fiscal year 2022 of $17,240. The update to the standard payment 
conversion factor for fiscal year 2023 included a market basket increase of 4.2%, less a productivity adjustment of 0.3%. CMS 
increased the outlier threshold amount for fiscal year 2023 to $12,526 from $9,491 established in the final rule for fiscal year 
2022.
Fiscal Year 2024. On August 2, 2023, CMS published the final rule updating policies and payment rates for the IRF-PPS 
for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through September 
30, 2024).Certain errors in the final rule were corrected in a document published on October 4, 2023.The standard payment 
conversion factor for discharges for fiscal year 2024 was set at $18,541, an increase from the standard payment conversion 
factor applicable during fiscal year 2022 of $17,878. The update to the standard payment conversion factor for fiscal year 2024 
included a market basket increase of 3.6%, less a productivity adjustment of 0.2%. CMS decreased the outlier threshold amount 
for fiscal year 2024 to $10,423 from $12,526 established in the final rule for fiscal year 2023.
Fiscal Year 2025.  On August 6, 2024, CMS published the final rule to update policies and payment rates for the IRF-PPS 
for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 
30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. The standard payment 
conversion factor for discharges for fiscal year 2025 was set at $18,907, an increase from the standard payment conversion 
factor applicable during fiscal year 2024 of $18,541. The update to the standard payment conversion factor for fiscal year 2025 
included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. CMS increased the outlier threshold amount 
for fiscal year 2025 to $12,043 from $10,423 established in the final rule for fiscal year 2024.
Medicare Reimbursement of Outpatient Rehabilitation Clinic Services
The Medicare program reimburses outpatient rehabilitation providers based on the Medicare physician fee schedule 
(“MPFS”). Outpatient rehabilitation providers may enroll in Medicare as institutional outpatient rehabilitation facilities (i.e., 
rehab agencies) or individual physical or occupational therapists in private practice. The majority of our providers are 
reimbursed through enrolled rehab agencies while the remaining balance of our clinicians are enrolled as individual physical or 
occupational therapists in private practice. 
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On an annual basis, our provider reimbursement under the MPFS is subject to changes by CMS, which may include 
adjustments in our reimbursement based on performance under the Merit-based Incentive Payment System (“MIPS”), and 
additional incentives for participation in alternative payment models (“APMs”). Historically, outpatient rehabilitation providers 
were not eligible to participate in the MIPS program. In 2019, CMS added physical and occupational therapists in private 
practice to the list of MIPS eligible clinicians. For enrolled therapists in private practice, payments under the MPFS are subject 
to adjustment in a later year based on their performance in MIPS according to established performance standards. Calendar year 
2021 was the first year that payments were adjusted, based upon the therapist’s performance under MIPS in 2019. Providers in 
facility-based outpatient therapy settings, including rehab agencies, are excluded from MIPS eligibility and therefore not subject 
to this payment adjustment.
As required under the Medicare Access and CHIP Reauthorization Act (“MACRA”), a 0.0% percent update will be 
applied each year to the fee schedule payment rates for therapy services provided in 2020 through 2025, subject to adjustments 
under MIPS and APMs. In 2026 and subsequent years, eligible professionals participating in APMs who meet certain criteria 
will receive annual updates of 0.75%, while all other professionals will receive annual updates of 0.25%. Each year from 2019 
through 2024 eligible clinicians who receive a significant share of their revenues through an advanced APM (such as 
accountable care organizations or bundled payment arrangements) that involves risk of financial losses and a quality 
measurement component will receive a 5% bonus. As required under the Consolidated Appropriations Act, 2023, the bonus 
payment will be 3.5% in 2025. The Consolidated Appropriations Act, 2024 established a 1.88% bonus payment for eligible 
clinicians in 2026. The bonus payment for APM participation is intended to encourage participation and testing of new APMs 
and to promote the alignment of incentives across payors. To date, none of our outpatient rehabilitation providers participate in 
qualified APMs.
In the calendar year 2023 MPFS final rule, CMS announced that it calculated the payment rates for the MPFS as if the 3% 
payment increase in calendar year 2022 from the Protecting Medicare and American Farmers from Sequester Cuts Act was 
never applied. The statute stated that the 3% payment increase for 2022 shall not be taken into account in determining the 
payment rates for subsequent years. As a result, physician fee schedule payments were expected to decrease 4.5% in 2023. 
CMS stated in the final rule that it expected that its policies for 2023 would result in a 1% decrease in Medicare payments for 
the therapy specialty, but this decrease did not account for the effects of the end of the 3% payment increase from 2022. 
However, Congress passed the Consolidated Appropriations Act, 2023, which required the Secretary to increase 2023 physician 
fee schedule payments by 2.5% and 2024 payments by 1.25%. As a result, payments under the 2023 MPFS physician fee 
schedule decreased by 2% in 2023. Medicare payments were also due to decrease by an additional 4% in 2023 due to 
mandatory cuts required under the PAYGO Act of 2010. The Consolidated Appropriations Act, 2023, further delayed PAYGO 
until 2025. The calendar year 2023 final rule also included further development of MIPS Value Pathways (“MVPs”) to 
transition the MIPS program. CMS began the transition to MVPs in 2023 with an initial set of MVPs in which reporting is 
voluntary. First, CMS revised the first set of seven MVPs that it adopted in the calendar year 2022 final rule. CMS removed 
certain improvement activities from these seven MVPs and added other quality measures for voluntary reporting by participants 
in these MVPs. In addition, CMS added five new MVPs that were available for voluntary reporting for the calendar year 2023 
performance period.
In the calendar year 2024 MPFS final rule, CMS calculated the payment rates without the 2.5% payment increase to 
calendar year 2023 rates from the Consolidated Appropriations Act of 2023, but with the 1.25% payment increase to calendar 
year 2024 rates from that legislation. As a result of the lower statutory payment increase for calendar year 2024 and a negative 
2.20% budget neutrality adjustment associated with changes to the relative value units, physician fee schedule payments are 
expected to decrease in 2024. CMS expected that its final policies for 2024 will result in a 3% decrease in Medicare payments 
for the therapy specialty. CMS also adopted changes to the quality payment program, including the transition from MIPS to the 
MVPs. First, CMS revised the existing set of 12 MVPs that it previously adopted in the calendar year 2022 and 2023 final rules. 
CMS removed certain improvement activities from these MVPs and added other quality measures for MVP participants to 
choose from for data reporting. CMS also consolidated two of the existing MVPs into a single primary care MVP. Finally, 
CMS added five new MVPs. According to CMS, the new Rehabilitative Support of Musculoskeletal Care MVP will be most 
applicable to clinicians who specialize in rehabilitation support for musculoskeletal care, including physical therapists and 
occupational therapists. These new MVPs are available for voluntary reporting for the calendar year 2024 performance period.
In the calendar year 2025 MPFS final rule, CMS calculated the payment rates without the 1.25% and 2.93% payment 
increases under the Consolidated Appropriations of 2023 and 2024, respectively. However, CMS expects that its policies for 
2025 will not result in any increase or decrease in Medicare payments for the therapy specialty. CMS also continued to expand 
the MVPs in anticipation of future retirement of traditional MIPS. CMS added six new MVPSs available for reporting in the 
calendar year 2025 performance period. CMS also made modifications to the quality measures, improvement activities, and cost 
measures for the previously adopted MVPs, including the Rehabilitative Support for Musculoskeletal Care MVP.
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Therapy Caps
Outpatient therapy providers reimbursed under the MPFS have historically been subject to annual limits for therapy 
expenses. The Bipartisan Budget Act of 2018 repealed the annual limits on outpatient therapy, but the law preserves the former 
therapy cap amounts as thresholds above which claims must include a modifier as a confirmation that services are medically 
necessary as justified by appropriate documentation in the medical record. The threshold is applied to physical therapy and 
speech therapy services combined and separately applied to occupational therapy. For calendar year 2022, this modifier 
threshold amount was $2,150. For calendar year 2023, the modifier threshold amount was $2,230. For calendar year 2024, the 
modifier threshold amount is $2,330. For calendar year 2025, CMS set the modifier threshold amount at $2,410. This amount is 
indexed annually by the Medicare Economic Index. Claims for services over the modifier threshold amounts without the 
modifier are denied. Along with the modifier threshold, the Bipartisan Budget Act of 2018 retained the targeted medical review 
process that was established in the Medicare Access and CHIP Reauthorization Act of 2015. For calendar year 2018 through 
calendar year 2028, all therapy claims exceeding $3,000 are subject to a targeted manual medical review process. The $3,000 
threshold is applied to physical therapy and speech therapy services combined and separately applied to occupational therapy. 
Beginning in 2028 and in each calendar year thereafter, the threshold amount for claims requiring targeted manual medical 
review will increase by the percentage increase in the Medicare Economic Index.
Modifiers to Identify Services of Physical Therapy Assistants or Occupational Therapy Assistants
In the MPFS final rule for calendar year 2019, CMS established two new modifiers (CQ and CO) to identify services 
furnished in whole or in part by physical therapy assistants (“PTAs”) or occupational therapy assistants (“OTAs”). These 
modifiers were mandated by the Bipartisan Budget Act of 2018, which requires that claims for outpatient therapy services 
furnished in whole or part by therapy assistants on or after January 1, 2020 include the appropriate modifier. In the final 2020 
MPFS rule, CMS clarified that when the physical therapist is involved for the entire duration of the service and the PTA 
provides skilled therapy alongside the physical therapist, the CQ modifier is not required. Also, when the same service (code) is 
furnished separately by the physical therapist and PTA, CMS will apply the de minimis standard to each 15-minute unit of 
codes, not on the total physical therapist and PTA time of the service, allowing the separate reporting, on two different claim 
lines, of the number of units to which the new modifiers apply and the number of units to which the modifiers do not apply. In 
the calendar year 2022 MPFS final rule, CMS implemented the final part of the requirements in the Bipartisan Budget Act of 
2018 regarding PTA and OTA services. For dates of service on and after January 1, 2022, CMS will pay for physical therapy 
and occupational therapy services provided by PTAs and OTAs at 85% of the otherwise applicable Part B payment amount. 
CMS also modified the de minimis standard for calendar year 2022. Specifically, CMS will allow a timed service to be billed 
without the CQ or CO modifier when a PTA or OTA participates in providing care, but the physical therapist or occupational 
therapist meets the Medicare billing requirements without including the PTA’s or OTA’s minutes. This occurs when the 
physical therapist or occupational therapist provides more minutes than the 15-minute midpoint.
The calendar year 2024 MPFS final rule did not contain any policy changes concerning the modifiers for services 
provided by physical therapy and occupational therapy assistants. However, the final rule included one change to Medicare 
policies relating to supervision of services provided by physical therapy assistants and occupational therapy assistants.In the 
final rule, CMS established a general supervision policy for remote therapeutic monitoring services provided by physical 
therapy assistants and occupational therapy assistants in private practice settings. In the calendar year 2025 MPFS final rule, 
CMS modified the supervision requirement for services provided by PTAs and OTAs in private practice settings. CMS 
previously required that physical therapists and occupational therapists provide direct supervision of PTAs and OTAs in private 
practice settings. However, starting January 1, 2025, a general supervision requirement will apply in private practice settings. 
One documentation requirement for Medicare payment of outpatient physical therapy and occupational therapy services is that 
a physician establish a plan of care prescribing the type, amount, and duration of services. The plan of care can be established 
by a physician or a qualified physical therapist or occupational therapist, but it must be reviewed periodically by a physician. 
Medicare requires that a physician certify that the patient needs therapy, a plan of care was established, and the services were 
furnished under the care of a physician before it will pay for outpatient physical therapy and occupational therapy services. In 
the calendar year 2025 MPFS final rule, CMS established an exception to the requirement for a physician signature on the 
certification when there is a written order or referral from the physician or non-physician practitioner in the medical record and 
there is evidence in the medical record that the therapist delivered the plan of care to the physician or non-physician practitioner 
within 30 days after the initial evaluation.
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Other Requirements for Payment
Historically, outpatient rehabilitation services have been subject to scrutiny by the Medicare program for, among other 
things, medical necessity for services, appropriate documentation for services, supervision of therapy aides and students, and 
billing for single rather than group therapy when services are furnished to more than one patient. CMS has issued guidance to 
clarify that services performed by a student are not reimbursed even if provided under “line of sight” supervision of the 
therapist. Likewise, CMS has reiterated that Medicare does not pay for services provided by aides regardless of the level of 
supervision. CMS also has issued instructions that outpatient physical and occupational therapy services provided 
simultaneously to two or more individuals by a practitioner should be billed as group therapy services.
Medicaid Reimbursement of LTCH and IRF Services
The Medicaid program is designed to provide medical assistance to individuals unable to afford care. The program is 
governed by the Social Security Act of 1965, funded jointly by each individual state and the federal government and 
administered by state agencies. Medicaid payments are made under a number of different systems, which include cost based 
reimbursement, prospective payment systems, or programs that negotiate payment levels with individual hospitals. In addition, 
Medicaid programs are subject to statutory and regulatory changes, administrative rulings, interpretations of policy by the state 
agencies, and certain government funding limitations, all of which may increase or decrease the level of program payments to 
our hospitals. Revenue generated directly from the Medicaid program represented approximately 5% of our critical illness 
recovery hospital segment revenue and 2% of our rehabilitation hospital segment revenue for the year ended December 31, 
2024.
Other Healthcare Regulations
Federal Healthcare Program Changes in Response to the COVID-19 Pandemic
The Secretary of Health and Human Services (“HHS”) authorized a number of waivers or modifications of certain 
requirements under Medicare, Medicaid and the Children’s Health Insurance Program (“CHIP”) pursuant to section 1135 of the 
Social Security Act in response to the COVID-19 outbreak in the United States. However, most of these waivers ended when 
the COVID-19 public health emergency expired on May 11, 2023. For a description of such waivers and modifications, see 
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Regulatory Changes.”
Medicare Quality Reporting
LTCHs and IRFs are subject to mandatory quality reporting requirements. LTCHs and IRFs that do not submit the 
required quality data will be subject to a 2% reduction in their annual payment update. The reduction can result in payment 
rates less than the prior year. However, the reduction will not carry over into the subsequent fiscal years.
Our LTCHs and IRFs are required to collect and report patient assessment data and clinical measures on each Medicare 
beneficiary who receives inpatient services in our facilities. We began reporting this data on October 1, 2012. CMS began 
making this data available to the public on the CMS website in December 2016. CMS has added cross-setting quality measures 
to compare quality and resource data across post-acute settings pursuant to the Improving Medicare Post-Acute Care 
Transformation Act of 2014 (the “IMPACT Act”).
Medicare Hospital Wage Index Adjustment
As part of the methodology for determining prospective payments to LTCHs and IRFs, CMS adjusts the standard payment 
amounts for area differences in hospital wage levels by a factor reflecting the relative hospital wage level in the geographic area 
of the hospital compared to the national average hospital wage level. This adjustment factor is the hospital wage index. CMS 
currently defines hospital geographic areas (labor market areas) based on the definitions of Core-Based Statistical Areas 
established by the Office of Management and Budget. 
Physician-Owned Hospital Limitations
CMS regulations include a number of hospital ownership and physician referral provisions, including certain obligations 
requiring physician-owned hospitals to disclose ownership or investment interests held by the referring physician or his or her 
immediate family members. In particular, physician-owned hospitals must furnish to patients, on request, a list of physicians or 
immediate family members who own or invest in the hospital. Moreover, a physician-owned hospital must require all physician 
owners or investors who are also active members of the hospital’s medical staff to disclose in writing their ownership or 
investment interests in the hospital to all patients they refer to the hospital. CMS can terminate the Medicare provider 
agreement of a physician-owned hospital if it fails to comply with these disclosure provisions or with the requirement that a 
hospital disclose in writing to all patients whether there is a physician on-site at the hospital, 24 hours per day, seven days per 
week.
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Under the transparency and program integrity provisions of the Affordable Care Act (“ACA”), the exception to the federal 
self-referral law (the “Stark Law”) that permits physicians to refer patients to hospitals in which they have an ownership or 
investment interest has been dramatically curtailed. Only hospitals with physician ownership and a provider agreement in place 
on December 31, 2010 are exempt from the general ban on self-referral. Existing physician-owned hospitals are prohibited from 
increasing the percentage of physician ownership or investment interests held in the hospital after March 23, 2010. In addition, 
physician-owned hospitals are prohibited from increasing the number of licensed beds after March 23, 2010, unless meeting 
specific exceptions related to the hospital’s location and patient population. In order to retain their exemption from the general 
ban on self-referrals, our physician-owned hospitals are required to adopt specific measures relating to conflicts of interest, 
bona fide investments and patient safety. As of December 31, 2024, we operated six hospitals that are owned in-part by 
physicians.
Medicare Recovery Audit Contractors
CMS contracts with third-party organizations, known as Recovery Audit Contractors (“RACs”) to identify Medicare 
underpayments and overpayments, and to authorize RACs to recoup any overpayments. RACs are paid on a contingency fee 
basis. The contingency fee is a percentage of improper overpayment recoveries or underpayments identified by the RAC. The 
RAC must return the contingency fee if an improper payment determination is reversed on appeal. RACs conduct audit 
activities nationwide in four regions of the country that cover all 50 states on a combined basis. RAC audits of our Medicare 
reimbursement may lead to assertions that we have been overpaid, require us to incur additional costs to respond to requests for 
records and pursue the reversal of payment denials through appeals, and ultimately require us to refund any amounts 
determined to have been overpaid. We cannot predict the impact of future RAC reviews on our results of operations or cash 
flows.
Fraud and Abuse Enforcement
Various federal and state laws prohibit the submission of false or fraudulent claims, including claims to obtain payment 
under Medicare, Medicaid, and other government healthcare programs. Penalties for violation of these laws include civil and 
criminal fines, imprisonment, and exclusion from participation in federal and state healthcare programs. In recent years, federal 
and state government agencies have increased the level of enforcement resources and activities targeted at the healthcare 
industry. In addition, the federal False Claims Act and similar state statutes allow individuals to bring lawsuits on behalf of the 
government, in what are known as qui tam or “whistleblower” actions, alleging false or fraudulent Medicare or Medicaid claims 
or other violations of the statute. The use of these private enforcement actions against healthcare providers has increased 
dramatically in recent years, in part because the individual filing the initial complaint is entitled to share in a portion of any 
settlement or judgment. Revisions to the False Claims Act enacted in 2009 expanded significantly the scope of liability, 
provided for new investigative tools, and made it easier for whistleblowers to bring and maintain False Claims Act suits on 
behalf of the government. See “Item 3.    Legal Proceedings.”
From time to time, various federal and state agencies, such as the Office of Inspector General of the Department of Health 
and Human Services (“OIG”) issue a variety of pronouncements, including fraud alerts, the OIG’s Annual Work Plan, and other 
reports, identifying practices that may be subject to heightened scrutiny. These pronouncements can identify issues relating to 
LTCHs, IRFs, or outpatient rehabilitation services or providers. For example, the OIG work plan includes (1) a nationwide 
audit of IRF claims, (2) a review to determine whether recipients of Provider Relief Fund payments complied with Federal 
requirements and the terms and conditions for reporting and spending such payments, (3) an audit to determine whether hospital 
price transparency information required by CMS is readily available, and (4) a review to determine whether hospitals are 
correctly billing for sepsis patients. We monitor government publications applicable to us to supplement and enhance our 
compliance efforts.
We endeavor to conduct our operations in compliance with applicable laws, including healthcare fraud and abuse laws. If 
we identify any practices as being potentially contrary to applicable law, we will take appropriate action to address the matter, 
including, where appropriate, disclosure to the proper authorities, which may result in a voluntary refund of monies to 
Medicare, Medicaid, or other governmental healthcare programs.
Remuneration and Fraud Measures
The federal anti-kickback statute prohibits some business practices and relationships under Medicare, Medicaid, and other 
federal healthcare programs. These practices include the payment, receipt, offer, or solicitation of remuneration in connection 
with, to induce, or to arrange for, the referral of patients covered by a federal or state healthcare program. Violations of the anti-
kickback law may be punished by: a criminal fine of up to $100,000 or up to ten years imprisonment for each violation, or both; 
civil monetary penalties of $20,000, $30,000 or $100,000 per violation, depending on the type of violation; damages of up to 
three times the total amount of remuneration; and exclusion from participation in federal or state healthcare programs.
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The Stark Law prohibits referrals for designated health services by physicians under the Medicare and Medicaid programs 
to other healthcare providers in which the physicians have an ownership or compensation arrangement unless an exception 
applies. Sanctions for violating the Stark Law include returning program reimbursements, civil monetary penalties of up to 
$15,000 per prohibited service provided, assessments equal to three times the dollar value of each such service provided, and 
exclusion from the Medicare and Medicaid programs and other federal and state healthcare programs. The statute also provides 
a penalty of up to $100,000 for a circumvention scheme. In addition, many states have adopted or may adopt similar anti-
kickback or anti-self-referral statutes. Some of these statutes prohibit the payment or receipt of remuneration for the referral of 
patients, regardless of the source of the payment for the care. While we do not believe our arrangements are in violation of these 
prohibitions, we cannot assure you that governmental officials charged with the responsibility for enforcing the provisions of 
these prohibitions will not assert that one or more of our arrangements are in violation of the provisions of such laws and 
regulations.
Provider-Based Status
The designation “provider-based” refers to circumstances in which a subordinate facility (such as a separately certified 
Medicare provider, a department of a provider, or a satellite facility) is treated as part of a provider for Medicare payment 
purposes. In these cases, the services of the subordinate facility are included on the “main” provider’s cost report and overhead 
costs of the main provider can be allocated to the subordinate facility, to the extent that they are shared. As of December 31, 
2024, we operated 18 critical illness recovery hospitals and nine rehabilitation hospitals that were treated as provider-based 
satellites of certain of our other facilities. In addition, 285 of the outpatient rehabilitation clinics we operated were provider-
based and operated as departments of the rehabilitation hospitals we operated. We also provide rehabilitation management and 
staffing services to hospital rehabilitation departments that may be treated as provider-based. These facilities are required to 
satisfy certain operational standards in order to retain their provider-based status.
Health Information Practices
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) mandates the adoption of standards for the 
exchange of electronic health information in an effort to encourage overall administrative simplification and enhance the 
effectiveness and efficiency of the healthcare industry, while maintaining the privacy and security of health information. 
Among the standards that the Department of Health and Human Services has adopted or will adopt pursuant to HIPAA are 
standards for electronic transactions and code sets, unique identifiers for providers (referred to as National Provider Identifier), 
employers, health plans and individuals, security and electronic signatures, privacy, and enforcement. If we fail to comply with 
the HIPAA requirements, we could be subject to criminal penalties and civil sanctions. The privacy, security and enforcement 
provisions of HIPAA were enhanced by the Health Information Technology for Economic and Clinical Health Act 
(“HITECH”), which was included in the American Recovery and Reinvestment Act (“ARRA”). Among other things, HITECH 
establishes security breach notification requirements, allows enforcement of HIPAA by state attorneys general, and increases 
penalties for HIPAA violations.
The Department of Health and Human Services has adopted standards in three areas in which we are required to comply 
that affect our operations.
Standards relating to the privacy of individually identifiable health information govern our use and disclosure of protected 
health information and require us to impose those rules, by contract, on any business associate to whom such information is 
disclosed.
Standards relating to electronic transactions and code sets require the use of uniform standards for common healthcare 
transactions, including healthcare claims information, plan eligibility, referral certification and authorization, claims status, plan 
enrollment and disenrollment, payment and remittance advice, plan premium payments, and coordination of benefits.
Standards for the security of electronic health information require us to implement various administrative, physical, and 
technical safeguards to preserve the integrity and confidentiality of electronic protected health information.
During the COVID-19 public health emergency, the Department of Health and Human Services issued four Notifications 
of Enforcement Discretion announcing that HIPAA rules would not be applied to certain activities related to the response to 
COVID-19. For example, one of the Notifications of Enforcement Discretion promoted the use of telehealth by waiving HIPAA 
penalties for providers that used telehealth in good faith during the public health emergency. However, these Notifications of 
Enforcement Discretion related to HIPAA ended on May 11, 2023, when the public health emergency expired.
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We maintain a Privacy and Security Committee that is charged with evaluating and monitoring our compliance with 
HIPAA. The Privacy and Security Committee monitors regulations promulgated under HIPAA as they have been adopted to 
date and as additional standards and modifications are adopted. Although health information standards have had a significant 
effect on the manner in which we handle health data and communicate with payors, the cost of our compliance has not had a 
material adverse effect on our business, financial condition, or results of operations. We cannot estimate the cost of compliance 
with standards that have not been issued or finalized by the Department of Health and Human Services.
In addition to HIPAA, there are numerous federal and state laws and regulations addressing patient and consumer privacy 
concerns, including unauthorized access or theft of personal information. State statutes and regulations vary from state to state. 
Lawsuits, including class actions and action by state attorneys general, directed at companies that have experienced a privacy or 
security breach also can occur. Although our policies and procedures are aimed at complying with privacy and security 
requirements and minimizing the risks of any breach of privacy or security, there can be no assurance that a breach of privacy 
or security will not occur. If there is a breach, we may be subject to various penalties and damages and may be required to incur 
costs to mitigate the impact of the breach on affected individuals.
IMPACT Act
In October 2014, President Obama signed the IMPACT Act into law. The IMPACT Act made a number of changes and 
additions to Medicare quality reporting for LTCHs, IRFs, skilled nursing facilities (“SNFs”), and home health agencies 
(“HHAs”). In addition, the IMPACT Act required HHS and the Medicare Payment Advisory Commission (“MedPAC”) to 
develop a technical prototype for a unified post-acute care (“PAC”) prospective payment system (“PPS”) that could replace the 
four existing payment systems for LTCHs, IRFs, SNFs, and HHAs.
The IMPACT Act directed HHS to begin requiring providers to report certain standardized patient assessment data to 
CMS. HHS had to adopt this reporting requirement by October 1, 2018, for LTCHs, IRFs, and SNFs, and by January 1, 2019, 
for HHAs. The IMPACT Act also required CMS to adopt and implement new cross-setting quality measures addressing, at a 
minimum, the following quality domains: (1) functional status, cognitive function, and changes in function and cognitive 
function; (2) skin integrity and changes in skin integrity; (3) medication reconciliation; (4) incidence of major falls; and (5) 
providing for the transfer of health information and treatment preferences of the patient upon transition from a hospital or 
critical access hospital to another setting, including a PAC provider or the individual’s home, or upon transition from a PAC 
provider to another setting including a different PAC provider, hospital, critical access hospital, or the individual’s home. Next, 
the IMPACT Act required that by October 1, 2016, for LTCHs, IRFs, and SNFs, and by January 1, 2017, for HHAs, CMS 
specify resource use and other measures for inclusion in the applicable reporting provisions. At a minimum, the resource use 
measures must include the following resource use domains: (1) resource use measures, including total estimated Medicare 
spending per beneficiary; (2) discharge to community; and (3) measures to reflect all-condition risk-adjusted hospitalization 
rates of potentially preventable readmission rates. CMS began implementing the IMPACT Act’s data reporting requirements in 
the FY 2016 rulemakings for LTCHs, IRFs, SNFs, and HHAs. 
In addition to the new reporting requirements, the IMPACT Act outlined a process for the potential development of a 
unified PAC PPS. The IMPACT Act does not require CMS to adopt a unified PAC PPS, nor does it provide CMS with specific 
authority to implement a new payment system. However, the IMPACT Act required HHS and MedPAC to submit a series of 
reports to Congress with recommendations and a technical prototype for a PAC PPS. These recommendations and prototypes 
could become the basis of future legislation that would create a unified PAC PPS to replace some or all of the existing Medicare 
payment systems for LTCHs, IRFs, SNFs, and HHAs. MedPAC submitted the first report to Congress in June 2016. The report 
included recommended features for a unified PAC payment system based on the Post-Acute Payment Reform Demonstration 
(“PAC-PRD”). In July 2022, HHS submitted its report to Congress with a technical prototype for a united PAC PPS developed 
around criteria stated in the IMPACT Act. Under this payment system prototype, a Medicare beneficiary would be assigned to 
one of 32 Unified PAC Clinical Groups (“UPCGs”) and to a PAC Case-Mix Group (“P-CMG”) specific to the UPCG. The 
combination of the assigned UPCG and P-CMG would determine the base payment weight, which is then adjusted according to 
certain factors, including beneficiary comorbidities and provider type. There are three general categories of UPCGs in the 
prototype which are intended to represent the patient’s primary reason for needing PAC care: (1) Rehabilitation and Therapy-
Focused, (2) Medical and Diagnosis-Focused, and (3) Medication Management, Teaching and Assessment. Each UPCG has its 
own P-CMGs to differentiate patients based on their clinical characteristics and relative costliness. The report states that 
universal implementation of a unified PAC PPS cannot be accomplished under CMS’s existing statutory authority. By June 30, 
2023, MedPAC was required to submit an additional report to Congress with recommendations and a technical prototype for a 
new PAC payment system that would satisfy the same criteria HHS was directed to use. MedPAC issued a report in June 2023 
with its final analysis and recommendations on the design of a unified PAC PPS. MedPAC concluded that a unified PAC PPS is 
feasible, but would disproportionately impact payments for certain PAC provider types, particularly LTCHs. MedPAC believes 
designing a unified PAC PPS would be relatively straightforward, but it would be more complicated to develop and implement 
such a payment system. According to MedPAC, a unified PAC PPS would also require companion policies, including changes 
to cost sharing requirements, a value-based incentive program, and uniform Medicare conditions of participation.
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Price Transparency
Starting January 1, 2021, new regulations went into effect requiring hospitals to provide clear and accessible pricing 
information online regarding the items and services they provide. First, a new regulation requires hospitals to provide a machine 
readable file containing the following standard charges for all items and services provided by the hospital: gross charges, 
discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges. 
Second, hospitals must provide a consumer-friendly display of standard charges for at least 300 “shoppable services” that 
consumers can schedule in advance. If a hospital does not offer 300 “shoppable services,” then the hospital must provide the 
consumer-friendly display of standard charges for all of the “shoppable services” that it does provide. For each “shoppable 
service,” hospitals must provide: discounted cash prices, payer-specific negotiated charges, and de-identified minimum and 
maximum negotiated charges. For hospitals that do not comply with these requirements, CMS may issue a warning notice, 
request a corrective action plan, and impose a civil monetary penalty that is publicized on the CMS website. These regulations 
were promulgated by the Trump administration and, on July 9, 2021, President Biden issued an Executive Order directing HHS 
to support the new price transparency regulations. On November 16, 2021, CMS issued a final rule that increased the maximum 
fines for hospitals that do not comply with the price transparency regulations. In 2021, non-compliant hospitals are subject to a 
fine of $300 per day. Beginning on January 1, 2022, non-compliant hospitals with 30 or fewer beds are still subject to a fine of 
$300 per day, not to exceed $2,007,500 per hospital per year. However, beginning January 1, 2022, non-complaint hospitals 
with 31 or more beds are subject to a fine in an amount that is equal to the number of hospital beds times 10, not to exceed 
$5,500 per day and $2,007,500 per year for each hospital. The maximum fine amounts are subject to increase annually using a 
multiplier determined by the Office of Management and Budget. CMS also revised its price transparency regulations to require 
that starting January 1, 2022, hospitals must make their standard charge information easily accessible without barriers. This 
includes providing the charge information in a manner that it can be accessed by automated searches and direct file downloads. 
CMS revised the price transparency regulations in the calendar year 2024 Outpatient Prospective Payment System final 
rule. Effective January 1, 2024, hospitals are required to display pricing information in a standardized format that conforms to a 
CMS template, data specifications, and data dictionary. Other changes are intended to improve the accessibility of the pricing 
data. Hospitals are also required to provide an affirmation statement confirming that the pricing information is up-to-date and 
accurate. In addition, CMS expanded its price transparency enforcement tools, including a required acknowledgement by 
hospitals of any notice of violations of the price transparency rules, the ability for CMS to notify health system leadership of 
provider violations, and the potential for CMS to publish on its website information regarding hospital violations of the price 
transparency rules. Beginning January 1, 2025, hospitals must display additional data elements, including an estimated allowed 
amount for standard charges, drug unit and type of measurement, and modifiers that could change the standard charge.
Surprise Billing
On July 13, 2021, HHS, the Department of the Treasury, the Department of Labor and the Office of Personnel 
Management published an interim final rule with comment period to implement certain provisions of the No Surprises Act, 
which was enacted as part of the Consolidated Appropriations Act, 2021. The interim final rule includes new regulations aimed 
at limiting surprise medical bills issued by health care providers to consumers. The HHS regulations adopted by this interim 
final rule are effective January 1, 2022 and apply to hospital emergency departments, freestanding emergency departments, 
health care providers and facilities, and providers of air ambulance services. The new regulations do not apply to patients 
covered by Medicare, Medicaid, Indian Health Services, Veterans Affairs health care, or TRICARE because these programs 
already prohibit balance billing. 
Starting January 1, 2022, the interim final rule’s new regulations apply to patients with health insurance coverage from a 
group health plan (including a self-insured group health plan) or from an individual market health insurance issuer. First, if a 
plan provides coverage for emergency services, the interim final rule requires that emergency services be covered: (1) without 
prior authorization; (2) regardless of whether the provider is an in-network provider or an in-network emergency facility; and 
(3) regardless of any other term or condition of the plan or coverage other than the exclusion or coordination of benefits, or a 
permitted affiliation or waiting period. Second, the interim final rule includes new limits on patient cost-sharing obligations for 
out-of-network services. Specifically, patient cost-sharing amounts for emergency services provided by out-of-network 
emergency facilities and out-of-network providers, and certain non-emergency services furnished by out-of-network providers 
at certain in-network facilities, must be calculated based on one of the following amounts: (1) an amount determined by an 
applicable All-Payer Model Agreement under section 1115A of the Social Security Act; (2) a specified state law if there is no 
such All-Payer Model Agreement; or (3) if neither of the above apply, the lesser amount of either the billed charge or the 
qualifying payment amount, which is generally the plan or issuer’s median contracted rate. Third, the interim final rule prohibits 
non-participating providers, health care facilities, and providers of air ambulance services from balance billing participants, 
beneficiaries, and enrollees in certain situations. Fourth, the interim final rule establishes that the total amount to be paid to an 
out-of-network provider or facility, including any cost-sharing, is based on: (1) an amount determined by an applicable All-
Payer Model Agreement under section 1115A of the Social Security Act; (2) a specified state law if there is no such All-Payer 
Model Agreement; or (3) an amount agreed upon by the plan or issuer and the provider or facility if there is no such Agreement 
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or state law. If none of these three circumstances apply, then the amount is determined by an independent dispute resolution 
(“IDR”) entity. Fifth, a new regulation requires providers and facilities to make publicly available and provide patients with a 
one-page notice regarding the requirements and prohibitions applicable to the provider or facility regarding balance billing, any 
applicable state balance billing prohibitions or limitations, and information on how to contact appropriate state and federal 
agencies if the patient believes the provider or facility has violated the requirements described in the notice. Finally, the interim 
final rule establishes a process for HHS to receive and resolve complaints regarding information that any health care provider, 
provider of air ambulance services, or health care facility may be failing to meet the requirements set forth in the interim final 
rule.
In a separate interim final rule published on October 7, 2021, HHS, the Department of the Treasury, the Department of 
Labor and the Office of Personnel Management adopted regulations that will govern the IDR process that will be available to 
providers and insurers that are unable to agree on the payment rate for out-of-network providers. These new regulations are 
effective starting on January 1, 2022. The new IDR process presumes that the qualifying payment amount (“QPA”) is the 
appropriate payment rate for an out-of-network service. Accordingly, the new IDR regulations require arbitrators to choose the 
offer that is closest to the QPA, unless the arbitrator determines that a party has credible information demonstrating that the 
QPA is “materially different” from the appropriate out-of-network rate for the item or service. The factors the arbitrator may 
consider to determine if the QPA is not the appropriate rate include: (1) the provider’s training, experience, and quality and 
outcome measurements; (2) the provider’s market share in the region; (3) patient acuity or the complexity of furnishing the item 
or service to the patient; (4) the provider’s teaching status, case mix, and scope of services offered; and (5) whether the provider 
or the plan engaged in good faith efforts to enter into a network agreement. Separate regulations in this interim final rule 
address a dispute resolution process for uninsured patients who receive a good faith estimate of expected charges from a 
provider, but are then billed an amount that substantially exceeds the estimated charges. When the provider’s billed charges are 
more than $400 greater than the good faith estimate, an uninsured patient may initiate a patient-provider dispute resolution 
process by submitting a notification to HHS within 120 days of receiving the provider’s bill. The dispute resolution entity will 
then examine whether the provider has credible information demonstrating that the excess charges are attributable to unforeseen 
circumstances that the provider could not have reasonably anticipated when the provider made the good faith estimate.
The Texas Medical Association filed four lawsuits against HHS challenging certain provisions in the IDR rules. The court 
agreed with several of the legal claims asserted by the Texas Medical Association and vacated portions of the HHS rules and 
guidance. As a result, HHS issued new rules and guidance for the IDR process, including updates to the process for the batching 
of claims for IDR and removal of the rebuttable presumption that the QPA is the appropriate payment amount.
HHS appealed the district court’s decision in the second Texas Medical Association case to the United States Court of 
Appeals for Fifth Circuit. In this case, the Texas Medical Association argued that the HHS continued to improperly use the 
QPA as the benchmark rate. On August 2, 2024, the Fifth Circuit issued a decision affirming the district court’s decision in 
favor of Texas Medical Association which vacated HHS’ rules making the QPA a de facto benchmark in the IDR process. The 
Texas Medical Association and HHS also appealed the district court’s decision in the third case to the Fifth Circuit. The Texas 
Medical Association argued in this case that HHS’ rules artificially deflated the amount used in arbitration to decide the 
appropriate out-of-network rate and therefore violated the plain text of the law. On October 30, 2024, the Fifth Circuit partially 
reversed the district court’s decision. The Fifth Circuit rejected the Texas Medical Association’s argument that HHS’ use of 
“ghost rates” (i.e., rates that technically exist, but are not actually billed by providers) in the QPA violates the No Surprises 
Act. Additionally, the Fifth Circuit held that HHS had the authority to exclude case-specific payment agreements and bonus 
payments from the QPA. The Fifth Circuit also affirmed the district court’s decision vacating HHS’ implementation of the 30-
calendar day deadline for insurers to provide an initial payment or notice of denial. Finally, the Fifth Circuit affirmed the 
district court’s holding that plans do not have to disclose additional information regarding QPA calculations. HHS says that it is 
reviewing the Fifth Circuit’s decision and intends to issue further guidance in the near future.
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Compliance Program
Our Compliance Program
We maintain a written code of conduct (the “Code of Conduct”) that provides guidelines for principles and regulatory 
rules that are applicable to our patient care and business activities. The Code of Conduct is reviewed and amended as necessary 
and is the basis for our company-wide compliance program. These guidelines are implemented by our compliance officer, our 
compliance and audit committee, and are communicated to our employees through education and training. We also have 
established a reporting system, auditing and monitoring programs, and a disciplinary system as a means for enforcing the Code 
of Conduct’s policies.
Compliance and Audit Committee
Our compliance and audit committee is made up of members of our senior management and in-house counsel. The 
compliance and audit committee meets, at a minimum, on a quarterly basis and reviews the activities, reports, and operation of 
our compliance program. In addition, our Privacy and Security Committee provides reports to the compliance and audit 
committee. Our senior vice president of compliance and audit services meets with the compliance and audit committee, at a 
minimum, on a quarterly basis to provide an overview of the activities and operation of our compliance program.
Operating Our Compliance Program
We focus on integrating compliance responsibilities with operational functions. We recognize that our compliance with 
applicable laws and regulations depends upon individual employee actions as well as company operations. As a result, we have 
adopted an operations team approach to compliance. Our corporate executives, with the assistance of corporate experts, 
designed the programs of the compliance and audit committee. We utilize facility leaders for employee-level implementation of 
our Code of Conduct. This approach is intended to reinforce our company-wide commitment to operate in accordance with the 
laws and regulations that govern our business.
Compliance Issue Reporting
In order to facilitate our employees’ ability to report known, suspected, or potential violations of our Code of Conduct, we 
have developed a system of reporting. This reporting, anonymous or attributable, may be accomplished through our toll-free 
compliance hotline, compliance e-mail address, or our compliance post office box. Our compliance officer and the compliance 
and audit committee are responsible for reviewing and investigating each compliance incident in accordance with the 
compliance and audit services department’s investigation policy.
Compliance Monitoring and Auditing / Comprehensive Training and Education
Monitoring reports and the results of compliance for each of our business segments are reported to the compliance and 
audit committee, at a minimum, on a quarterly basis. We train and educate our employees regarding the Code of Conduct, as 
well as the legal and regulatory requirements relevant to each employee’s work environment. New and current employees are 
required to acknowledge and certify that the employee has read, understood, and has agreed to abide by the Code of Conduct. 
Additionally, all employees are required to re-certify compliance with the Code of Conduct on an annual basis.
Policies and Procedures Reflecting Compliance Focus Areas
We review our policies and procedures for our compliance program from time to time in order to improve operations and 
to promote compliance with requirements of standards, laws, and regulations and to reflect the ongoing compliance focus areas 
which have been identified by the compliance and audit committee.
Internal Audit
We have a compliance and audit department, which has an internal audit function. Our senior vice president of 
compliance and audit services manages the combined compliance and audit department and meets with the audit and 
compliance committee of our Board of Directors, at a minimum, on a quarterly basis to discuss audit results and provide an 
overview of the activities and operation of our compliance program.
Available Information
We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934 and, in 
accordance therewith, file periodic reports, proxy statements, and other information, including our Code of Conduct, with the 
SEC. Such periodic reports, proxy statements, and other information are available on the SEC’s website at www.sec.gov.
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Our website address is www.selectmedicalholdings.com and can be used to access free of charge, through the investor 
relations section, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any 
amendments to those reports, as soon as reasonably practicable after we electronically file such material with or furnish it to the 
SEC. The information on our website is not incorporated as a part of this annual report.
Executive Officers of the Registrant
The following table sets forth the names, ages and titles, as well as a brief account of the business experience, of each 
person who was an executive officer of the Company as of February 20, 2025:
Name
Age
Position
Robert A. Ortenzio
 
67 
Executive Chairman and Co-Founder
David S. Chernow
 
67 
Chief Executive Officer
Martin F. Jackson
 
70 
Senior Executive Vice President, Strategic Finance and Operations
Michael F. Malatesta
 
55 
Executive Vice President and Chief Financial Officer
John A. Saich
 
56 
President
Thomas P. Mullin
 
41 
President
Michael E. Tarvin
 
64 
Senior Executive Vice President, General Counsel and Secretary
Brian R. Rusignuolo
 
49 
Executive Vice President and Chief Information Officer
Christopher S. Weigl
 
41 
Senior Vice President, Controller and Chief Accounting Officer
Robert G. Breighner, Jr. 
 
55 
Senior Vice President, Compliance and Audit
Robert A. Ortenzio has served as our Executive Chairman and Co-Founder since January 1, 2014. Mr. Ortenzio co-
founded Select and has served as a director of Select since February 1997, and became a director of the Company in February 
2005. Mr. Ortenzio served as the Company’s Chief Executive Officer from January 1, 2005 to December 31, 2013 and as 
Select’s President and Chief Executive Officer from September 2001 to January 1, 2005. Mr. Ortenzio also served as Select’s 
President and Chief Operating Officer from February 1997 to September 2001. Mr. Ortenzio also currently serves on the Board 
of Directors of Concentra Group Holdings Parent. He was an Executive Vice President and a director of Horizon/CMS 
Healthcare Corporation from July 1995 until July 1996. In 1986, Mr. Ortenzio co-founded Continental Medical Systems, Inc., 
and served in a number of different capacities, including as a Senior Vice President from February 1986 until April 1988, as 
Chief Operating Officer from April 1988 until July 1995, as President from May 1989 until August 1996 and as Chief 
Executive Officer from July 1995 until August 1996. Before co-founding Continental Medical Systems, Inc., he was a Vice 
President of Rehab Hospital Services Corporation.
David S. Chernow serves as our Chief Executive Officer. Previously, he served as President and Chief Executive Officer 
from January 2014 to October 2023 and as President from September 2010 to January 2014. Mr. Chernow served as a director 
of the Company from January 2002 until February 2005 and from August 2005 until September 2010. Mr. Chernow also serves 
on the Board of Directors of Concentra Group Holdings Parent. From May 2007 to February 2010, Mr. Chernow served as the 
President and Chief Executive Officer of Oncure Medical Corp., one of the largest providers of free-standing radiation 
oncology care in the United States. From July 2001 to June 2007, Mr. Chernow served as the President and Chief Executive 
Officer of JA Worldwide, a nonprofit organization dedicated to the education of young people about business (formerly, Junior 
Achievement, Inc.). From 1999 to 2001, he was the President of the Physician Services Group at US Oncology, Inc. 
Mr. Chernow co-founded American Oncology Resources in 1992 and served as its Chief Development Officer until the time of 
the merger with Physician Reliance Network, Inc., which created US Oncology, Inc. in 1999.
Martin F. Jackson has served as our Senior Executive Vice President of Strategic Finance and Operations since October 
2023. Previously, he was Executive Vice President and Chief Financial Officer from February 2007 to October 2023, and 
Senior Vice President and Chief Financial Officer from May 1999 to February 2007. Mr. Jackson also serves on the Board of 
Directors of Concentra Group Holdings Parent. Mr. Jackson previously served as a Managing Director in the Health Care 
Investment Banking Group for CIBC Oppenheimer from January 1997 to May 1999. Prior to that time, he served as Senior 
Vice President, Health Care Finance with McDonald & Company Securities, Inc. from January 1994 to January 1997. Prior to 
1994, Mr. Jackson held senior financial positions with Van Kampen Merritt, Touche Ross, Honeywell and L’Nard Associates.
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Michael F. Malatesta has served as our Executive Vice President and Chief Financial Officer since October 2023. 
Previously, he was Senior Vice President of Finance from November 2013 to October 2023. Before that, Mr. Malatesta held the 
positions of Vice President of Outpatient Finance from October 2010 to November 2013, Outpatient Controller from 2002 to 
2010, and Director of Outpatient Revenue Accounting from 2000 to 2002. He began his career at the Company in 1999 as an 
Accounting Manager for NovaCare Rehabilitation. Prior to joining the Company, Mr. Malatesta held financial roles at Tenet 
Healthcare, Health Partners Insurance of Philadelphia and the Graduate Health System. He is a certified public accountant and 
began his career in public accounting at Deloitte & Touche LLP. 
John A. Saich has served as our President since October 2023. Previously, he held the positions of Executive Vice 
President and Chief Administrative Officer from October 2018 to October 2023, and Executive Vice President and Chief 
Human Resources Officer from December 2010 to September 2018. He served as our Senior Vice President, Human Resources 
from February 2007 to December 2010. He served as our Vice President, Human Resources from November 1999 to January 
2007. He joined the Company as Director, Human Resources and HRIS in February 1998. Previously, Mr. Saich served as 
Director of Benefits and Human Resources for Integrated Health Services in 1997 and as Director of Human Resources for 
Continental Medical Systems, Inc. from August 1993 to January 1997.
Thomas P. Mullin has served as President since October 2023. Previously, he was our Executive Vice President of 
Hospital Operations from August 2020 to October 2023, President of the Specialty Hospital Divisions from November 2018 to 
August 2020, and Chief Operating Officer of Specialty Hospitals from January 2018 to November 2018. He served as Chief 
Operating Officer of our CIRH Division from October 2016 to January 2018. Mr. Mullin served as Senior Vice President, 
Business and Market Development in our CIRH Division from July 2015 to September 2016. He served as Regional Vice 
President in our CIRH Division from September 2014 to July 2015. He held other positions in our CIRH Division from June 
2008 to September 2014.
Michael E. Tarvin has served as our Senior Executive Vice President, General Counsel and Secretary since October 2023. 
Previously, he was Executive Vice President, General Counsel and Secretary from February 2007 to October 2023. Mr. Tarvin 
held the positions of Senior Vice President, General Counsel and Secretary from November 1999 to February 2007, and Vice 
President, General Counsel and Secretary from February 1997 to November 1999. He was Vice President—Senior Counsel of 
Continental Medical Systems from February 1993 until February 1997. Prior to that time, he was Associate Counsel of 
Continental Medical Systems from March 1992. Mr. Tarvin was an associate at the Philadelphia law firm of Drinker Biddle & 
Reath LLP from September 1985 until March 1992.
Brian R. Rusignuolo has served as our Executive Vice President and Chief Information Officer since January 2021. 
Previously, he was Senior Vice President and Chief Information Officer from December 2012 to January 2021. Mr. Rusignuolo 
held the positions of Senior Vice President, Information Security from October 2011 to December 2012, and Vice President, 
Information Security from January 2010 to October 2011. Prior to becoming an officer of the Company, he held a variety of 
leadership positions in the Company’s Information Systems Department beginning in January 2001. Earlier in his career, he 
was an Environmental Scientist for DynCorp and a Park Ranger for the National Park Service. Mr. Rusignuolo is committed to 
serving others as a member and leader of professional and community organizations including, the Technology Council of 
Central Pennsylvania, the IT Board of Advisors of Harrisburg University of Science and Technology, and the Penn State 
Harrisburg IT Advisory Board.
Christopher S. Weigl is a certified public accountant who has served as our Senior Vice President, Controller & Chief 
Accounting Officer since March 2023. Prior to that, he served as our Senior Vice President of Corporate Accounting Services 
from August 2022 through February 2023. He served as the Vice President of Finance and Accounting Operations of MedStar 
Health Inc. from June 2016 to July 2022. Prior to that, he was employed by PricewaterhouseCoopers LLP from September 2005 
to June 2016, most recently in the role of Assurance Senior Manager.
Robert G. Breighner, Jr. has served as our Senior Vice President of Compliance and Audit since October 2023. 
Previously, he was Vice President, Compliance and Audit Services from August 2003 to October 2023, and Director of Internal 
Audit from November 2001 to August 2003. Before joining the Company, Mr. Breighner was with Susquehanna Pfaltzgraff Co. 
where he held a variety of leadership roles, including Director of Internal Audit.
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Item 1A.    Risk Factors.
In addition to the factors discussed elsewhere in this Form 10-K, the following are important factors which could cause 
actual results or events to differ materially from those contained in any forward-looking statements made by or on behalf of us.
Risks Related to Our Business
If there are changes in the rates or methods of Medicare reimbursements for our services, our revenue and profitability 
could decline.
Revenues from providing services to patients covered under the Medicare program represented approximately 31%, 31%, 
and 29% of our revenue for the years ended December 31, 2022, 2023, and 2024, respectively. 
In recent years, through legislative and regulatory actions, the federal government has made substantial changes to various 
payment systems under the Medicare program. Reforms or other changes to these payment systems, including modifications to 
the conditions on qualification for payment, bundling payments to cover both acute and post-acute care, or the imposition of 
enrollment limitations on new providers, may be proposed or could be adopted, either by Congress or CMS. 
If revised regulations are adopted, the availability, methods, and rates of Medicare reimbursements for services of the type 
furnished at our facilities could change. Reductions in Medicare reimbursements could also adversely affect payments under 
some of our commercial payor contracts that follow Medicare payment methodologies. For example, the rules and regulations 
related to patient criteria for our critical illness recovery hospitals could become more stringent and reduce the number of 
patients we admit. Some of these changes and proposed changes could adversely affect our business strategy, operations, and 
financial results. In addition, there can be no assurance that any increases in Medicare reimbursement rates established by CMS 
will fully reflect increases in our operating costs. 
Adverse economic conditions including an inflationary economic environment in the U.S. or globally could adversely affect 
us.
Our business is exposed to fluctuating market conditions, including rising interest rates. A continued economic downturn 
or recession, or slowing or stalled recovery therefrom, may have a material adverse effect on our business, financial condition 
or results of operations, as it could negatively impact our current and prospective patients, adversely affect the financial ability 
of health insurers to pay claims, adversely impact our ability to pay our expenses, and limit our ability to obtain financing for 
our operations. 
Healthcare spending in the U.S. could be negatively affected in the event of a downturn in economic conditions. For 
example, patients who have lost their jobs or healthcare coverage may no longer be covered by an employer-sponsored health 
insurance plan and patients reducing their overall spending may elect to decrease the frequency of visits to our facilities or 
forgo elective treatments or procedures, thereby reducing demand for our services. 
Inflation has increased throughout the U.S. economy. In an inflationary environment, we may continue to experience 
increases in the prices of labor and other costs of doing business. Cost increases may outpace our expectations, causing us to 
use our cash and other liquid assets faster than forecasted. If we are unable to successfully manage the effects of inflation, our 
business, operating results, cash flows and financial condition may be adversely affected. 
Labor shortages, increased employee turnover, increases in employee-related costs, and union activity could have adverse 
effects including significant increases in our operating costs.
We have experienced and may continue to experience decreased profitability due to increased employee-related costs. A 
number of factors contribute to increased labor costs, such as constrained staffing due to a shortage of healthcare workers, 
increased dependence on contract clinical workers, the cost of recruiting and training new employees, the cost of retaining 
existing staff, and other government regulations, which include laws and regulations related to workers’ health and safety.
Our critical illness recovery hospitals and our rehabilitation hospitals are highly dependent on nurses and our outpatient 
rehabilitation division is highly dependent on therapists for patient care. The market for qualified healthcare professionals is 
highly competitive. Difficulties in attracting and retaining qualified healthcare personnel can limit our ability to staff our 
facilities. It has also led us to use agency clinical staff in our facilities, which can increase our costs and lower our margins. 
Additionally, the cost of attracting, training, and retaining qualified healthcare personnel may be higher than historical trends 
and, as a result, our profitability could decline. 
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While we have historically experienced some level of ordinary course employee turnover, the continuing impact of the 
COVID-19 pandemic and its aftermath have exacerbated labor shortages and increased employee turnover. Increased employee 
turnover rates within our employee base can lead to decreased efficiency and increased costs, such as increased overtime to 
meet demand, increased compensation and bonuses to attract and retain employees, and incremental training costs.
An overall or prolonged labor shortage, lack of skilled labor, increased employee turnover or continued increase in the 
cost of recruiting and retaining employees could have a material adverse impact on our operations, results of operations, 
liquidity or cash flows.
In addition, United States healthcare providers are continuing to see an increase in the amount of union activity. Though 
we cannot predict the degree to which we will be affected by future union activity, there may be legislative or executive actions 
that could result in increased union activity. 
Public health threats such as a global pandemic, or widespread outbreak of infectious disease, similar to the COVID-19 
pandemic, may create uncertainties about our future operating results and financial conditions.
Public health threats, such as COVID-19 or any other pandemic, may have an impact on our business and results of 
operations, financial position, and cash flows. Prolonged volatility or significant disruption of global financial markets due in 
part to a public health threat could have a negative impact on our business and overall financial position. Other factors and 
uncertainties include, but are not limited to, adverse impacts on patient volumes and revenue, increased operational costs 
associated with operating during and after a pandemic; evolving macroeconomic factors, including general economic 
uncertainty, increased labor costs, and recessionary pressures; capital and other resources needed to respond to a pandemic; 
along with the severity and duration of a pandemic. These risks and their impacts are difficult to predict and could continue to 
otherwise disrupt and adversely affect our operations and our financial performance. 
Unfavorable global economic conditions brought about by material global crises, military conflicts or war, geopolitical and 
trade disputes or other factors, may adversely affect our business and financial results.
Our business may be sensitive to global economic conditions, which can be adversely affected by political and military 
conflict, trade and other international disputes, significant natural disasters (including as a result of climate change) or other 
events that disrupt macroeconomic conditions. 
For example, trade policies and geopolitical disputes (including as a result of China-Taiwan relations) and other 
international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and may adversely 
affect our business. Countries may also adopt other measures, such as controls on imports or exports of goods, technology or 
data, that could adversely impact our operations. 
Further, military conflicts or wars (such as the ongoing conflicts between Russia and Ukraine and Israel and Palestine) can 
cause exacerbated volatility and disruptions to various aspects of the global economy. The uncertain nature, magnitude, and 
duration of hostilities stemming from such conflicts, including the potential effects of sanctions and counter-sanctions, or 
retaliatory cyber-attacks on the world economy and markets, have contributed to increased market volatility and uncertainty, 
which could have an adverse impact on macroeconomic factors that affect our business and operations, such as worldwide 
supply chain issues. It is not possible to predict the short and long-term implications of military conflicts or wars or geopolitical 
tensions which could include further sanctions, uncertainty about economic and political stability, increases in inflation rate and 
energy prices, cyber-attacks, supply chain challenges and adverse effects on currency exchange rates and financial markets.
CMS finalized record increases to the high cost outlier fixed loss amount for LTCH-PPS standard Federal payment rate 
cases in FY 2024 and FY 2025 and, unless there are significant reforms, the fixed loss amount will likely increase again in 
FY 2026, which will result in fewer cases qualifying for high cost outlier payments and often lower payments for the cases 
that do qualify.
Under the LTCH-PPS, CMS makes additional payments to LTCHs for high cost outlier cases that have extraordinarily 
high costs relative to the costs of most discharges. Each year, CMS sets a fixed loss amount that represents the maximum loss 
an LTCH will incur for a case before qualifying for a high cost outlier payment. For each case, CMS determines the high cost 
outlier threshold, which is an amount equal to the LTCH-PPS adjusted Federal payment for the case, plus the fixed loss amount. 
Payments for qualifying high cost outlier cases are based on 80% of the estimated cost of the case above the high cost outlier 
threshold. When CMS increases the fixed loss amount, our LTCHs have fewer cases that qualify for outlier payments and often 
lower payments for the cases that do qualify. In the FY 2024 IPPS/LTCH-PPS Proposed Rule, CMS proposed an unprecedented 
increase to the fixed loss amount, from $38,518 to $94,378. In the FY 2024 IPPS/LTCH-PPS Final Rule, CMS set the fixed loss 
amount at $59,873 after considering comments and making some methodological changes. Although this was a lower fixed loss 
amount than initially proposed, it was still the largest one-year increase to the fixed loss amount for the LTCH-PPS. In the FY 
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2025 IPPS/LTCH-PPS Proposed Rule, CMS proposed another significant increase to the fixed loss amount, to $90,921. 
However, after incorporating more recent data, CMS set the fixed-loss amount at $77,048 in the FY 2025 IPPS/LTCH-PPS 
Final Rule. There are several factors that have likely caused the recent increases to the fixed loss amount, including the 
COVID-19 pandemic, the LTCH-PPS dual payment rate structure with the site neutral payment rate, and inflation. These 
factors may continue to impact the LTCH-PPS rate setting in future years, including the upcoming FY 2026 rate setting for the 
Federal fiscal year that begins on October 1, 2025. As a result, there is a risk that CMS will continue to increase the fixed loss 
amount, which would reduce the Medicare payment for many of the most costly patients treated at our LTCHs. 
The effects of the COVID-19 pandemic on the dataset CMS uses for rate setting is one factor that is contributing to the 
recent increases to the LTCH-PPS high cost outlier fixed loss amount for standard Federal payment rate cases. The standard 
methodology CMS uses to calculate the fixed loss amount is based on claims data that are two years old and cost report data 
that are three years old. Therefore, even though the COVID-19 public health emergency ended on May 11, 2023, the cost report 
data used to calculate the fixed-loss amount will continue to be affected by abnormal LTCH utilization and case-mix that 
occurred during the COVID-19 pandemic until June 2026. As long as CMS uses data impacted by the COVID-19 public health 
emergency and associated waivers, the fixed loss amount will reflect increased costs and utilization patterns that were unique to 
the pandemic. 
Another contributing factor to the recent increases to the fixed loss amount is the dual payment rate structure of the 
LTCH-PPS. CMS has not accounted for the effects of the dual payment rate structure on high cost outliers. The site neutral 
payment rate has significantly reduced the number of standard Federal payment rate cases in the dataset used for setting the 
fixed loss amount and has caused some operators to close LTCHs, which further reduces the dataset. The site neutral payment 
rate also has led to more concentration of patients assigned to DRGs likely to meet the patient criteria. Despite these changes to 
the LTCH-PPS, CMS has not modified its high cost outlier rate setting process to account for their effects.
Finally, recent increases to the fixed loss amount may be attributable to rising inflation in the United States, and in the 
healthcare sector specifically. LTCHs have been subject to relatively large increases in labor, supply, and drug costs in recent 
years. for example, the American Hospital Association found that the growth in hospital labor costs from 2014 to 2023 
significantly outpaced economy-wide inflation over the same period. However, CMS has not directly accounted for these cost 
increases when calculating the fixed loss amount. If CMS does not address these factors, it is likely that the fixed loss amount 
for FY 2026 will increase further, which will reduce the Medicare payment for high cost outlier cases.
CMS changed the criteria for reconciliation of outlier payments, which could lead to more recoupments of Medicare outlier 
payments from our LTCHs.
Our LTCHs receive two types of outlier payments from Medicare: (1) high cost outlier payments, and (2) short stay 
outlier payments. If specific criteria are met, LTCH outlier payments may be subject to reconciliation by the MAC at the time 
of cost report settlement. The MAC will conduct the outlier reconciliation when the criteria are met and will determine if 
Medicare underpaid or overpaid the LTCH for outlier payments during the LTCH’s cost reporting period. If Medicare overpaid 
the LTCH for outlier payments, then the LTCH must repay Medicare the amount of the overpayment, plus an additional 
payment for the time value of money (i.e., interest).
Our LTCH cost reports have been subject to outlier reconciliations in the past and the LTCHs have had to repay 
significant amounts to the Medicare program. For cost reports that started prior to October 1, 2024, the criteria for an outlier 
reconciliation were: (1) a change in the LTCH’s CCR of 10 percentage points or more when comparing the actual CCR to the 
CCR used during the cost reporting period to make outlier payments; and (2) the LTCH received at least $500,000 in outlier 
payments during the cost reporting period. 
CMS recently modified the first criterion for identifying cost reports subject to outlier reconciliation. Beginning with cost 
reporting periods starting on or after October 1, 2024, the first criterion now specifies that the LTCH is subject to reconciliation 
if the actual CCR is found to be plus or minus 20 percent or more from the CCR used during the cost reporting period to make 
outlier payments. CMS did not change the second criterion regarding the outlier payments exceeding $500,000. 
CMS’s change to the first criterion will likely result in the MACs conducting more outlier reconciliations when settling 
our LTCH cost reports. These outlier reconciliations could lead to the MACs recouping payments from our LTCHs if the 
MACs find that the Medicare program overpaid the LTCH for outlier payments during the cost reporting period. Outlier 
reconciliations also delay final settlement of the cost report, which prevents the LTCH from pursuing a reimbursement appeal 
related to its cost report.
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We conduct business in a heavily regulated industry, and changes in regulations, new interpretations of existing regulations, 
or violations of regulations may result in increased costs or sanctions that reduce our revenue and profitability.
The healthcare industry is subject to extensive federal, state, and local laws and regulations relating to: (i) facility and 
professional licensure, including certificates of need; (ii) conduct of operations, including financial relationships among 
healthcare providers, Medicare fraud and abuse, and physician self-referral; (iii) addition of facilities and services and 
enrollment of newly developed facilities in the Medicare program; (iv) payment for services; and (v) safeguarding protected 
health information.
Both federal and state regulatory agencies inspect, survey, and audit our facilities to review our compliance with these 
laws and regulations. While our facilities intend to comply with existing licensing, Medicare certification requirements, and 
accreditation standards, there can be no assurance that these regulatory authorities will determine that all applicable 
requirements are fully met at any given time. A determination by any of these regulatory authorities that a facility is not in 
compliance with these requirements could lead to the imposition of requirements that the facility takes corrective action, 
assessment of fines and penalties, or loss of licensure, Medicare certification, or accreditation. These consequences could have 
an adverse effect on our company.
In addition, there have been heightened coordinated civil and criminal enforcement efforts by both federal and state 
government agencies relating to the healthcare industry. The ongoing investigations relate to, among other things, various 
referral practices, billing practices, and physician ownership. In the future, different interpretations or enforcement of these laws 
and regulations could subject us to allegations of impropriety or illegality or could require us to make changes in our facilities, 
equipment, personnel, services, and capital expenditure programs. These changes may increase our operating expenses and 
reduce our operating revenues. If we fail to comply with these extensive laws and government regulations, we could become 
ineligible to receive government program reimbursement, suffer civil or criminal penalties, or be required to make significant 
changes to our operations. In addition, we could be forced to expend considerable resources responding to any related 
investigation or other enforcement action.
If our critical illness recovery hospitals fail to maintain their certifications as LTCHs or if our facilities operated as HIHs 
fail to qualify as hospitals separate from their host hospitals, our revenue and profitability may decline.
As of December 31, 2024, we operated 104 critical illness recovery hospitals, all of which are currently certified by 
Medicare as LTCHs. LTCHs must meet certain conditions of participation to enroll in, and seek payment from, the Medicare 
program as an LTCH, including, among other things, maintaining an average length of stay for Medicare patients in excess of 
25 days. An LTCH that fails to maintain this average length of stay for Medicare patients in excess of 25 days during a single 
cost reporting period is generally allowed an opportunity to show that it meets the length of stay criteria during a subsequent 
cure period. If the LTCH can show that it meets the length of stay criteria during this cure period, it will continue to be paid 
under the LTCH-PPS. If the LTCH again fails to meet the average length of stay criteria during the cure period, it will be paid 
under the general acute care hospital IPPS at rates generally lower than the rates under the LTCH-PPS.
CMS issued temporary waivers that exempted LTCHs from the 25 day average length of stay requirement for all cost 
reporting periods that included the COVID-19 pandemic public health emergency. Medicare cost reporting periods for our 
LTCHs that began after May 11, 2023, are again required to comply with this rule. See “Management’s Discussion and 
Analysis of Financial Condition and Results of Operations—Regulatory Changes.”
Similarly, our HIHs must meet conditions of participation in the Medicare program and additional criteria establishing 
separateness from the hospital with which the HIH shares space. If our critical illness recovery hospitals fail to meet or maintain 
the standards for certification as LTCHs, they will receive payment under the general acute care hospitals IPPS which is 
generally lower than payment under the system applicable to LTCHs. Payments at rates applicable to general acute care 
hospitals would result in our hospitals receiving significantly less Medicare reimbursement than they currently receive for their 
patient services.
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Decreases in Medicare reimbursement rates received by our outpatient rehabilitation clinics may reduce our future revenue 
and profitability. 
Our outpatient rehabilitation clinics receive payments from the Medicare program under the Medicare physician fee 
schedule. In the calendar year 2024 physician fee schedule final rule, CMS announced that Medicare payments for the therapy 
specialty are expected to decrease 3% in 2024. Congress passed the Health Extenders, Improving Access to Medicare, 
Medicaid, and CHIP, and Strengthening Public Health Act of 2022, which provided a one-time 2.5% increase in payments in 
calendar year 2023 to offset some of the 4.5% cut to payments for therapy and other services paid under the physician fee 
schedule that otherwise would have occurred in calendar year 2023, and a one-time 1.25% increase in payments in calendar 
year 2024. However, these one-time increases have only partially offset CMS’s cuts to the physician fee schedule conversion 
factor. Even with the statutory 1.25% increase, the calendar year 2024 conversion factor was still 3.4% less than the calendar 
year 2023 conversion factor. In the Consolidated Appropriations Act, 2024, Congress replaced the 1.25% increase in payments 
for calendar year 2024 with a 2.93% increase that applied starting on March 9, 2024. For calendar year 2025, CMS calculated 
the physician fee schedule conversion factor without the 1.25% and 2.93% statutory increases. CMS does not expect its policies 
for 2025 will result in any increase or decrease in Medicare payments for the therapy specialty. However, without any further 
Congressional action, the calendar year 2025 conversion factor will be 2.83% less than the calendar year 2024 conversion 
factor.
In addition, the Medicare Access and CHIP Reauthorization Act of 2015 requires that payments under the physician fee 
schedule be adjusted starting in 2019 based on performance in a MIPS and additional incentives for participation in APMs. The 
specifics of the MIPS and incentives for participation in APMs will be subject to future notice and comment rule-making. In 
2019, CMS added physical and occupational therapists to the list of MIPS eligible clinicians. For these therapists in private 
practice, payments under the fee schedule are subject to adjustment in a later year based on their performance in MIPS 
according to established performance standards. Calendar year 2021 was the first year that payments were adjusted, based upon 
the therapist’s performance under MIPS in 2019. Each year from 2019 through 2024 eligible clinicians who receive a 
significant share of their revenues through an advanced APM (such as accountable care organizations or bundled payment 
arrangements) that involves risk of financial losses and a quality measurement component will receive a 5% bonus. As required 
under the Consolidated Appropriations Act, 2023, the bonus payment will be 3.5% in 2025. The Consolidated Appropriations 
Act, 2024 established a 1.88% bonus payment for eligible clinicians in 2026. The bonus payment for APM participation is 
intended to encourage participation and testing of new APMs and to promote the alignment of incentives across payors. 
Providers in facility-based outpatient therapy settings are excluded from MIPS eligibility and therefore not subject to this 
payment adjustment. It is unclear what impact, if any, the MIPS and incentives for participation in alternative payment models 
will have on our business and operating results, but any resulting administrative burden or decrease in payment may reduce our 
future revenue and profitability.
In the calendar year 2022 physician fee schedule final rule, CMS also adopted its plan to transition the MIPS program to 
MVPs. CMS began the transition to MVPs in 2023 with an initial set of MVPs in which reporting is voluntary. In the calendar 
year 2023 physician fee schedule final rule, CMS revised the initial set of MVPs and added five new MVPs. In the same final 
rule, CMS added five new MVPs including the Rehabilitative Support of Musculoskeletal Care MVP that will be applicable to 
physical therapists and occupational therapists. Beginning in 2026, multispecialty groups must form subgroups to report MVPs. 
CMS plans to develop more MVPs from 2024 to 2027 and is considering that MVP reporting could become mandatory in 2029. 
Each MVP includes population health claims-based measures and requires clinicians to report on the Promoting Interoperability 
performance category measures. In addition, MVP participants select certain quality measures and improvement activities and 
then report data for such measures and activities. At this time, the impact that the transition to MVPs will have on our business 
and operating results is unclear, however, any resulting administrative burden or decrease in reimbursement rates may reduce 
our future revenue and profitability.
If our rehabilitation hospitals fail to comply with the 60% Rule or admissions to IRFs are limited due to changes to the 
diagnosis codes on the presumptive compliance list, our revenue and profitability may decline.
As of December 31, 2024, we operated 35 rehabilitation hospitals, 34 of which were certified by Medicare as IRFs. Our 
rehabilitation hospitals must meet certain conditions of participation to enroll in, and seek payment from, the Medicare program 
as an IRF. Among other things, at least 60% of the IRF’s total inpatient population must require treatment for one or more of 
13 conditions specified by regulation. This requirement is now commonly referred to as the “60% Rule.” Compliance with the 
60% Rule is demonstrated through a two-step process. The first step is the “presumptive” method, in which patient diagnosis 
codes are compared to a “presumptive compliance” list. IRFs that fail to demonstrate compliance with the 60% Rule using this 
presumptive test may demonstrate compliance through a second step involving an audit of the facility’s medical records to 
assess compliance.
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If an IRF does not demonstrate compliance with the 60% Rule by either the presumptive method or through a review of 
medical records, then the facility’s classification as an IRF may be terminated at the start of its next cost reporting period 
causing the facility to be paid as a general acute care hospital under IPPS. If our rehabilitation hospitals fail to demonstrate 
compliance with the 60% Rule through both methods and are classified as general acute care hospitals, our revenue and 
profitability may be adversely affected.
CMS issued temporary waivers in response to the COVID-19 pandemic that allowed IRFs, IRF units and hospitals and 
units applying to be classified as IRFs to exclude patients admitted solely to respond to the public health emergency from the 
60% Rule. These waivers expired on May 11, 2023, when the COVID-19 public health emergency ended and admissions to our 
IRFs are once again counted for purposes of the 60% Rule. See “Management’s Discussion and Analysis of Financial 
Condition and Results of Operations—Regulatory Changes.”
As a result of post-payment reviews of claims we submit to Medicare for our services, we may incur additional costs and may 
be required to repay amounts already paid to us.
We are subject to regular post-payment inquiries, investigations, and audits of the claims we submit to Medicare for 
payment for our services. These post-payment reviews include medical necessity reviews for Medicare patients admitted to 
LTCHs and IRFs, and audits of Medicare claims under the Recovery Audit Contractor program. These post-payment reviews 
may require us to incur additional costs to respond to requests for records and to pursue the reversal of payment denials, and 
ultimately may require us to refund amounts paid to us by Medicare that are determined to have been overpaid.
Beginning August 21, 2023, CMS implemented a five-year review choice demonstration (“RCD”) for IRF services in 
Alabama. On March 1, 2024, CMS expanded RCD to IRFs in Pennsylvania. CMS plans to further expand RCD to Texas and 
California, but the timing of this expansion is not known. We operate inpatient rehabilitation hospitals in Pennsylvania, Texas 
and California. CMS has announced it will expand RCD to include additional IRFs based on the Medicare Administrative 
Contractor to which those IRFs submit claims. Under RCD, participating IRFs have an initial choice between pre-claim or post-
payment review of 100% of claims submitted to demonstrate compliance with applicable Medicare coverage and clinical 
documentation requirements. If a certain percentage of the claims reviewed are found to be valid, the IRF may then opt out of 
the 100% review. That percentage will initially be 80% or greater and eventually increase to 90% or greater in subsequent 
review cycles. In opting out, the IRF may elect spot prepayment reviews of samples consisting of 5% of total claims or 
selective post-payment review of a statistically valid random sample. RCD does not create new documentation requirements. 
We cannot predict the impact, if any, the RCD may have on the collectability of our Medicare claims over its five-year term and 
ultimately our financial position, results of operations, and cash flows.
On September 15, 2022, the HHS-OIG updated its work plan to conduct a nationwide audit of IRF claims in order to 
determine the extent to which CMS could clarify the Medicare IRF claim payment criteria. The HHS-OIG expects to issue a 
report on this audit. An HHS-OIG work plan, audit or similar future efforts could result in proposed changes to the payment 
systems for providers or increased denials of Medicare claims for patients notwithstanding the referring physicians’ judgment 
that treatment is appropriate.
CMS has also instructed Medicare Administrative Contractors to conduct targeted probe and educate reviews of 
providers, in which the contractors select providers for up to three rounds of claim reviews. The contractor provides education 
to the provider after each round of review regarding any identified issues. These reviews can be conducted post-payment, but 
the contractors can also subject providers to pre-payment review of claims. In addition to the additional costs and burdens 
discussed above, providers can be further subject to withholding of Medicare payments during this review process.
Most of our critical illness recovery hospitals are subject to short-term leases, and the loss of multiple leases close in time 
could materially and adversely affect our business, financial condition, and results of operations.
We lease most of our critical illness recovery hospitals under short-term leases with terms of less than ten years. These 
leases generally cannot be renewed or extended without the written consent of the landlords thereunder. If we cannot renew or 
extend a significant number of our existing leases, or if the terms for lease renewal or extension offered by landlords on a 
significant number of leases are unacceptable to us, then the loss of multiple leases close in time could materially and adversely 
affect our business, financial condition, and results of operations.
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Our facilities are subject to extensive federal and state laws and regulations relating to the privacy of individually 
identifiable information.
HIPAA required the United States Department of Health and Human Services to adopt standards to protect the privacy 
and security of individually identifiable health information. The department released final regulations containing privacy 
standards in December 2000 and published revisions to the final regulations in August 2002. The privacy regulations 
extensively regulate the use and disclosure of individually identifiable health information. The regulations also provide patients 
with significant new rights related to understanding and controlling how their health information is used or disclosed. The 
security regulations require healthcare providers to implement administrative, physical and technical practices to protect the 
security of individually identifiable health information that is maintained or transmitted electronically. HITECH, which was 
signed into law in February 2009, enhanced the privacy, security, and enforcement provisions of HIPAA by, among other 
things, establishing security breach notification requirements, allowing enforcement of HIPAA by state attorneys general, and 
increasing penalties for HIPAA violations. Violations of HIPAA or HITECH could result in civil or criminal penalties. For 
example, HITECH permits HHS to conduct audits of HIPAA compliance and impose penalties even if we did not know or 
reasonably could not have known about the violation and increases civil monetary penalty amounts up to $71,162 per violation 
with a maximum of $2.1 million in a calendar year for violations of the same requirement.
In addition to HIPAA, there are numerous federal and state laws and regulations addressing patient and consumer privacy 
concerns, including unauthorized access, or theft of patient’s identifiable health information. State statutes and regulations vary 
from state to state. Lawsuits, including class actions and action by state attorneys general, directed at companies that have 
experienced a privacy or security breach also can occur.
In the conduct of our business, we process, maintain, and transmit sensitive data, including our patient’s individually 
identifiable health information. We have developed a comprehensive set of policies and procedures in our efforts to comply 
with HIPAA and other privacy laws. Our compliance officer, privacy officer, and information security officer are responsible 
for implementing and monitoring compliance with our privacy and security policies and procedures at our facilities. We believe 
that the cost of our compliance with HIPAA and other federal and state privacy laws will not have a material adverse effect on 
our business, financial condition, results of operations, or cash flows. However, there can be no assurance that a breach of 
privacy or security will not occur. If there is a breach, we may be subject to various lawsuits, penalties and damages and may be 
required to incur costs to mitigate the impact of the breach on affected individuals.
We may be adversely affected by a security breach of our, or our third-party vendors’, information technology systems, such 
as a cyber attack, which may cause a violation of HIPAA or HITECH and subject us to potential legal and reputational 
harm.
In the normal course of business, our information technology systems hold sensitive patient information including patient 
demographic data, eligibility for various medical plans including Medicare and Medicaid, and protected health information, 
which is subject to HIPAA and HITECH. Additionally, we utilize those same systems to perform our day-to-day activities, such 
as receiving referrals, assigning medical teams to patients, documenting medical information, maintaining an accurate record of 
all transactions, processing payments, and maintaining our employee’s personal information. We also contract with third-party 
vendors to maintain and store our patient’s individually identifiable health information. Numerous state and federal laws and 
regulations address privacy and information security concerns resulting from our access to our patients’ and employees’ 
personal information.
Our information technology systems and those of our vendors that process, maintain, and transmit such data are subject to 
computer viruses, cyber attacks, or breaches. We adhere to policies and procedures reasonably designed to promote compliance 
with HIPAA and other applicable privacy and information security laws. Employees are required to complete annual training 
regarding these laws. Additionally, we perform security risk assessments of third-party vendors and continuously monitor 
compliance with HIPAA and other applicable privacy laws. Failure to maintain the security and functionality of our information 
systems and related software, or to defend a cybersecurity attack or other attempt to gain unauthorized access to our or third-
party’s systems, facilities, or patient health information could expose us to a number of adverse consequences, including but not 
limited to disruptions in our operations, regulatory and other civil and criminal penalties, reputational harm, investigations and 
enforcement actions (including, but not limited to, those arising from the SEC, Federal Trade Commission, the OIG or state 
attorneys general), fines, litigation with those affected by the data breach, loss of customers, disputes with payors, and increased 
operating expense, which either individually or in the aggregate could have a material adverse effect on our business, financial 
position, results of operations, and liquidity. Although we maintain cyber liability insurance to protect us from losses related to 
cyber attacks and breaches, not every risk or liability can be insured, and for risks that are insurable, our policy limits and terms 
of coverage may not be sufficient to cover all actual losses or liabilities incurred. 
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Furthermore, while our information technology systems are maintained with safeguards protecting against cyber attacks, 
including intrusion protection, firewalls, and malware detection, these safeguards do not ensure that a significant cyber attack 
could not occur. A cyber attack that bypasses our information technology security systems, or those of our third-party vendors, 
could cause the loss of protected health information, or other data subject to privacy laws, the loss of proprietary business 
information, or a material disruption to our or a third-party vendor’s information technology business systems resulting in a 
material adverse effect on our business, financial condition, results of operations, or cash flows. In addition, our future results 
could be adversely affected due to the theft, destruction, loss, misappropriation, or release of protected health information, other 
confidential data or proprietary business information, operational or business delays resulting from the disruption of 
information technology systems and subsequent clean-up and mitigation activities, negative publicity resulting in reputation or 
brand damage with clients, members, or industry peers, or regulatory action taken as a result of such incident. We provide our 
employees with training at least annually on important measures they can take to prevent breaches and other cyber threats. We 
routinely identify attempts to gain unauthorized access to our systems. However, given the rapidly evolving nature and 
proliferation of cyber threats, there can be no assurance our training and security measures or other controls will detect, prevent, 
or remediate security or data breaches in a timely manner or otherwise prevent unauthorized access to, damage to, or 
interruption of our systems and operations. For example, it has been widely reported that many well-organized international 
interests, in certain cases with the backing of sovereign governments, are targeting the theft of patient information through the 
use of advance persistent threats. Similarly, in recent years, several hospitals have reported being the victim of ransomware 
attacks in which they lost access to their systems, including clinical systems, during the course of the attacks. While we are not 
aware of having experienced a material cyber breach or attack to date, we are likely to face attempted attacks in the future. 
Accordingly, we may be vulnerable to losses associated with the improper functioning, security breach, or unavailability of our 
information systems as well as any systems used in acquired operations.
Our acquisitions require transitions and integration of various information technology systems, and we regularly upgrade 
and expand our information technology systems’ capabilities. If we experience difficulties with the transition and integration of 
these systems or are unable to implement, maintain, or expand our systems properly, we could suffer from, among other things, 
operational disruptions, regulatory problems, working capital disruptions, and increases in administrative expenses. While we 
make significant efforts to address any information security issues and vulnerabilities with respect to the companies we acquire, 
we may still inherit risks of security breaches or other compromises when we integrate these companies within our business. 
Quality reporting requirements may negatively impact Medicare reimbursement.
The IMPACT Act requires the submission of standardized data by certain healthcare providers. Specifically, the IMPACT 
Act requires, among other significant activities, that LTCHs, IRFs, SNFs, and HHAs report standardized patient assessment 
data to CMS for cross-setting quality measures, resource use measures, and standardized patient assessment data elements. To 
the extent that such reporting requirements have been incorporated into the Medicare quality reporting programs, failure to 
report such data as required will subject providers to a 2% reduction to their annual payment update for the fiscal year that 
follows the reporting period. As CMS adds new measures to the Medicare quality reporting programs to implement the 
IMPACT Act, the burden to report data increases. Moreover, when CMS adds other measures to the quality reporting programs, 
provider reporting obligations become more burdensome. For example, CMS recently added a COVID-19 Vaccination 
Coverage Among Healthcare Personnel measure to the LTCH, IRF, and SNF quality reporting programs. The adoption of 
additional quality reporting measures for our hospitals to track and report will require additional time and expense and could 
affect reimbursement in the future. In healthcare generally, the burdens associated with collecting, recording, and reporting 
quality data are increasing. This includes the additional burden from the fiscal year 2023 IRF-PPS final rule to require IRFs, 
starting with discharges after October 1, 2024, to collect data using the IRF Patient Assessment Instrument for all IRF patients, 
regardless of payer. Currently, CMS only requires IRFs to complete the IRF Patient Assessment Instrument for Medicare 
beneficiaries (Part A and Part C). 
There can be no assurance that all of our hospitals will continue to meet quality reporting requirements in the future which 
may result in one or more of our hospitals seeing a reduction in its Medicare reimbursements. Regardless, we, like other 
healthcare providers, are likely to incur additional expenses in an effort to comply with additional and changing quality 
reporting requirements.
CMS also adopted revised discharge planning requirements for hospitals in 2019 that focus on patients' goals and 
preferences and on preparing them and, as appropriate, their caregivers, to be active partners in their post-discharge care. As 
part of these updates to the discharge planning process, CMS began requiring that hospitals assist patients in selecting a post-
acute care provider by sharing quality measure and resource use measure data from LTCHs, IRFs, SNFs, and HHAs. The 
collection of data for these quality and resource use measures, and the use of these data in the discharge planning process at 
hospitals, has the potential to affect admission patterns at our LTCHs and IRFs.
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CMS has increased several quality reporting program data completion thresholds for certain provider types. Failure to 
meet a quality program data completion threshold may result in CMS reducing the provider’s Medicare payments by 2%. The 
FY 2024 SNF PPS Final Rule increased the SNF QRP data completion threshold from 80% to 90% for Minimum Data Set data 
items beginning with the CY 2024 data collection period. The FY 2024 IPPS/LTCH Final Rule similarly increased the LTCH 
QRP data completion threshold for LTCH Continuity Assessment Record and Evaluation Data Set submissions from 80% to 
85% effective for the CY 2024 data collection period. Increasing the data completion thresholds reduces the margin for error 
when submitting quality reporting program data and increases the risk of CMS applying a 2% penalty to our facilities’ 
Medicare payments. 
We may be adversely affected by negative publicity which can result in increased governmental and regulatory scrutiny and 
possibly adverse regulatory changes.
Negative press coverage, including about the industries in which we currently operate, can result in increased 
governmental and regulatory scrutiny and possibly adverse regulatory changes. Adverse publicity and increased governmental 
scrutiny can have a negative impact on our reputation with referral sources and patients and on the morale and performance of 
our employees, both of which could adversely affect our businesses and results of operations.
Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen 
liabilities.
As part of our growth strategy, we may pursue acquisitions of critical illness recovery hospitals, rehabilitation hospitals, 
outpatient rehabilitation clinics, and other related healthcare facilities and services. These acquisitions, may involve significant 
cash expenditures, debt incurrence, additional operating losses and expenses, and compliance risks that could have a material 
adverse effect on our financial condition and results of operations.
We may not be able to successfully integrate our acquired businesses into ours, and therefore, we may not be able to 
realize the intended benefits from an acquisition. If we fail to successfully integrate acquisitions, our financial condition and 
results of operations may be materially adversely affected. These acquisitions could result in difficulties integrating acquired 
operations, technologies, and personnel into our business. Such difficulties may divert significant financial, operational, and 
managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives. 
We may fail to retain employees or patients acquired through these acquisitions, which may negatively impact the integration 
efforts. These acquisitions could also have a negative impact on our results of operations if it is subsequently determined that 
goodwill or other acquired intangible assets are impaired, thus resulting in an impairment charge in a future period.
In addition, these acquisitions involve risks that the acquired businesses will not perform in accordance with expectations; 
that we may become liable for unforeseen financial or business liabilities of the acquired businesses, including liabilities for 
failure to comply with healthcare regulations; that the expected synergies associated with acquisitions will not be achieved; and 
that business judgments concerning the value, strengths, and weaknesses of businesses acquired will prove incorrect, which 
could have a material adverse effect on our financial condition and results of operations.
Future joint ventures may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities.
As part of our growth strategy, we have partnered and may partner with large healthcare systems to provide post-acute 
care services. These joint ventures have included and may involve significant cash expenditures, debt incurrence, additional 
operating losses and expenses, and compliance risks that could have a material adverse effect on our financial condition and 
results of operations.
A joint venture involves the combining of corporate cultures and mission. As a result, we may not be able to successfully 
operate a joint venture, and therefore, we may not be able to realize the intended benefits. If we fail to successfully execute a 
joint venture relationship, our financial condition and results of operations may be materially adversely affected. A new joint 
venture could result in difficulties in combining operations, technologies, and personnel. Such difficulties may divert significant 
financial, operational, and managerial resources from our existing operations and make it more difficult to achieve our 
operating and strategic objectives. We may fail to retain employees or patients as a result of the integration efforts.
A joint venture is operated through a Board of Directors that contains representatives of Select and other parties to the 
joint venture. We may not control the board of certain joint ventures and, as a result, such joint ventures may take certain 
actions that could have adverse effects on our financial condition and results of operations.
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If we fail to compete effectively with other hospitals, clinics, and healthcare providers in the local areas we serve, our 
revenue and profitability may decline.
The healthcare business is highly competitive, and we compete with other hospitals, rehabilitation clinics, and other 
healthcare providers for patients. If we are unable to compete effectively in the critical illness recovery hospital, rehabilitation 
hospital, and outpatient rehabilitation businesses, our ability to retain customers and physicians, or maintain or increase our 
revenue growth, price flexibility, control over medical cost trends, and marketing expenses may be compromised and our 
revenue and profitability may decline.
Many of our critical illness recovery hospitals and our rehabilitation hospitals operate in geographic areas where we 
compete with at least one other facility that provides similar services.
Our outpatient rehabilitation clinics face competition from a variety of local and national outpatient rehabilitation 
providers, including physician-owned physical therapy clinics, dedicated locally owned and managed outpatient rehabilitation 
clinics, and hospital or university owned or affiliated ventures, as well as national and regional providers in select areas. Other 
competing outpatient rehabilitation clinics in local areas we serve may have greater name recognition and longer operating 
histories than our clinics. The managers of these competing clinics may also have stronger relationships with physicians in their 
communities, which could give them a competitive advantage for patient referrals. Because the barriers to entry are not 
substantial and current customers have the flexibility to move easily to new healthcare service providers, we believe that new 
outpatient physical therapy competitors can emerge relatively quickly.
Future cost containment initiatives undertaken by private third-party payors may limit our future revenue and profitability.
Initiatives undertaken by major insurers and managed care companies to contain healthcare costs affect our profitability. 
These payors attempt to control healthcare costs by contracting with hospitals and other healthcare providers to obtain services 
on a discounted basis. We believe that this trend may continue and may limit reimbursements for healthcare services. If insurers 
or managed care companies from whom we receive substantial payments reduce the amounts they pay for services, our profit 
margins may decline, or we may lose patients if we choose not to renew our contracts with these insurers at lower rates.
If we fail to maintain established relationships with the physicians in the areas we serve, our revenue may decrease.
Our success is partially dependent upon the admissions and referral practices of the physicians in the communities our 
critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics serve, and our ability to maintain 
good relations with these physicians. Physicians referring patients to our hospitals and clinics are generally not our employees 
and, in many of the local areas that we serve, most physicians have admitting privileges at other hospitals and are free to refer 
their patients to other providers. If we are unable to successfully cultivate and maintain strong relationships with these 
physicians, our hospitals’ admissions and our facilities’ and clinics’ businesses may decrease, and our revenue may decline.
Our business operations could be significantly disrupted if we lose key members of our management team.
Our success depends to a significant degree upon the continued contributions of our senior officers and other key 
employees, and our ability to retain and motivate these individuals. We currently have employment agreements in place with 
three executive officers and change in control agreements and/or non-competition agreements with several other officers. Many 
of these individuals also have significant equity ownership in our company. We do not maintain any key life insurance policies 
for any of our employees. The loss of the services of certain of these individuals could disrupt significant aspects of our 
business, could prevent us from successfully executing our business strategy, and could have a material adverse effect on our 
results of operations.
In conducting our business, we are required to comply with applicable laws regarding fee-splitting and the corporate 
practice of medicine.
Some states prohibit the “corporate practice of medicine” that restricts business corporations from practicing medicine 
through the direct employment of physicians or from exercising control over medical decisions by physicians. Some states 
similarly prohibit the “corporate practice of therapy.” The laws relating to corporate practice vary from state to state and are not 
fully developed in each state in which we have facilities. Typically, however, professional corporations owned and controlled 
by licensed professionals are exempt from corporate practice restrictions and may employ physicians or therapists to furnish 
professional services. Also, in some states, hospitals are permitted to employ physicians.
Some states also prohibit entities from engaging in certain financial arrangements, such as fee-splitting, with physicians or 
therapists. The laws relating to fee-splitting also vary from state to state and are not fully developed. Generally, these laws 
restrict business arrangements that involve a physician or therapist sharing medical fees with a referral source, but in some 
states, these laws have been interpreted to extend to management agreements between physicians or therapists and business 
entities under some circumstances.
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We believe that the Company’s current and planned activities do not constitute fee-splitting or the unlawful corporate 
practice of medicine as contemplated by these state laws. However, there can be no assurance that future interpretations of such 
laws will not require structural and organizational modification of our existing relationships with the practices. If a court or 
regulatory body determines that we have violated these laws or if new laws are introduced that would render our arrangements 
illegal, we could be subject to civil or criminal penalties, our contracts could be found legally invalid and unenforceable (in 
whole or in part), or we could be required to restructure our contractual arrangements with our affiliated physicians and other 
licensed providers.
Significant legal actions could subject us to substantial uninsured liabilities.
Physicians, hospitals, and other healthcare providers have become subject to an increasing number of legal actions and 
claims alleging professional malpractice, general liability for property damage, personal and bodily injury, violations of federal 
and state employment laws, often in the form of wage and hour class action lawsuits, and liability for data breaches. Many of 
these actions involve large claims and significant defense costs and sometimes, as in the case of wage and hour class actions, 
are not covered by insurance. We are also subject to lawsuits under federal and state whistleblower statutes designed to combat 
fraud and abuse in the healthcare industry. These whistleblower lawsuits are not covered by insurance and can involve 
significant monetary damages and award bounties to private plaintiffs who successfully bring the suits. See “Item 3.    Legal 
Proceedings.” and Note 20 – Commitments and Contingencies in our audited consolidated financial statements.
We currently maintain professional malpractice liability insurance and general liability insurance coverages through a 
number of different programs that are dependent upon such factors as the state where we are operating and whether the 
operations are wholly owned or are operated through a joint venture. For our wholly owned hospital and outpatient clinic 
operations, we currently maintain insurance coverages under a combination of policies with a total annual aggregate limit of up 
to $42.0 million for professional malpractice liability insurance and $45.0 million for general liability insurance. Our insurance 
for the professional liability coverage is written on a “claims-made” basis, and our commercial general liability coverage is 
maintained on an “occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. For our joint 
venture operations, we have designed a separate insurance program that responds to the risks of specific joint ventures. Most of 
our joint ventures are insured under a master program with an annual aggregate limit of up to $80.0 million, subject to a 
sublimit aggregate ranging from $23.0 million to $33.0 million for most joint ventures. The policies are generally written on a 
“claims-made” basis. Each of these programs has either a deductible or self-insured retention limit. In addition, the Company 
purchases additional primary care limits in certain patient compensation fund states, including Indiana, Kansas, Pennsylvania 
and Wisconsin. We also maintain additional types of liability insurance covering claims which, due to their nature or amount, 
are not covered by or not fully covered by the applicable professional malpractice and general liability insurance policies, 
including workers compensation, property and casualty, directors and officers, cyber liability insurance, and employment 
practices liability insurance coverages. Our insurance policies generally are silent with respect to punitive damages so coverage 
is available to the extent insurance under the law of any applicable jurisdiction and are subject to various deductibles and policy 
limits. We review our insurance program annually and may make adjustments to the amount of insurance coverage and self-
insured retentions in future years. See “Business—Government Regulations—Other Healthcare Regulations”
Concentration of ownership among our existing executives and directors may prevent new investors from influencing 
significant corporate decisions.
Our executives and directors, beneficially own, in the aggregate, approximately 11.56% of Holdings’ outstanding 
common stock as of February 1, 2025. As a result, these stockholders have significant control over our management and 
policies and are able to exercise influence over all matters requiring stockholder approval, including the election of directors, 
amendment of our certificate of incorporation, and approval of significant corporate transactions. The directors elected by these 
stockholders are able to make decisions affecting our capital structure, including decisions to issue additional capital stock, 
implement stock repurchase programs, and incur indebtedness. This influence may have the effect of deterring hostile 
takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders 
to approve transactions that they may deem to be in their best interest.
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If there is later a determination that certain steps of the Separation or the Distribution are taxable because the facts, 
assumptions, representations or undertakings underlying the IRS private letter ruling or any tax opinions are incorrect or 
for any other reason, then the Company and our stockholders could incur significant U.S. federal income tax liabilities and 
Concentra could incur significant liabilities through its indemnification obligations under the Tax Matters Agreement.  
We received a private letter ruling from the IRS substantially to the effect that, among other things, certain steps of the 
Separation together with the Distribution will qualify as a transaction that is tax-free for U.S. federal income tax purposes under 
Section 355 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The Distribution was conditioned on, among 
other things, the continuing effectiveness and validity of our private letter ruling from the IRS and the receipt of favorable 
opinions of our U.S. tax advisors. The private letter ruling and the tax opinions relied on certain facts, assumptions, 
representations and undertakings from us and Concentra regarding the past and future conduct of the companies’ respective 
businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not otherwise 
satisfied, the Company and our stockholders may not be able to rely on the ruling or the opinions of tax advisors and could be 
subject to significant tax liabilities. Notwithstanding the private letter ruling and opinions of tax advisors, the IRS could 
determine on audit that certain steps of the Separation or the Distribution are taxable if it determines that any of these facts, 
assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the 
opinions that are not covered by the private letter ruling, or for other reasons, including as a result of certain significant changes 
in our stock ownership or the stock ownership of Concentra following the completion of the Distribution.
If certain steps of the Separation or the Distribution are determined to be taxable for U.S. federal income tax purposes, 
then the Company or our stockholders could incur significant U.S. federal income tax liabilities and Concentra could also incur 
significant liabilities under the Tax Matters Agreement. Under the Tax Matters Agreement, Concentra will generally be 
required to indemnify us against taxes incurred by the Company arising from any breach of representations made by Concentra 
(including those provided in connection with the private letter ruling from the IRS and opinions from tax advisors) or from 
certain other acts or omissions, in each case that result in certain steps of the Separation or the Distribution failing to meet the 
requirements under Section 355 of the Code. See “Certain Relationships and Related Person Transactions  —  Agreements 
Entered into in Connection with the Separation — Tax Matters Agreement.”
In connection with the Separation, Concentra agreed to indemnify us for certain liabilities. However, we cannot assure you 
that the indemnity will be sufficient to protect us against the full amount of such liabilities or that Concentra’s ability to 
satisfy its indemnification obligation will not be impaired in the future.
Pursuant to the Separation Agreement and certain other agreements we have entered into with Concentra in connection 
with the Separation, Concentra agreed to indemnify us for certain liabilities. However, third parties could also seek to hold us 
responsible for any of the liabilities that Concentra has agreed to retain and we cannot assure you that the indemnity from 
Concentra will be sufficient to protect us against the full amount of such liabilities, or that Concentra will be able to fully satisfy 
its indemnification obligations. In addition, pursuant to the Separation Agreement, Concentra’s self-funded insurance policies 
are not available to us, and Concentra’s third-party insurance policies may not be available to us, for liabilities associated with 
occurrences of indemnified liabilities prior to the Separation, and in any event Concentra’s insurers may deny coverage to us for 
liabilities associated with certain occurrences of indemnified liabilities prior to the Separation. Moreover, even if we ultimately 
succeed in recovering from Concentra or its insurance providers any amounts for which we are held liable, we may be 
temporarily required to bear these losses. The occurrence of any of these events could adversely affect our business, results of 
operations or financial condition.
Our Separation from Concentra and the distribution of Concentra shares to our stockholders may not achieve some or all of 
the anticipated benefits and may adversely affect our business.
On January 3, 2024, we announced that our Board of Directors had unanimously approved the pursuit of the Separation, 
to be effected by way of IPO and spin-off. On July 26, 2024, Concentra completed its IPO and generated proceeds of 
approximately $499.7 million, net of underwriting discounts and commissions. In addition, the underwriters exercised the 
option to purchase an additional 750,000 shares of Concentra’s common stock for proceeds of $16.7 million, net of 
underwriting discounts and commissions. Upon completion of the IPO, we held 104,093,503 shares of Concentra common 
stock, representing approximately 81.74% of the outstanding shares of Concentra common stock. On November 25, 2024, we 
completed the distribution of these 104,093,503 shares to our stockholders, and we no longer own any shares of Concentra 
common stock after the Distribution.
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45

There is a risk that we may not be able to achieve the full strategic, operational and financial benefits to us that were 
anticipated to result from the Separation. In fact, the Distribution may adversely affect our business. Following the Distribution, 
we are a smaller company with a less diversified product portfolio and a narrower business focus. As a result, we may be more 
vulnerable to changing market conditions, which could materially and adversely affect our business, financial condition and 
results of operations. Although Select and Concentra are now two independent companies, our long joint history may cause 
consumers and investors to continue to associate the companies with each other, either positively or negatively. Separating the 
businesses may also eliminate or reduce synergies or economies of scale that existed prior to the Distribution, which could harm 
our business.
We may be exposed to claims and liabilities as a result of the Distribution.
We entered into a separation agreement and various other agreements with Concentra to govern the Distribution and the 
relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and 
could lead to disputes between us and Concentra. The indemnity rights we have against Concentra under the agreements may 
not be sufficient to protect us, for example, if our losses exceeded our indemnity rights or if Concentra did not have the 
financial resources to meet its indemnity obligations. In addition, our indemnity obligations to Concentra may be significant, 
and these risks could negatively affect our results of operations and financial condition. 
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46

Risks Related to Our Capital Structure
Our substantial indebtedness may limit the amount of cash flow available to invest in the ongoing needs of our business.
We have a substantial amount of indebtedness. As of December 31, 2024, we had approximately $1,711.8 million of total 
indebtedness. Our indebtedness could have important consequences to you. For example, it:
•
requires us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, 
reducing the availability of our cash flow to fund working capital, capital expenditures, development activity, 
acquisitions, and other general corporate purposes;
•
increases our vulnerability to adverse general economic or industry conditions;
•
limits our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate;
•
makes us more vulnerable to increases in interest rates, as borrowings under our senior secured credit facilities are at 
variable rates, subject to our interest rate cap agreement;
•
limits our ability to obtain additional financing in the future for working capital or other purposes; and
•
places us at a competitive disadvantage compared to our competitors that have less indebtedness.
Any of these consequences could have a material adverse effect on our business, financial condition, results of operations, 
prospects, and ability to satisfy our obligations under our indebtedness. In addition, there would be a material adverse effect on 
our business, financial condition, results of operations, and cash flows if we were unable to service our indebtedness or obtain 
additional financing, as needed. 
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital 
Resources.”
Our credit facilities and the indenture governing our 6.250% senior notes require us to comply with certain covenants and 
obligations, the default of which may result in the acceleration of certain of our indebtedness. 
In the case of an event of default under the agreements governing our credit facilities or our Indenture (as defined below), 
the lenders or noteholders under such agreements could elect to declare all amounts borrowed, together with accrued and unpaid 
interest and other fees, to be due and payable. If we are unable to obtain a waiver from the requisite lenders or noteholders 
under such circumstances, these lenders or noteholders could exercise their rights, then our financial condition and results of 
operations could be adversely affected, and we could become bankrupt or insolvent.
Our credit agreement contains several covenants such as limitations on mergers, consolidations and dissolutions; sales of 
assets; investments and acquisitions; indebtedness; liens; affiliate transactions; and dividends and restricted payments. Our 
revolving facility also requires us to maintain a leverage ratio (based upon the ratio of indebtedness to consolidated EBITDA as 
defined in the agreements governing our credit facilities), which is tested quarterly. Failure to comply with any of these 
covenants would result in an event of default under our credit facilities. 
As of December 31, 2024, we were required to maintain our leverage ratio (the ratio of total indebtedness to consolidated 
EBITDA for the prior four consecutive fiscal quarters) at less than 7.00 to 1.00. At December 31, 2024, our leverage ratio was 
3.18 to 1.00.
Our indenture, dated December 3, 2024, by and among Select, the guarantors named therein and U.S. Bank National 
Association, as trustee (the “Indenture”), contains covenants that, among other things, limit our ability and the ability of certain 
of our subsidiaries, which unconditionally guarantee on a joint and several basis the senior notes under the Indenture, to (i) 
grant liens on its assets, (ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on 
the ability of Select’s restricted subsidiaries to pay dividends or make other payments, (iv) enter into sale and leaseback 
transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness, 
(vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the proceeds from sales of assets, 
including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. In addition, the Indenture 
requires us, among other things, to provide financial and current reports to holders of the notes or file such reports electronically 
with the SEC. 
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47

Our inability to comply with any of these covenants could result in a default under our credit facilities or our Indenture. In 
the event of any default under the credit facilities, the revolving lenders could elect to terminate borrowing commitments and 
declare all borrowings outstanding, together with accrued and unpaid interest and other fees, to be immediately due and 
payable. In the event of any default under our Indenture, the trustee or holders of 25% of the 6.250% senior notes could declare 
all outstanding notes immediately due and payable. A breach of a covenant under our credit agreement or Indenture could result 
in a default under that debt instrument and, due to cross-default provisions, could result in a default under the other debt 
instrument. A default under our credit facilities or our indenture could have a material adverse effect on our business, financial 
condition, results of operations, prospects, and may even lead to bankruptcy or insolvency.
Payment of interest on, and repayment of principal of, our indebtedness is dependent in part on cash flow generated by our 
subsidiaries.
Payment of interest on, and repayment of, principal of our indebtedness will be dependent in part upon cash flow 
generated by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment, or otherwise. Our 
subsidiaries may not be able to, or be permitted to, make distributions to enable us to make payments in respect of our 
indebtedness. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual 
restrictions may limit our ability to obtain cash from our subsidiaries. In the event that we do not receive distributions from our 
subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. In addition, any payment 
of interest, dividends, distributions, loans, or advances by our subsidiaries to us could be subject to restrictions on dividends or 
repatriation of distributions under applicable local law, monetary transfer restrictions, and foreign currency exchange 
regulations in the jurisdictions in which the subsidiaries operate or under arrangements with local partners. Furthermore, the 
ability of our subsidiaries to make such payments of interest, dividends, distributions, loans, or advances may be contested by 
taxing authorities in the relevant jurisdictions.
Despite our substantial level of indebtedness, we and our subsidiaries may be able to incur additional indebtedness. This 
could further exacerbate the risks described above, especially in the current rising interest rate environment.
We and our subsidiaries may be able to incur additional indebtedness in the future. Although our credit facilities and the 
Indenture contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of 
qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. Also, 
these restrictions do not prevent us or our subsidiaries from incurring obligations that do not constitute indebtedness. As of 
December 31, 2024, we had $453.3 million of availability under our revolving facility (as defined below) (after giving effect to 
$105.0 million of outstanding borrowings and $41.7 million of outstanding letters of credit). In addition, to the extent new debt 
is added to us and our subsidiaries’ current debt levels, the substantial leverage risks described above would increase.
Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may 
detract from our performance to the extent we are exposed to such interest rates and/or volatility. In periods of rising interest 
rates, such as the current interest rate environment, to the extent we borrow money subject to a floating interest rate, our 
operating costs would increase, which could reduce our net income.
We may be unable to refinance our debt on terms favorable to us or at all, which would negatively impact our business and 
financial condition.
We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient 
to meet required payments of principal and interest. While we intend to refinance all of our indebtedness before it matures, 
there can be no assurance that we will be able to refinance any maturing indebtedness, that such refinancing will be on terms as 
favorable to us as the terms of the maturing indebtedness or, if the indebtedness cannot be refinanced, that we will be able to 
otherwise obtain funds by selling assets or raising equity to make required payments on our maturing indebtedness. 
Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon 
refinancing, then the interest expense relating to that refinanced indebtedness would increase. If we are unable to refinance our 
indebtedness at or before maturity or otherwise meet our payment obligations, our business and financial condition will be 
negatively impacted, and we may be in default under our indebtedness. Any default under our credit facilities would permit 
lenders to foreclose on our assets and would also be deemed a default under the Indenture governing our 6.250% senior notes, 
which may also result in the acceleration of that indebtedness.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital 
Resources.”
Item 1B.    Unresolved Staff Comments.
None.
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48

Item 1C.    Cybersecurity.
The proper confidentiality, integrity, and availability of the Company’s information systems are critical to the business. 
Securing the Company’s business information, customer, patient and employee data, and technology systems is essential for the 
continuity of its businesses, meeting applicable regulatory requirements, and maintaining the trust of its stakeholders. As part of 
its enterprise risk management program, the Company has processes in place to assess, identify, and manage material business, 
operational and legal risks from cybersecurity threats. Such risks include business disruption, fraud, extortion, reputational 
harm, violations of laws and regulations, litigation, and harm to employees, patients, customers and business partners.
Cybersecurity Program Overview
The Company’s cybersecurity program is structured around the cybersecurity framework (“Cybersecurity Framework”) of 
the National Institute of Standards and Technology (“NIST”), an agency of the U.S. Department of Commerce. The 
Cybersecurity Framework provides best practices to prevent, detect, identify, respond to, and recover from cyber-attacks. The 
Company’s cybersecurity program involves establishing information security policies, procedures and standards, investing in 
and implementing information protection processes, security measures and technologies, ongoing monitoring of systems and 
networks on which the Company relies, cybersecurity training and collaborating with public and private organizations on cyber 
threat information and best practices. We also assess and identify potential cyber and information security risks relating to third-
party technology providers. These efforts may include due diligence to assess the party’s cybersecurity practices, controls, and 
compliance with relevant statutes and regulations; the use of contractual agreements that outline certain cybersecurity 
requirements; and using outside services to perform ongoing monitoring of select suppliers and third-party service providers. 
We may also collaborate with third-party suppliers to develop and align incident response plans. The Company actively 
monitors the current threat landscape in an effort to identify material risks arising from new and evolving cybersecurity threats. 
The Company engages an external third-party cybersecurity assessor to perform an annual assessment or validation of the 
cybersecurity program in accordance with the Cybersecurity Framework and the HIPAA Security Risk Assessment Tool of the 
U.S. Health and Human Services Office for Civil Rights.
Board Oversight of Cybersecurity Risks
The Board of Directors of the Company provides strategic oversight on cybersecurity matters, including risks associated 
with cybersecurity threats. The Company’s Chief Information Officer (“CIO”) and Chief Information Security Officer 
(“CISO”) provide annual written reports and quarterly briefings on the Company’s cybersecurity program to the Board of 
Directors. They also provide quarterly cybersecurity updates to the Audit and Compliance Committee. The reports to the Board 
of Directors include details and metrics on, among other things, the Company’s quarterly Cybersecurity Framework assessment 
updates, internal and external threat intelligence, quarterly information security program progress, business associate risk 
assessments and ongoing monitoring, company-wide awareness training, device security compliance, routine resilience efforts 
including disaster recovery exercises, tabletop security incident response exercises, and cyber penetration tests.
Management's Role in Cybersecurity Risk Management 
The Company’s management, including the Company’s CIO and CISO, is responsible for assessing and managing 
material risks from cybersecurity threats. The Company’s CIO and CISO each have more than 20 years of experience in 
cybersecurity. The Company provides formalized cybersecurity training for newly-hired employees and annually for existing 
employees. In addition, the Company provides cybersecurity awareness training and education throughout the year. The annual 
cybersecurity training curriculum includes modules on information security, the employee’s role in protecting Company 
information, recognizing different cybersecurity incidents, identifying phishing emails, understanding the appropriate personnel 
to approach with information or questions, and acceptance of the Company’s Information Security Policy. The Company’s 
management is informed of cybersecurity incidents through ongoing monitoring and, in some cases, through receipt of 
notifications from third-party service providers. The CISO maintains and annually updates a Cybersecurity Incident Response 
Plan, which is a guide for the Company’s cybersecurity team to respond effectively to cybersecurity incidents in a coordinated 
manner in the interest of minimizing the risk of harm. The team works with colleagues in various departments throughout the 
Company, including Information Technology, Human Resources, Legal, Risk Management and Compliance, to prevent, 
mitigate and remediate cybersecurity incidents impacting the Company.
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49

Assessment of Cybersecurity Risk
Management continuously assesses the potential impact of risks from cybersecurity threats on the Company, and regularly 
evaluates how such risks could materially affect the Company’s business strategy, operational results, and financial condition. 
As noted above, an assessment of the cybersecurity program leveraging the Cybersecurity Framework is completed annually by 
an independent and qualified external third-party cybersecurity assessor. The Company has not experienced a cybersecurity 
breach or information security breach during the past four fiscal years. The Company, from time to time, has been notified of 
third-party information cybersecurity breaches, but none of them has had a material impact on the Company's operations or 
financial results. The Company annually purchases a cybersecurity risk insurance policy to help defray the costs associated with 
any covered cybersecurity incident. Although the Company did not experience a material cybersecurity incident during the year 
ended December 31, 2024, the scope and impact of any future incident cannot be predicted.
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50

Item 2.    Properties.
We currently lease most of our consolidated facilities, including critical illness recovery hospitals, rehabilitation hospitals, 
outpatient rehabilitation clinics, and our corporate headquarters. We own 21 of our critical illness recovery hospitals, nine of 
our rehabilitation hospitals, and one of our outpatient rehabilitation clinics throughout the United States. As of December 31, 
2024, we leased 83 of our critical illness recovery hospitals, 14 of our rehabilitation hospitals, and 1,616 of our outpatient 
rehabilitation clinics.
We lease our corporate headquarters from companies owned by a related party affiliated with us through common 
ownership or management. As of December 31, 2024, our corporate headquarters is approximately 292,173 square feet and is 
located in Mechanicsburg, Pennsylvania.
The following is a list by state of the number of facilities we operated as of December 31, 2024.
    
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51

 
Critical Illness Recovery 
Hospitals(1)
Rehabilitation 
Hospitals(1)
Outpatient
Rehabilitation Clinics(1)
Total
Facilities
Alabama
 
1 
 
— 
 
15 
 
16 
Alaska
 
— 
 
— 
 
12 
 
12 
Arizona
 
4 
 
4 
 
60 
 
68 
Arkansas
 
1 
 
— 
 
1 
 
2 
California
 
1 
 
1 
 
92 
 
94 
Colorado
 
— 
 
— 
 
50 
 
50 
Connecticut
 
— 
 
— 
 
62 
 
62 
Delaware
 
1 
 
— 
 
13 
 
14 
District of Columbia
 
— 
 
— 
 
3 
 
3 
Florida
 
12 
 
3 
 
132 
 
147 
Georgia
 
4 
 
1 
 
70 
 
75 
Illinois
 
1 
 
— 
 
87 
 
88 
Indiana
 
3 
 
1 
 
43 
 
47 
Iowa
 
2 
 
— 
 
26 
 
28 
Kansas
 
2 
 
— 
 
16 
 
18 
Kentucky
 
2 
 
— 
 
71 
 
73 
Louisiana
 
— 
 
2 
 
2 
 
4 
Maine
 
— 
 
— 
 
34 
 
34 
Maryland
 
— 
 
— 
 
60 
 
60 
Massachusetts
 
— 
 
— 
 
19 
 
19 
Michigan
 
10 
 
— 
 
38 
 
48 
Minnesota
 
1 
 
— 
 
27 
 
28 
Mississippi
 
4 
 
— 
 
1 
 
5 
Missouri
 
3 
 
3 
 
111 
 
117 
Nebraska
 
1 
 
— 
 
1 
 
2 
Nevada
 
— 
 
1 
 
20 
 
21 
New Hampshire
 
— 
 
— 
 
7 
 
7 
New Jersey
 
3 
 
4 
 
168 
 
175 
North Carolina
 
2 
 
— 
 
45 
 
47 
Ohio
 
13 
 
6 
 
107 
 
126 
Oklahoma
 
2 
 
1 
 
30 
 
33 
Oregon
 
— 
 
— 
 
4 
 
4 
Pennsylvania
 
9 
 
2 
 
219 
 
230 
South Carolina
 
2 
 
— 
 
25 
 
27 
South Dakota
 
1 
 
— 
 
— 
 
1 
Tennessee
 
7 
 
— 
 
20 
 
27 
Texas
 
2 
 
5 
 
155 
 
162 
Virginia
 
3 
 
1 
 
43 
 
47 
Washington
 
— 
 
— 
 
13 
 
13 
West Virginia
 
4 
 
— 
 
6 
 
10 
Wisconsin
 
3 
 
— 
 
6 
 
9 
Total Company
 
104 
 
35 
 
1,914 
 
2,053 
_______________________________________________________________________________
(1) 
Includes managed critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics, 
respectively.
Item 3.    Legal Proceedings.
Refer to the “Litigation” section contained within Note 20 – Commitments and Contingencies of the notes to our 
consolidated financial statements included herein.
Item 4.    Mine Safety Disclosures.
None.
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52

PART II
Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Select Medical Holdings Corporation common stock is quoted on the New York Stock Exchange under the symbol 
“SEM.” 
Holders
At the close of business on February 1, 2025, Holdings had 128,962,850 shares of common stock issued and outstanding. 
As of that date, there were 133 registered holders of record. This does not reflect beneficial stockholders who hold their stock in 
nominee or “street” name through brokerage firms.
Dividend Policy
Holdings’ Board of Directors declared the following dividends during the year ended December 31, 2024:
Declaration Date
Record Date
Payment Date
Dividend Per Share
Amount
(in thousands)
February 13, 2024
March 1, 2024
March 13, 2024
$ 
0.125 
$ 
16,045 
May 1, 2024
May 16, 2024
May 30, 2024
$ 
0.125 
$ 
16,254 
July 31, 2024
August 14, 2024
August 30, 2024
$ 
0.125 
$ 
16,194 
October 30, 2024
November 15, 2024
November 26, 2024
$ 
0.125 
$ 
16,124 
There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at 
the discretion of Holdings’ Board of Directors after taking into account various factors, including, but not limited to, our 
financial condition, operating results, available cash and current and anticipated cash needs, the terms of our indebtedness, and 
other factors Holdings’ Board of Directors may deem to be relevant. Additionally, certain contractual agreements we are party 
to, including our credit agreement and the indenture governing our 6.250% senior notes, restrict our capacity to pay dividends.
Securities Authorized For Issuance Under Equity Compensation Plans
For information regarding securities authorized for issuance under equity compensation plans, see Part III “Item 12—
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
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53

Stock Performance Graph
The graph below compares the cumulative total stockholder return on $100 invested at the close of the market on 
December 31, 2019, with dividends being reinvested on the date paid through and including the market close on December 31, 
2024, with the cumulative total return of the same time period on the same amount invested in the Standard & Poor’s 500 Index 
(S&P 500) and the S&P Health Care Services Select Industry Index (SPSIHP). The chart below the graph sets forth the actual 
numbers depicted on the graph.
SEM
SPSIHP
S&P 500
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
$80
$100
$120
$140
$160
$180
$200
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
Select Medical Holdings Corporation (SEM)
$ 
100.00 
$ 
118.51 
$ 
128.59 
$ 
112.79 
$ 
110.62 
$ 
169.23 
S&P Health Care Services Select Industry Index (SPSIHP)
$ 
100.00 
$ 
133.00 
$ 
145.57 
$ 
116.36 
$ 
121.70 
$ 
123.45 
S&P 500
$ 
100.00 
$ 
116.26 
$ 
147.52 
$ 
118.84 
$ 
147.64 
$ 
182.05 
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54

Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Holdings’ Board of Directors authorized a common stock repurchase program to repurchase up to $1.0 billion worth of 
shares of its common stock. The program will remain in effect until December 31, 2025, unless further extended or earlier 
terminated by the Board of Directors. Stock repurchases under this program may be made in the open market or through 
privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. On August 16, 2022, 
Congress passed the Inflation Reduction Act of 2022, which enacted a 1% excise tax on stock repurchases that exceed $1.0 
million, effective January 1, 2023.
The following table provides information regarding repurchases of our common stock during the three months ended 
December 31, 2024.
 
Total Number of 
Shares Purchased
Average Price Paid Per 
Share
Total Number of 
Shares Purchased as 
Part of Publicly 
Announced Plans or 
Programs
Approximate Dollar 
Value of Shares that 
May Yet Be Purchased 
Under Plans or 
Programs
October 1 – October 31, 2024(1)
 
73,877 
$ 
31.74 
 
— 
$ 
399,677,961 
November 1 – November 31, 2024(1)
 
474,083 
 
37.20 
 
— 
 
399,677,961 
December 1 – December 31, 2024
 
— 
 
— 
 
— 
 
399,677,961 
Total
 
547,960 
$ 
35.68 
 
— 
$ 
399,677,961 
_______________________________________________________________________________
(1) 
The shares purchased represent common stock surrendered to us to satisfy tax withholding obligations associated with the 
vesting of restricted shares issued to employees, pursuant to the provisions of our equity incentive plans.
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55

Item 6.    [Reserved]
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56

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read this discussion together with the consolidated financial statements and accompanying notes included 
elsewhere herein.
Overview
We began operations in 1997 and, based on number of facilities, are one of the largest operators of critical illness recovery 
hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States. As of December 31, 2024, we had 
operations in 40 states and the District of Columbia. We operated 104 critical illness recovery hospitals in 29 states, 35 
rehabilitation hospitals in 14 states, and 1,914 outpatient rehabilitation clinics in 39 states and the District of Columbia as of 
December 31, 2024.
On July 26, 2024, Concentra Group Holdings Parent (“Concentra”), a then wholly-owned subsidiary of Select, completed 
an IPO of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public offering price of $23.50 per 
share for net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1 million. In addition, 
the underwriters exercised the option to purchase an additional 750,000 shares of Concentra’s common stock for net proceeds 
of $16.7 million after deducting discounts and commission of $1.0 million. Concentra shares began trading on the New York 
Stock Exchange under the symbol “CON” on July 25, 2024. 
After the closing of the IPO and underwriters option, Select owned 81.74% of the total outstanding shares of Concentra 
common stock. On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of 
Concentra to its stockholders. Holders of the Company’s common stock received 0.806971 shares of Concentra common stock 
for each outstanding share of the Company’s common stock they owned as of the Record Date. Following the completion of the 
distribution, the Company no longer owns any shares of Concentra common stock. The historical results of Concentra (which 
previously represented the Concentra business segment) are reflected as discontinued operations in the Company’s 
Consolidated Financial Statements through the date of the distribution.
Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the 
outpatient rehabilitation segment. We had revenue of $5,187.1 million for the year ended December 31, 2024. Of this total, we 
earned approximately 47% of our revenue from our critical illness recovery hospital segment, approximately 21% from our 
rehabilitation hospital segment, and approximately 24% from our outpatient rehabilitation segment. Our critical illness recovery 
hospital segment consists of hospitals designed to serve the needs of patients recovering from critical illnesses, often with 
complex medical needs, and our rehabilitation hospital segment consists of hospitals designed to serve patients that require 
intensive physical rehabilitation care. Patients are typically admitted to our critical illness recovery hospitals and rehabilitation 
hospitals from general acute care hospitals. Our outpatient rehabilitation segment consists of clinics that provide physical, 
occupational, and speech rehabilitation services. 
Impact of the Change Healthcare Cybersecurity Incident
On February 22, 2024, UnitedHealth Group Incorporated indicated in a Form 8-K filing, that a cyber security threat actor 
had gained access to some of its Change Healthcare information technology systems. Upon receiving notification of the 
incident, we severed connectivity with all Change Healthcare-related systems and we are not aware of any impact on our own 
information technology systems. However, as a result of the incident, certain of our patient billing and collections processes 
were disrupted and alternative platforms needed to be enabled to resume normal patient billing and collections operations. As of 
and for the year ended December 31, 2024, the incident did not have a material impact on our financial condition or operations.
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57

Non-GAAP Measure
We believe that the presentation of Adjusted EBITDA, as defined below, is important to investors because Adjusted 
EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted 
EBITDA is used by management to evaluate financial performance and determine resource allocation for each of our segments. 
Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United 
States of America (“GAAP”). Items excluded from Adjusted EBITDA are significant components in understanding and 
assessing financial performance. Adjusted EBITDA should not be considered in isolation, or as an alternative to, or substitute 
for, income from continuing operations, income from continuing operations before other income and expense, cash flows 
generated by operations, investing or financing activities, or other financial statement data presented in the consolidated 
financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement 
determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be 
comparable to other similarly titled measures of other companies.
We define Adjusted EBITDA as earnings from continuing operations excluding interest, income taxes, depreciation and 
amortization, gain (loss) on early retirement of debt, stock compensation expense, gain (loss) on sale of businesses, and equity 
in earnings (losses) of unconsolidated subsidiaries. We will refer to Adjusted EBITDA throughout the remainder of 
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following table reconciles income from continuing operations, net of tax, to Adjusted EBITDA and should be 
referenced when we discuss Adjusted EBITDA.
 
For the Year Ended December 31,
 
2022
2023
2024
(in thousands)
Income from continuing operations, net of tax
$ 
18,545 
$ 
110,471 
$ 
129,987 
Income tax expense from continuing operations
 
16,723 
 
29,253 
 
44,782 
Interest expense
 
137,470 
 
154,165 
 
128,605 
Equity in earnings of unconsolidated subsidiaries
 
(27,984)  
(41,339)  
(63,904) 
Loss on early retirement of debt
 
— 
 
14,692 
 
28,845 
Income from continuing operations before other income and expense
 
144,754 
 
267,242 
 
268,315 
Stock compensation expense:
 
 
Included in general and administrative
 
30,555 
 
36,041 
 
79,931 
Included in cost of services
 
5,059 
 
7,117 
 
19,283 
Depreciation and amortization
 
132,158 
 
135,691 
 
142,866 
Adjusted EBITDA
$ 
312,526 
$ 
446,091 
$ 
510,395 
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Summary Financial Results
Income from continuing operations, net of tax, was $130.0 million, $110.5 million, and $18.5 million for the years ended 
December 31, 2024, 2023, and 2022, respectively. Income from continuing operations, net of tax, included losses on early 
retirement of debt of $28.8 million and $14.7 million during the years ended December 31, 2024 and 2023, respectively.
The following tables reconcile our segment performance measures to our consolidated operating results for the years 
ended December 31, 2024, 2023, and 2022: 
 
For the Year Ended December 31, 2024
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Revenue
$ 
2,444,196 
$ 
1,110,592 
$ 
1,250,294 
$ 
382,023 
$ 
5,187,105 
Operating expenses
 
(2,145,595) 
 
(864,844) 
 
(1,141,715) 
 
(627,176)  
(4,779,330) 
Depreciation and amortization
 
(69,842) 
 
(28,442) 
 
(36,579) 
 
(8,003)  
(142,866) 
Other operating income
 
3,033 
 
— 
 
(2) 
 
375 
 
3,406 
Income from continuing operations before 
other income and expense
 
231,792 
 
217,306 
 
71,998 
 
(252,781)  
268,315 
Depreciation and amortization
 
69,842 
 
28,442 
 
36,579 
 
8,003 
 
142,866 
Stock compensation expense
 
— 
 
— 
 
— 
 
99,214 
 
99,214 
Adjusted EBITDA
$ 
301,634 
$ 
245,748 
$ 
108,577 
$ 
(145,564) $ 
510,395 
Adjusted EBITDA margin
 12.3 %
 22.1 %
 8.7 %
N/M
 9.8 %
 
For the Year Ended December 31, 2023
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Revenue
$ 
2,299,773 
$ 
979,585 
$ 
1,188,914 
$ 
357,705 
$ 
4,825,977 
Operating expenses
 
(2,053,758) 
 
(758,466) 
 
(1,077,322) 
 
(535,016)  
(4,424,562) 
Depreciation and amortization
 
(63,865) 
 
(28,055) 
 
(35,210) 
 
(8,561)  
(135,691) 
Other operating income
 
— 
 
756 
 
276 
 
486 
 
1,518 
Income from continuing operations before 
other income and expense
 
182,150 
 
193,820 
 
76,658 
 
(185,386)  
267,242 
Depreciation and amortization
 
63,865 
 
28,055 
 
35,210 
 
8,561 
 
135,691 
Stock compensation expense
 
— 
 
— 
 
— 
 
43,158 
 
43,158 
Adjusted EBITDA
$ 
246,015 
$ 
221,875 
$ 
111,868 
$ 
(133,667) $ 
446,091 
Adjusted EBITDA margin
 10.7 %
 22.6 %
 9.4 %
N/M
 9.2 %
 
For the Year Ended December 31, 2022
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Revenue
$ 
2,234,132 
$ 
916,763 
$ 
1,125,282 
$ 
333,002 
$ 
4,609,179 
Operating expenses
 
(2,127,233) 
 
(718,970) 
 
(1,023,422) 
 
(491,096)  
(4,360,721) 
Depreciation and amortization
 
(61,565) 
 
(27,814) 
 
(32,663) 
 
(10,116)  
(132,158) 
Other operating income
 
4,445 
 
241 
 
— 
 
23,768 
 
28,454 
Income from continuing operations before 
other income and expense
 
49,779 
 
170,220 
 
69,197 
 
(144,442)  
144,754 
Depreciation and amortization
 
61,565 
 
27,814 
 
32,663 
 
10,116 
 
132,158 
Stock compensation expense
 
— 
 
— 
 
— 
 
35,614 
 
35,614 
Adjusted EBITDA
$ 
111,344 
$ 
198,034 
$ 
101,860 
$ 
(98,712) $ 
312,526 
Adjusted EBITDA margin
 5.0 %
 21.6 %
 9.1 %
N/M
 6.8 %
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59

The following tables summarize the changes in our segment performance measures for the year-to-date periods specified 
below.
2024 Compared to 2023
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
Change in revenue
 6.3 %
 13.4 %
 5.2 %
 6.8 %
 7.5 %
Change in income from continuing 
operations before other income and expense
 27.3 %
 12.1 %
 (6.1) %
N/M
 0.4 %
Change in Adjusted EBITDA
 22.6 %
 10.8 %
 (2.9) %
N/M
 14.4 %
2023 Compared to 2022
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
Change in revenue
 2.9 %
 6.9 %
 5.7 %
 7.4 %
 4.7 %
Change in income from continuing 
operations before other income and expense
 265.9 %
 13.9 %
 10.8 %
N/M
 84.6 %
Change in Adjusted EBITDA
 121.0 %
 12.0 %
 9.8 %
N/M
 42.7 %
_______________________________________________________________________________
N/M 
Not meaningful.
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Regulatory Changes
The Medicare program reimburses healthcare providers for services furnished to Medicare beneficiaries, which are 
generally persons age 65 and older, those who are chronically disabled, and those suffering from end stage renal disease. The 
program is governed by the Social Security Act of 1965 and is administered primarily by the Department of Health and Human 
Services and CMS. Revenues from providing services to patients covered under the Medicare program represented 
approximately 31%, 31%, and 29% of our revenue for the years ended December 31, 2022, 2023, and 2024, respectively. 
The Medicare program reimburses various types of providers using different payment methodologies. Those payment 
methodologies are complex and are described elsewhere in this report under “Business—Government Regulations.” The 
following is a discussion of some of the more significant healthcare regulatory changes that have affected our financial 
performance in the periods covered by this report or are likely to affect our financial performance and financial condition in the 
future.
Federal Health Care Program Changes in Response to the COVID-19 Pandemic
On January 31, 2020, HHS declared a public health emergency under section 319 of the Public Health Service Act, 42 
U.S.C. § 247d, in response to the COVID-19 outbreak in the United States. The HHS Secretary subsequently renewed the 
public health emergency determination for 90-day periods through May 11, 2023, the end of the public health emergency.
On March 13, 2020, President Trump declared a national emergency due to the COVID-19 pandemic and the HHS 
Secretary authorized the waiver or modification of certain requirements under Medicare, Medicaid, and the CHIP program 
pursuant to section 1135 of the Social Security Act. Under this authority, CMS issued a number of blanket waivers that excused 
health care providers and suppliers from specific program requirements. Our Annual Report on Form 10-K for the year ended 
December 31, 2023 contains a detailed discussion of blanket waivers and other actions by CMS in response to the COVID-19 
pandemic that affected our operations in Part II — Management’s Discussion and Analysis of Financial Condition and Results 
of Operations — Regulatory Changes. 
One of the blanket waivers expanded the types of health care professionals who could furnish telehealth services to 
include all those who are eligible to bill Medicare for their professional services. This allowed health care professionals who 
were previously ineligible to furnish and bill for Medicare telehealth services, including physical therapists, occupational 
therapists, speech language pathologists, and others, to receive payment for Medicare telehealth services. Pursuant to the 
Coronavirus Preparedness and Response Supplemental Appropriations Act, Public Law 116-123, CMS also waived Medicare 
telehealth payment requirements during the emergency so that beneficiaries in all areas of the country (not just rural areas) 
could receive telehealth services, including in their homes. In the Health Extenders, Improving Access to Medicare, Medicaid, 
and CHIP, and Strengthening Public Health Act of 2022, Congress extended to December 31, 2024 several telehealth 
flexibilities that were scheduled to expire 151 days after the end of the COVID-19 public health emergency, including the 
expansion of permitted originating sites for telehealth, expansion of eligible practitioners for furnishing telehealth, and coverage 
of audio-only telehealth services. CMS issued additional waivers to permit more than 150 additional services to be furnished by 
telehealth, allow physicians to monitor patient services remotely, and fulfill face-to-face requirements in IRFs. In the calendar 
year 2025 MPFS final rule, CMS extended some of the telehealth flexibilities through December 31, 2025, including 
regulations that allow (1) the use of real-time audio and visual interactive telecommunications for compliance with the direct 
supervision requirement, and (2) a distant site practitioner to provide telehealth services from their home using their currently 
enrolled practice location. CMS also made a permanent change to the telehealth rules in the calendar year 2025 MPFS final rule 
to allow telehealth to be provided for any service using an audio-only communication technology in certain situations when the 
patient is not able to use video technology. 
Pursuant to the Coronavirus Preparedness and Response Supplemental Appropriations Act, Public Law 116-123, CMS 
also waived Medicare telehealth payment requirements during the emergency so that beneficiaries in all areas of the country 
(not just rural areas) could receive telehealth services, including in their homes. In the Health Extenders, Improving Access to 
Medicare, Medicaid, and CHIP, and Strengthening Public Health Act of 2022, Congress extended to December 31, 2024 
several telehealth flexibilities that were scheduled to expire 151 days after the end of the COVID-19 public health emergency, 
including the expansion of permitted originating sites for telehealth, expansion of eligible practitioners for furnishing telehealth, 
and coverage of audio-only telehealth services. CMS issued additional waivers to permit more than 150 additional services to 
be furnished by telehealth, allow physicians to monitor patient services remotely, and fulfill face-to-face requirements in IRFs. 
In the calendar year 2025 MPFS final rule, CMS extended some of the telehealth flexibilities through December 31, 2025, 
including regulations that allow (1) the use of real-time audio and visual interactive telecommunications for compliance with 
the direct supervision requirement, and (2) a distant site practitioner to provide telehealth services from their home using their 
currently enrolled practice location. CMS also made a permanent change to the telehealth rules in the calendar year 2025 MPFS 
final rule to allow telehealth to be provided for any service using an audio-only communication technology in certain situations 
when the patient is not able to use video technology. 
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Medicare Reimbursement of LTCH Services
The following is a summary of significant regulatory changes to the Medicare prospective payment system for our critical 
illness recovery hospitals, which are certified by Medicare as LTCHs, which have affected our results of operations, as well as 
the policies and payment rates that may affect our future results of operations. Medicare payments to our critical illness 
recovery hospitals are made in accordance with LTCH-PPS. 
Fiscal Year 2023.  On August 10, 2022, CMS published the final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2023 (affecting discharges and cost reporting periods beginning on or after October 1, 2022, through 
September 30, 2023). Certain errors in the final rule were corrected in documents published November 4, 2022, and December 
13, 2022. The standard federal rate for fiscal year 2023 was set at $46,433, an increase from the standard federal rate applicable 
during fiscal year 2022 of $44,714. The update to the standard federal rate for fiscal year 2023 included a market basket 
increase of 4.1%, less a productivity adjustment of 0.3%. The standard federal rate also included an area wage budget neutrality 
factor of 1.0004304. As a result of the CARES Act, LTCH cases were paid at the standard federal rate during the public health 
emergency. When the public health emergency ended on May 11, 2023, CMS returned to using the site-neutral payment rate for 
reimbursement of cases that did not meet the LTCH patient criteria. The fixed-loss amount for high cost outlier cases paid under 
LTCH-PPS was set at $38,518, an increase from the fixed-loss amount in the 2022 fiscal year of $33,015. The fixed-loss 
amount for high cost outlier cases paid under the site-neutral payment rate was set at $38,788, an increase from the fixed-loss 
amount in the 2022 fiscal year of $30,988.
Fiscal Year 2024.  On August 28, 2023, CMS published the final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through 
September 30, 2024). Certain errors in the final rule were corrected in documents published October 4, 2023 and November 9, 
2023. The standard federal rate for fiscal year 2024 was set at $48,117, an increase from the standard federal rate applicable 
during fiscal year 2023 of $46,433. The update to the standard federal rate for fiscal year 2024 included a market basket 
increase of 3.5%, less a productivity adjustment of 0.2%. The standard federal rate also included an area wage budget neutrality 
factor of 1.0031599. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS was set at $59,873, an increase 
from the fixed-loss amount in the 2023 fiscal year of $38,518. The fixed-loss amount for high cost outlier cases paid under the 
site-neutral payment rate was set at $42,750, an increase from the fixed-loss amount in the 2023 fiscal year of $38,788. 
Fiscal Year 2025.  On August 28, 2024, CMS published a final rule updating policies and payment rates for the LTCH-
PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through 
September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. In an interim 
final action document published on October 3, 2024, CMS also made modifications to the fiscal year 2025 policies and 
payment rates as a result of a recent decision issued by the United States Court of Appeals for the District of Columbia Circuit. 
The standard federal rate for fiscal year 2025 is $49,383, an increase from the standard federal rate applicable during fiscal year 
2024 of $48,117. The update to the standard federal rate for fiscal year 2025 includes a market basket increase of 3.5%, less a 
productivity adjustment of 0.5%. The standard federal rate also includes an area wage budget neutrality factor of 0.9964315. 
The fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $77,048, an increase from the fixed-loss amount in 
the 2024 fiscal year of $59,873. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate is 
$46,217, an increase from the fixed-loss amount in the 2024 fiscal year of $42,750. See high cost outlier risk factor within 
“Item 1A.    Risk Factors.
Criteria for Reconciliation of Outlier Payments
Under the LTCH PPS, CMS makes two types of outlier payments to LTCHs. First, CMS makes additional payments to 
LTCHs for high cost outlier cases that have extraordinarily high costs relative to the costs of most discharges. For these cases, 
CMS sets a fixed loss amount each year that represents the maximum loss an LTCH will incur for a case before qualifying for a 
high cost outlier payment. A high cost outlier threshold equal to the LTCH PPS adjusted Federal payment for the case plus the 
fixed loss amount determines when Medicare pays a high cost outlier payment. Such payments are based on 80% of the 
estimated cost of the case above the high cost outlier threshold. Second, CMS reduces payments to LTCHs for patients with a 
relatively short stay, which is defined as a length of stay less than or equal to five-sixths of the geometric average length of stay 
for that particular MS-LTC-DRG. Short stay outlier cases are paid using a per diem rate based on 120% of the MS-LTC-DRG 
specific per diem amount and an IPPS per diem amount. 
Outlier payments made to LTCHs during the cost reporting year may be reconciled at cost report settlement by the 
Medicare Administrative Contractor (“MAC”) if certain criteria are met. According to CMS, the reconciliation of outlier 
payments is intended to account for the fact that the LTCH’s cost-to-charge ratio (“CCR”) used to pay Medicare claims during 
the cost reporting year may differ from the LTCH’s final CCR for the year calculated by the MAC at cost report settlement. The 
outlier reconciliation criteria were: (1) a change in the LTCH’s CCR of 10 percentage points or more when comparing the 
actual CCR to the CCR used during the cost reporting period to make outlier payments; and (2) the LTCH received at least 
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$500,000 in outlier payments during the cost reporting period. If the criteria for outlier reconciliation are met, the MAC will 
conduct an outlier reconciliation to determine whether the LTCH was overpaid or underpaid for outlier cases. If the LTCH was 
overpaid, the LTCH must repay Medicare in the amount of the overpayment plus the time value of money (i.e., interest). If the 
LTCH was underpaid, Medicare must pay the LTCH in the amount of the underpayment plus the time value of money.
On April 26, 2024, CMS issued new guidance in Transmittal 12594 changing the criteria for LTCH outlier 
reconciliations. CMS modified the first criterion to a change in the LTCH’s CCR of 20 percent or more from the CCR used to 
make outlier payments during the cost reporting period. CMS did not change the second criterion for reconciliation that the 
LTCH must have received at least $500,000 in outlier payments during the cost reporting period. The revised policy is effective 
for cost reporting periods beginning on or after October 1, 2024. However, CMS notes that MACs would receive the first cost 
reports subject to the revised policy in March 2026.
Setting the threshold at 20 percent for changes in the hospital’s CCR will result in more outlier reconciliations. This 
increases the likelihood that LTCHs will have a portion of their outlier payments recouped by the MAC at cost report 
settlement. Because outlier reconciliations often delay the final settlement of cost reports, and providers cannot appeal disputed 
reimbursement amounts until the cost report is settled, this new policy will likely result in additional delays of reimbursement 
appeals related to LTCH cost reports.
Medicare Reimbursement of IRF Services
The following is a summary of significant regulatory changes to the Medicare prospective payment system for our 
rehabilitation hospitals, which are certified by Medicare as IRFs, which have affected our results of operations, as well as the 
policies and payment rates that may affect our future results of operations. Medicare payments to our rehabilitation hospitals are 
made in accordance with IRF-PPS.
Fiscal Year 2023.  On August 1, 2022, CMS published the final rule updating policies and payment rates for the IRF-PPS 
for fiscal year 2023 (affecting discharges and cost reporting periods beginning on or after October 1, 2022, through September 
30, 2023). The standard payment conversion factor for discharges for fiscal year 2023 was set at $17,878, an increase from the 
standard payment conversion factor applicable during fiscal year 2022 of $17,240. The update to the standard payment 
conversion factor for fiscal year 2023 included a market basket increase of 4.2%, less a productivity adjustment of 0.3%. CMS 
increased the outlier threshold amount for fiscal year 2023 to $12,526 from $9,491 established in the final rule for fiscal year 
2022.
Fiscal Year 2024.  On August 2, 2023, CMS published the final rule updating policies and payment rates for the IRF-PPS 
for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through September 
30, 2024). Certain errors in the final rule were corrected in a document published on October 4, 2023. The standard payment 
conversion factor for discharges for fiscal year 2024 was set at $18,541, an increase from the standard payment conversion 
factor applicable during fiscal year 2022 of $17,878. The update to the standard payment conversion factor for fiscal year 2024 
included a market basket increase of 3.6%, less a productivity adjustment of 0.2%. CMS decreased the outlier threshold amount 
for fiscal year 2024 to $10,423 from $12,526 established in the final rule for fiscal year 2023.
Fiscal Year 2025.  On August 6, 2024, CMS published the final rule to update policies and payment rates for the IRF-PPS 
for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 
30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. The standard payment 
conversion factor for discharges for fiscal year 2025 was set at $18,907, an increase from the standard payment conversion 
factor applicable during fiscal year 2024 of $18,541. The update to the standard payment conversion factor for fiscal year 2025 
included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. CMS increased the outlier threshold amount 
for fiscal year 2025 to $12,043 from $10,423 established in the final rule for fiscal year 2024.
Medicare Reimbursement of Outpatient Rehabilitation Clinic Services
The Medicare program reimburses outpatient rehabilitation providers based on the MPFS. Outpatient rehabilitation 
providers may enroll in Medicare as institutional outpatient rehabilitation facilities (i.e., rehab agencies) or individual physical 
or occupational therapists in private practice. The majority of our providers are reimbursed through enrolled rehab agencies 
while the remaining balance of our clinicians are enrolled as individual physical or occupational therapists in private practice.  
The following is a summary of significant regulatory changes which have affected our results of operations as well as the 
policies and payment rates that may affect our future results of operations.
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For calendar years 2021 and 2022, CMS’s expected decreases in Medicare reimbursement were mostly offset by one-time 
increases in payments as a result of other legislation passed by Congress. Payments under the 2023 MPFS physician fee 
schedule decreased by 2%, and for calendar year 2024, CMS expected that its final policies for 2024 would result in a 3% 
decrease in Medicare payments for the therapy specialty. In the calendar year 2025 MPFS final rule, CMS calculated the 
payment rates without the one-time increases provided for in legislation. CMS expects that its policies for 2025 will not result 
in any increase or decrease in Medicare payments for the therapy specialty. However, the policies CMS announced in the 
calendar year 2025 MPFS final rule will reduce Medicare payments for the physical and occupational therapy services we 
provide by approximately 3%.
Modifiers to Identify Services of Physical Therapy Assistants or Occupational Therapy Assistants
In the final 2020 MPFS rule, CMS clarified that when the physical therapist is involved for the entire duration of the 
service and the PTA provides skilled therapy alongside the physical therapist, the CQ modifier is not required. Also, when the 
same service (code) is furnished separately by the physical therapist and PTA, CMS applies the de minimis standard to each 15-
minute unit of codes, not on the total physical therapist and PTA time of the service. For dates of service on and after January 1, 
2022, CMS pays for physical therapy and occupational therapy services provided by PTAs and OTAs at 85% of the otherwise 
applicable Part B payment amount. CMS allows a timed service to be billed without the CQ or CO modifier when a PTA or 
OTA participates in providing care, but the physical therapist or occupational therapist meets the Medicare billing requirements 
without including the PTA’s or OTA’s minutes. This occurs when the physical therapist or occupational therapist provides 
more minutes than the 15-minute midpoint. The calendar year 2025 MPFS final rule did not contain any policy changes 
concerning the modifiers for services provided by physical therapy and occupational therapy assistants. 
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Critical Accounting Estimates
Revenue Recognition and Accounts Receivable
Our principal revenue source comes from providing healthcare services to patients. Patient service revenues are 
recognized at an amount equal to the consideration we expect to be entitled to in exchange for providing healthcare services to 
our patients. Revenue earned from these services is variable in nature, as we are required to make judgments that impact the 
transaction price.
We determine the transaction price for services provided to patients who are Medicare beneficiaries using Medicare’s 
prospective payment systems and other payment methods. The expected payment is determined by the level of clinical services 
provided and is sensitive to the patient’s length of stay. Additionally, we are paid by various other non-Medicare payor sources 
including, but not limited to, insurance companies (including Medicare Advantage plans), state Medicaid programs, workers’ 
compensation programs, health maintenance organizations, preferred provider organizations, other managed care companies 
and employers, as well as patients themselves. The transaction price for services provided to non-Medicare patients include 
amounts prescribed by state and federal fee schedules, negotiated contracted amounts, or usual and customary amounts 
associated with the specific payor or based on the service provided. We apply a portfolio approach in determining revenues for 
certain homogeneous non-Medicare patient populations. 
There is variability in the transaction price for services provided to our patients, as the transaction price is impacted by 
several factors, such as the patient’s condition and length of stay, which in turn impact the payment we expect to receive for 
providing such services. Variable consideration included in the transaction price is inclusive of our estimates of implicit 
discounts and other adjustments related to timely filing and documentation denials, out of network adjustments, and medical 
necessity denials, which are estimated using our historical experience. We are also subject to regular post-payment inquiries, 
investigations, and audits of the claims we submit for services provided. Some claims can take several years for resolution and 
may result in adjustments to the transaction price. Management includes in its estimates of the transaction price its expectations 
for these types of adjustments such that the amount of cumulative revenue recognized will not be subject to significant reversal 
in future periods. Historically, adjustments arising from a change in the transaction price have not been significant.
Our accounts receivable is reported at an amount equal to the amount we expect to collect for providing healthcare 
services to our patients. Because our accounts receivable is typically paid for by highly-solvent, creditworthy payors, such as 
Medicare, other governmental programs, and highly-regulated commercial insurers on behalf of the patient, our credit losses are 
infrequent and insignificant in nature; as such, we generally do not recognize allowances for expected credit losses.
Insurance Risk Programs
Under a number of our insurance programs, which include our employee health insurance, workers’ compensation, and 
professional malpractice liability, we are liable for a portion of our losses before we can attempt to recover from the applicable 
insurance carrier. We accrue for losses under an occurrence-based approach, whereby we estimate the losses that will be 
incurred in a respective accounting period. The estimate of losses includes actuarial loss projections of both known claims and 
incurred but not reported claims. These estimates are based on specific claim facts, claim frequency and severity, payment 
patterns for historical claims, and estimates of fees for outside counsel. In addition to the actuarial loss projections, insurance 
premiums and out-of-pocket expenses for the administration and analysis of claims are included in the estimate of losses 
accrued in a respective accounting period. 
We monitor these programs quarterly and revise our estimates as necessary to take into account additional information. 
We recorded a liability of $132.1 million and $141.6 million for our estimated losses under these insurance programs at 
December 31, 2023 and 2024, respectively. We also recorded insurance proceeds receivable of $8.1 million and $8.5 million, 
respectively, at December 31, 2023 and 2024, for liabilities which exceed our deductibles and self-insured retention limits and 
are recoverable through our insurance policies. 
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Goodwill
We operate three reporting units which include the critical illness recovery hospital reporting unit, the rehabilitation 
hospital reporting unit, and the outpatient rehabilitation reporting unit. We assign goodwill to our reporting units based upon the 
specific nature of the business acquired or, when a business combination contains business components related to more than 
one reporting unit, goodwill is assigned to each reporting unit based upon an allocation determined by the relative fair values of 
the business acquired. When we dispose of a business, we allocate a portion of the reporting unit’s goodwill to that business 
based on the relative fair values of the portion of the reporting unit being disposed of and the portion of the reporting unit 
remaining. We evaluate our reporting units on an annual basis and, if our reporting units are reorganized, we reassign goodwill 
based on the relative fair values of the new reporting units. 
We have elected to perform our annual goodwill impairment assessments as of October 1. We also test goodwill for 
impairment when events or conditions occur that might suggest a possible impairment. These events or conditions could include 
a significant change in the business environment, the regulatory environment, or legal factors; a current period operating or cash 
flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant 
portion of a reporting unit.
As of October 1, 2024, we performed a qualitative impairment assessment for the rehabilitation hospital reporting unit, the 
critical illness recovery hospital reporting unit, and the former Concentra reporting unit. When performing the qualitative 
assessment, we apply judgement in determining the events and circumstances that most affect the fair value of the reporting unit 
and in evaluating the significance of those identified events and circumstances in order to determine whether it is more likely 
than not that the fair value of the reporting unit is less than its carrying amount. As part of our qualitative assessments, we 
considered (i) the magnitude of the reporting unit’s excess fair value over its carrying amount from the most recent quantitative 
impairment test, (ii) industry and market conditions, including the impacts of the interest rate environment, (iii) historical 
financial performance, including our revenue, earnings, and operating cash flow growth trends, (iv) our forecasts of revenue, 
earnings, and operating cash flows, (v) cost factors, including the effects of inflation and rising prices, (vi) the regulatory 
environment, including reimbursement and compliance requirements such as those that exist under the Medicare program, (vii) 
other factors specific to each reporting unit, such as a change in strategy, a change in management, or acquisitions and 
divestitures affecting the composition of the reporting unit and its future operating results, and (viii) consideration of changes in 
our market capitalization. Historically, each reporting unit’s fair value has significantly exceeded its carrying amount.
We performed a quantitative impairment assessment for the outpatient rehabilitation reporting unit as of October 1, 2024, 
to assess the impact of the current operating performance as compared to historical operating trends on the estimated fair value 
of the reporting unit. We used the income approach in determining the fair value of the outpatient rehabilitation reporting unit. 
Included in the income approach are assumptions regarding revenue growth rates, future Adjusted EBITDA margin estimates, 
future capital expenditure requirements, the industry’s weighted average cost of capital, and industry specific, market 
observable implied Adjusted EBITDA multiples. We also include estimated residual values at the end of the forecast period. In 
establishing our assumptions, we consider current industry and market conditions; historical financial performance, including 
our revenue, earnings, and operating cash flow growth trends; cost factors, including the effects of inflation and rising prices; 
and the regulatory environment, including reimbursement and compliance requirements such as those that exist under the 
Medicare program. If any one of the above assumptions or judgments used to estimate the fair value of the reporting unit fails 
to materialize, the resulting decline in our estimated fair value could result in an impairment charge to the goodwill associated 
with the outpatient rehabilitation reporting unit. 
Our annual assessment did not indicate that goodwill impairment was likely for any of our reporting units. We did not 
identify any goodwill impairment events during the quarter ended December 31, 2024.
We have recorded total goodwill of $2.3 billion at December 31, 2024, of which $1.2 billion related to our critical illness 
recovery hospital reporting unit, $497.1 million related to our rehabilitation hospital reporting unit, and $668.9 million related 
to our outpatient rehabilitation reporting unit.
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66

Operating Statistics
The following table sets forth operating statistics for each of our segments for the periods presented. The operating statistics 
reflect data for the period of time we managed these operations. Our operating statistics include metrics we believe provide 
relevant insight about the number of facilities we operate, volume of services we provide to our patients, and average payment 
rates for services we provide. These metrics are utilized by management to monitor trends and performance in our businesses and 
therefore may be important to investors because management may assess our performance based in part on such metrics. Other 
healthcare providers may present similar statistics, and these statistics are susceptible to varying definitions. Our statistics as 
presented may not be comparable to other similarly titled statistics of other companies.
For the Year Ended December 31,
 
2022
2023
2024
Critical illness recovery hospital data:
 
 
 
Number of consolidated hospitals—start of period(1)
 
104 
 
103 
 
107 
Number of hospitals acquired
 
2 
 
2 
 
— 
Number of hospital start-ups
 
1 
 
4 
 
1 
Number of hospitals closed/sold
 
(4) 
 
(2) 
 
(4) 
Number of consolidated hospitals—end of period(1)
 
103 
 
107 
 
104 
Available licensed beds(3)
 
4,386 
 
4,538 
 
4,450 
Admissions(3)(4)
 
36,594 
 
36,225 
 
35,784 
Patient days(3)(5)
 
1,127,911 
 
1,108,492 
 
1,118,757 
Average length of stay (days)(3)(6)
 
31 
 
31 
 
31 
Revenue per patient day(3)(7)
$ 
1,973 
$ 
2,067 
$ 
2,177 
Occupancy rate(3)(8)
 69 %
 68 %
 68 %
Percent patient days—Medicare(3)(9)
 39 %
 38 %
 35 %
Rehabilitation hospital data:
Number of consolidated hospitals—start of period(1)
 
20 
 
20 
 
21 
Number of hospitals acquired
 
— 
 
1 
 
1 
Number of hospital start-ups
 
— 
 
— 
 
1 
Number of hospitals closed/sold
 
— 
 
— 
 
— 
Number of consolidated hospitals—end of period(1)
 
20 
 
21 
 
23 
Number of unconsolidated hospitals managed—end of period(2)
 
11 
 
12 
 
12 
Total number of hospitals (all)—end of period
 
31 
 
33 
 
35 
Available licensed beds(3)
 
1,391 
 
1,479 
 
1,639 
Admissions(3)(4)
 
29,736 
 
31,627 
 
33,665 
Patient days(3)(5)
 
430,547 
 
446,145 
 
470,594 
Average length of stay (days)(3)(6)
 
15 
 
14 
 
14 
Revenue per patient day(3)(7)
$ 
1,953 
$ 
2,017 
$ 
2,134 
Occupancy rate(3)(8)
 85 %
 85 %
 84 %
Percent patient days—Medicare(3)(9)
 48 %
 49 %
 48 %
Outpatient rehabilitation data:
 
 
 
Number of consolidated clinics—start of period
 
1,572 
 
1,622 
 
1,633 
Number of clinics acquired
 
30 
 
16 
 
11 
Number of clinic start-ups
 
44 
 
37 
 
17 
Number of clinics closed/sold
 
(24) 
 
(42) 
 
(44) 
Number of consolidated clinics—end of period
 
1,622 
 
1,633 
 
1,617 
Number of unconsolidated clinics managed—end of period
 
306 
 
300 
 
297 
Total number of clinics (all)—end of period
 
1,928 
 
1,933 
 
1,914 
Number of visits(3)(10)
 
9,573,980 
 
10,657,558 
 
11,147,920 
Revenue per visit(3)(11)
$ 
103 
$ 
100 
$ 
101 
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67

_______________________________________________________________________________
(1)
Represents the number of hospitals included in our consolidated financial results at the end of each period presented.
(2)
Represents the number of hospitals which are managed by us at the end of each period presented. We have minority 
ownership interests in these businesses.
(3)
Data excludes locations managed by the Company.
(4)
Represents the number of patients admitted to our hospitals during the periods presented. 
(5)
Each patient day represents one patient occupying one bed for one day during the periods presented. 
(6)
Represents the average number of days in which patients were admitted to our hospitals. Average length of stay is 
calculated by dividing the number of patient days, as presented above, by the number of patients discharged from our 
hospitals during the periods presented. 
(7)
Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by 
dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at our 
hospitals, by the total number of patient days.
(8)
Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is 
calculated using the number of patient days, as presented above, divided by the total number of bed days available during 
the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods 
presented. 
(9)
Represents the portion of our patient days which are paid by Medicare. The Medicare patient day percentage is 
calculated by dividing the total number of patient days which are paid by Medicare by the total number of patient days, 
as presented above. 
(10)
Represents the number of visits in which patients were treated at our outpatient rehabilitation clinics during the periods 
presented.
(11)
Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing 
patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits.
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68

Results of Operations
The following table outlines selected operating data as a percentage of revenue for the periods indicated:
 
For the Year Ended December 31,
 
2022
2023
2024
Revenue
 100.0 %
 100.0 %
 100.0 %
Costs and expenses:
Cost of services, exclusive of depreciation and amortization(1)
 91.3 
 88.2 
 87.8 
General and administrative
 3.3 
 3.5 
 4.4 
Depreciation and amortization
 2.9 
 2.8 
 2.8 
Total costs and expenses
 97.5 
 94.5 
 95.0 
Other operating income
 0.6 
 — 
 0.2 
Income from continuing operations before other income and expense
 3.1 
 5.5 
 5.2 
Loss on early retirement of debt
 — 
 (0.3) 
 (0.6) 
Equity in earnings of unconsolidated subsidiaries
 0.6 
 0.9 
 1.2 
Interest expense
 (2.9) 
 (3.2) 
 (2.4) 
Income from continuing operations before income taxes
 0.8 
 2.9 
 3.4 
Income tax expense from continuing operations
 0.4 
 0.6 
 0.9 
Income from continuing operations, net of tax
 0.4 
 2.3 
 2.5 
Discontinued operations:
Income from discontinued business
 4.9 
 5.0 
 4.3 
Income tax expense from discontinued business
 1.0 
 1.1 
 1.1 
Income from discontinued operations, net of tax
 3.9 
 3.9 
 3.2 
Net income
 4.3 
 6.2 
 5.7 
Net income attributable to non-controlling interests
 0.9 
 1.2 
 1.6 
Net income attributable to Select Medical Holdings Corporation
 3.4 %
 5.0 %
 4.1 %
_______________________________________________________________________________
(1)
Cost of services includes personnel expense, facilities expense, and other operating costs.
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69

The following table summarizes selected financial data by segment for the periods indicated:
Year Ended December 31,
 
2022
2023
2024
% Change
2022 – 2023
% Change
2023 – 2024
(in thousands, except percentages)
Revenue:
 
 
 
 
 
Critical illness recovery hospital
$ 
2,234,132 
$ 
2,299,773 
$ 
2,444,196 
 2.9 %
 6.3 %
Rehabilitation hospital
 
916,763 
 
979,585 
 
1,110,592 
 6.9 
 13.4 
Outpatient rehabilitation
 
1,125,282 
 
1,188,914 
 
1,250,294 
 5.7 
 5.2 
Other(1)
 
333,002 
 
357,705 
 
382,023 
 7.4 
 6.8 
Total Company
$ 
4,609,179 
$ 
4,825,977 
$ 
5,187,105 
 4.7 %
 7.5 %
Income (loss) from continuing operations before other 
income and expense:(2)
 
 
 
Critical illness recovery hospital
$ 
49,779 
$ 
182,150 
$ 
231,792 
 265.9 %
 27.3 %
Rehabilitation hospital
 
170,220 
 
193,820 
 
217,306 
 13.9 
 12.1 
Outpatient rehabilitation
 
69,197 
 
76,658 
 
71,998 
 10.8 
 (6.1) 
Other(1)
 
(144,442) 
 
(185,386) 
 
(252,781) 
N/M
N/M
Total Company
$ 
144,754 
$ 
267,242 
$ 
268,315 
 84.6 %
 0.4 %
Adjusted EBITDA:(2)
 
 
 
Critical illness recovery hospital
$ 
111,344 
$ 
246,015 
$ 
301,634 
 121.0 %
 22.6 %
Rehabilitation hospital
 
198,034 
 
221,875 
 
245,748 
 12.0 
 10.8 
Outpatient rehabilitation
 
101,860 
 
111,868 
 
108,577 
 9.8 
 (2.9) 
Other(1)
 
(98,712) 
 
(133,667) 
 
(145,564) 
N/M
N/M
Total Company
$ 
312,526 
$ 
446,091 
$ 
510,395 
 42.7 %
 14.4 %
Adjusted EBITDA margins:(2)
 
 
 
 
Critical illness recovery hospital
 5.0 %
 10.7 %
 12.3 %
Rehabilitation hospital
 21.6 
 22.6 
 22.1 
 
 
Outpatient rehabilitation
 9.1 
 9.4 
 8.7 
 
 
Other(1)
N/M
N/M
N/M
 
 
Total Company
 6.8 %
 9.2 %
 9.8 %
 
 
Total assets:
 
 
 
 
Critical illness recovery hospital
$ 
2,484,542 
$ 
2,496,886 
$ 
2,654,474 
Rehabilitation hospital
 
1,200,767 
 
1,233,888 
 
1,366,922 
 
 
Outpatient rehabilitation
 
1,371,123 
 
1,380,447 
 
1,404,379 
 
 
Other(1)
 
327,214 
 
248,204 
 
182,176 
 
 
Total Company
$ 
5,383,646 
$ 
5,359,425 
$ 
5,607,951 
 
 
Purchases of property, equipment and other assets:
 
 
 
 
Critical illness recovery hospital
$ 
79,524 
$ 
93,036 
$ 
65,861 
Rehabilitation hospital
 
14,426 
 
21,922 
 
53,620 
 
 
Outpatient rehabilitation
 
40,677 
 
38,776 
 
36,142 
 
 
Other(1)
 
9,762 
 
6,126 
 
3,285 
 
 
Total Company
$ 
144,389 
$ 
159,860 
$ 
158,908 
 
 
_______________________________________________________________________________
(1)
Other includes our corporate administration and shared services, as well as employee leasing services with our non-
consolidating subsidiaries. Total assets include certain non-consolidating joint ventures and minority investments in 
other healthcare related businesses.
(2)
For the years ended December 31, 2024, 2023, and 2022, we recognized other operating income of $3.4 million, $1.5 
million, and $28.5 million, respectively. The impact of this income on the operating results of our segments and other 
activities is outlined within the tables presented under “Summary Financial Results.”
N/M  
Not meaningful.
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70

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
For the year ended December 31, 2024, we had revenue of $5,187.1 million and income from continuing operations 
before other income and expense of $268.3 million, as compared to revenue of $4,826.0 million and income from continuing 
operations before other income and expense of $267.2 million for the year ended December 31, 2023. For the year ended 
December 31, 2024, Adjusted EBITDA was $510.4 million, with an Adjusted EBITDA margin of 9.8%, as compared to 
Adjusted EBITDA of $446.1 million and an Adjusted EBITDA margin of 9.2% in the prior year.
The improvement in our financial performance for the year ended December 31, 2024, as compared to the year ended 
December 31, 2023, was principally attributable to the increase in revenue in our Critical Illness Recovery Hospital and 
Rehabilitation Hospital segments, as discussed below under “Revenue.”
Revenue
Critical Illness Recovery Hospital Segment.  Revenue increased 6.3% to $2,444.2 million for the year ended 
December 31, 2024, compared to $2,299.8 million for the year ended December 31, 2023. The increase was attributable to 
revenue per patient day, which increased 5.3% to $2,177 for the year ended December 31, 2024, compared to $2,067 for the 
year ended December 31, 2023. Our patient days increased 0.9% to 1,118,757 for the year ended December 31, 2024, compared 
to 1,108,492 patient days for the year ended December 31, 2023. Occupancy in our critical illness recovery hospitals was 68% 
for the years ended December 31, 2024 and 2023. 
Rehabilitation Hospital Segment.  Revenue increased 13.4% to $1,110.6 million for the year ended December 31, 2024, 
compared to $979.6 million for the year ended December 31, 2023. Our revenue per patient day increased 5.8% to $2,134 for 
the year ended December 31, 2024, compared to $2,017 for the year ended December 31, 2023. Our patient days increased 
5.5% to 470,594 days for the year ended December 31, 2024, compared to 446,145 days for the year ended December 31, 2023. 
Occupancy in our rehabilitation hospitals was 84% for the year ended December 31, 2024, compared to 85% for the year ended 
December 31, 2023.
Outpatient Rehabilitation Segment.  Revenue increased 5.2% to $1,250.3 million for the year ended December 31, 2024, 
compared to $1,188.9 million for the year ended December 31, 2023. The increase was principally attributable to patient visits, 
which increased 4.6% to 11,147,920 for the year ended December 31, 2024, compared to 10,657,558 visits for the year ended 
December 31, 2023. Our revenue per visit increased 1.0% to $101 for the year ended December 31, 2024, compared to $100 for 
the year ended December 31, 2023.
Operating Expenses
Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating 
expenses were $4,779.3 million, or 92.2% of revenue, for the year ended December 31, 2024, compared to $4,424.6 million, or 
91.7% of revenue, for the year ended December 31, 2023. Our cost of services, a major component of which is labor expense, 
was $4,553.5 million, or 87.8% of revenue, for the year ended December 31, 2024, compared to $4,254.4 million, or 88.2% of 
revenue, for the year ended December 31, 2023. General and administrative expenses were $225.9 million, or 4.4% of revenue, 
for the year ended December 31, 2024, compared to $170.2 million, or 3.5% of revenue, for the year ended December 31, 2023. 
The increase in general and administrative expenses relative to our revenue was principally attributable to the accelerated 
recognition of $33.4 million of stock compensation expense recognized as a result of modifications to the restricted stock 
awards, as described in Note 17 - Stock-based Compensation.
Other Operating Income
For the year ended December 31, 2024, we had other operating income of $3.4 million, compared to $1.5 million for the 
year ended December 31, 2023.
Adjusted EBITDA
Critical Illness Recovery Hospital Segment.  Adjusted EBITDA increased 22.6% to $301.6 million for the year ended 
December 31, 2024, compared to $246.0 million for the year ended December 31, 2023. Our Adjusted EBITDA margin for the 
critical illness recovery hospital segment was 12.3% for the year ended December 31, 2024, compared to 10.7% for the year 
ended December 31, 2023. The increases in our Adjusted EBITDA and Adjusted EBITDA margin during the year ended 
December 31, 2024, as compared to the year ended December 31, 2023, were principally attributable an increase in net revenue. 
Rehabilitation Hospital Segment.  Adjusted EBITDA increased 10.8% to $245.7 million for the year ended December 31, 
2024, compared to $221.9 million for the year ended December 31, 2023. Our Adjusted EBITDA margin for the rehabilitation 
hospital segment was 22.1% for the year ended December 31, 2024, compared to 22.6% for the year ended December 31, 2023. 
The increase in Adjusted EBITDA was principally due to an increase in revenue.
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71

Outpatient Rehabilitation Segment.  Adjusted EBITDA was $108.6 million for the year ended December 31, 2024, 
compared to $111.9 million for the year ended December 31, 2023. Our Adjusted EBITDA margin for the outpatient 
rehabilitation segment was 8.7% for the year ended December 31, 2024, compared to 9.4% for the year ended December 31, 
2023. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin for the year ended December 31, 2024, as 
compared to the year ended December 31, 2023, were principally attributable to higher labor costs, partially offset by an 
increase in revenue.
Depreciation and Amortization
Depreciation and amortization expense was $142.9 million for the year ended December 31, 2024, compared to $135.7 
million for the year ended December 31, 2023.
Income from Continuing Operations before Other Income and Expense
For the year ended December 31, 2024, we had income from operations from continuing operations before other income 
and expense of $268.3 million, compared to $267.2 million for the year ended December 31, 2023.
Loss on Early Retirement of Debt
For the year ended December 31, 2024, we had a loss on early retirement of debt of $28.8 million related to the 
prepayment on our term loan, the amendments to the Select credit agreement, and the refinancing of our senior notes, as 
described in Note 12 - Long-Term Debt and Notes Payable. For the year ended December 31, 2023, we had a loss on early 
retirement of debt of $14.7 million related to an amendment to the Select credit agreement.
Equity in Earnings of Unconsolidated Subsidiaries
For the year ended December 31, 2024, we had equity in earnings of unconsolidated subsidiaries of $63.9 million, 
compared to $41.3 million for the year ended December 31, 2023. The increase in equity in earnings of unconsolidated 
subsidiaries is principally due to a gain of $14.6 million recognized upon gaining a controlling financial interest in a previously 
unconsolidated entity. Additionally, we had improved operating performance of our rehabilitation businesses in which we are a 
minority owner.
Interest
Interest expense was $128.6 million for the year ended December 31, 2024, compared to $154.2 million for the year 
ended December 31, 2023. The decrease in interest expense was principally due to the reduction in total debt as a result of the 
financing transactions, as described in Note 12. Long-Term Debt and Notes Payable.
Income Tax Expense from Continuing Operations
We recorded income tax expense of $44.8 million for the year ended December 31, 2024, which represented an effective 
tax rate of 25.6%. We recorded income tax expense of $29.3 million for the year ended December 31, 2023, which represented 
an effective tax rate of 20.9%. For the year ended December 31, 2024, the higher effective tax rate primarily resulted from a 
limitation on deductibility of officer’s compensation associated with the restricted stock award modifications as described in 
Note 17 - Stock-based Compensation. Additionally, our effective tax rate for the year ended December 31, 2023 was lower 
partially due to a reduction in the state tax rates used in evaluating our net deferred tax liabilities.
Refer to Note 18 – Income Taxes of the notes to our consolidated financial statements included herein for the 
reconciliations of the statutory federal income tax rate to our effective income rate for the years ended December 31, 2024 and 
2023.
Income from Discontinued Operations, Net of Tax
For the year ended December 31, 2024, we had income from discontinued operations, net of tax, of $166.7 million, 
compared to $189.3 million for the year ended December 31, 2023. Discontinued operations for both periods represent the 
operations of Concentra. The common stock of Concentra was distributed to Select stockholders on November 25, 2024, as 
discussed in “Overview.” The decrease in income from discontinued operations, net of tax, was primarily due to the 
$16.3 million of transaction costs included within discontinued operations, as discussed in Note 2 - Acquisitions and 
Dispositions.
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72

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
For the year ended December 31, 2023, we had revenue of $4,826.0 million and income from continuing operations 
before other income and expense of $267.2 million, as compared to revenue of $4,609.2 million and income from continuing 
operations before other income and expense of $144.8 million for the year ended December 31, 2022. For the year ended 
December 31, 2023, Adjusted EBITDA was $446.1 million, with an Adjusted EBITDA margin of 9.2%, as compared to 
Adjusted EBITDA of $312.5 million and an Adjusted EBITDA margin of 6.8% in the prior year.
A significant contributor to the improvement in our financial performance for the year ended December 31, 2023, as 
compared to the year ended December 31, 2022, was a decrease in labor costs and an increase in revenue in our critical illness 
recovery hospital segment, as the investments we made in recruitment, hiring, and retention of full-time staff in 2022 resulted in 
a significant decrease in contract labor utilization in 2023. Additionally, reduced demand in the marketplace resulted in lower 
contract labor rates, which further contributed to the decrease in total contract labor costs. We believe the ratio of personnel 
expense to net revenue for the critical illness recovery hospital segment for the year ended December 31, 2023, is indicative of a 
more stabilized labor environment. Revenue, Adjusted EBITDA, and Adjusted EBITDA margin increased for the year ended 
December 31, 2023, as compared to the year ended December 31, 2022, in each of our other operating segments. Other 
operating income during the year ended December 31, 2023, was $1.5 million. Other operating income during the year ended 
December 31, 2022, was $28.5 million, principally related to the recognition of payments received under the Provider Relief 
Fund for health care related expenses and lost revenues attributable to COVID-19.
Revenue
Critical Illness Recovery Hospital Segment.  Revenue increased 2.9% to $2,299.8 million for the year ended 
December 31, 2023, compared to $2,234.1 million for the year ended December 31, 2022. The increase was attributable to 
revenue per patient day, which increased 4.8% to $2,067 for the year ended December 31, 2023, compared to $1,973 for the 
year ended December 31, 2022. Our patient days were 1,108,492 for the year ended December 31, 2023, compared to 
1,127,911 patient days for the year ended December 31, 2022. Occupancy in our critical illness recovery hospitals was 68% for 
the year ended December 31, 2023, compared to 69% for the year ended December 31, 2022. 
Rehabilitation Hospital Segment.  Revenue increased 6.9% to $979.6 million for the year ended December 31, 2023, 
compared to $916.8 million for the year ended December 31, 2022. Our revenue per patient day increased 3.3% to $2,017 for 
the year ended December 31, 2023, compared to $1,953 for the year ended December 31, 2022. Our patient days increased 
3.6% to 446,145 days for the year ended December 31, 2023, compared to 430,547 days for the year ended December 31, 2022. 
Occupancy in our rehabilitation hospitals was 85% for the years ended December 31, 2023 and 2022.
Outpatient Rehabilitation Segment.  Revenue increased 5.7% to $1,188.9 million for the year ended December 31, 2023, 
compared to $1,125.3 million for the year ended December 31, 2022. The increase was attributable to patient visits, which 
increased 11.3% to 10,657,558 for the year ended December 31, 2023, compared to 9,573,980 visits for the year ended 
December 31, 2022. Our revenue per visit was $100 for the year ended December 31, 2023, compared to $103 for the year 
ended December 31, 2022, principally attributable to a decrease in Medicare reimbursement, changes in payor mix, and an 
increase in variable discounts.
Operating Expenses
Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating 
expenses were $4,424.6 million, or 91.7% of revenue, for the year ended December 31, 2023, compared to $4,360.7 million, or 
94.6% of revenue, for the year ended December 31, 2022. Our cost of services, a major component of which is labor expense, 
was $4,254.4 million, or 88.2% of revenue, for the year ended December 31, 2023, compared to $4,207.7 million, or 91.3% of 
revenue, for the year ended December 31, 2022. The decrease in our operating expenses relative to our revenue was principally 
attributable to the decreased labor costs within our critical illness recovery hospital segment, as explained further within the 
“Adjusted EBITDA” discussion. General and administrative expenses were $170.2 million, or 3.5% of revenue, for the year 
ended December 31, 2023, compared to $153.0 million, or 3.3% of revenue, for the year ended December 31, 2022. 
Other Operating Income
For the year ended December 31, 2023, we had other operating income of $1.5 million, compared to $28.5 million for the 
year ended December 31, 2022. The other operating income for the year ended December 31, 2022, is included within the 
operating results of our other activities, and is principally related to the recognition of payments received under the Provider 
Relief Fund for health care related expenses and lost revenues attributable to COVID-19.
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73

Adjusted EBITDA
Critical Illness Recovery Hospital Segment.  Adjusted EBITDA increased 121.0% to $246.0 million for the year ended 
December 31, 2023, compared to $111.3 million for the year ended December 31, 2022. Our Adjusted EBITDA margin for the 
critical illness recovery hospital segment was 10.7% for the year ended December 31, 2023, compared to 5.0% for the year 
ended December 31, 2022. The increases in our Adjusted EBITDA and Adjusted EBITDA margin during the year ended 
December 31, 2023, as compared to the year ended December 31, 2022, were attributable to lower labor costs as well as an 
increase in net revenue. The decrease in labor costs resulted from our efforts in 2022 to hire additional full-time nursing staff, 
improve retention among our employees, and decrease our reliance on contract labor, as well as the lower contract labor rates 
attributable to reduced demand in the marketplace. Our total contract labor costs decreased by approximately 62% during the 
year ended December 31, 2023, as compared to the year ended December 31, 2022, which was driven by an approximate 41% 
decrease in utilization of contract registered nurses and an approximate 32% decrease in the rate per hour for contract registered 
nurses.
Rehabilitation Hospital Segment.  Adjusted EBITDA increased 12.0% to $221.9 million for the year ended December 31, 
2023, compared to $198.0 million for the year ended December 31, 2022. Our Adjusted EBITDA margin for the rehabilitation 
hospital segment was 22.6% for the year ended December 31, 2023, compared to 21.6% for the year ended December 31, 2022. 
The increases in Adjusted EBITDA and Adjusted EBITDA margin were principally attributable to an increase in revenue.
Outpatient Rehabilitation Segment.  Adjusted EBITDA increased 9.8% to $111.9 million for the year ended December 31, 
2023, compared to $101.9 million for the year ended December 31, 2022. Our Adjusted EBITDA margin for the outpatient 
rehabilitation segment was 9.4% for the year ended December 31, 2023, compared to 9.1% for the year ended December 31, 
2022. The increases in Adjusted EBITDA and Adjusted EBITDA margin were principally attributable to an increase in 
revenue.
Depreciation and Amortization
Depreciation and amortization expense was $135.7 million for the year ended December 31, 2023, compared to $132.2 
million for the year ended December 31, 2022.
Income from Continuing Operations before Other Income and Expense
For the year ended December 31, 2023, we had income from operations of $267.2 million, compared to $144.8 million for 
the year ended December 31, 2022. The decline in labor costs and increase in revenue experienced within our critical illness 
recovery hospital segment was the primary cause of the increase in income from operations, as discussed above under 
“Adjusted EBITDA.” We recognized other operating income of $1.5 million during the year ended December 31, 2023, 
compared to $28.5 million for the year ended December 31, 2022, as described further under “Other Operating Income.” 
Loss on Early Retirement of Debt
For the year ended December 31, 2023, we had a loss on early retirement of debt of $14.7 million related to an 
amendment to the Select credit agreement, as described in Note 12. Long-Term Debt and Notes Payable.
Equity in Earnings of Unconsolidated Subsidiaries
For the year ended December 31, 2023, we had equity in earnings of unconsolidated subsidiaries of $41.3 million, 
compared to $28.0 million for the year ended December 31, 2022. The increase in equity in earnings is principally attributable 
to the improved operating performance of our rehabilitation businesses in which we are a minority owner.
Interest
Our term loan was subject to an interest rate cap, which limited the variable interest rate index to 1.0% on $2.0 billion of 
principal outstanding under the term loan. The Term SOFR rate was 5.35% at December 31, 2023, compared to the one-month 
LIBOR rate of 4.39% at December 31, 2022. The one-month LIBOR rate first exceeded 1.0% in June 2022 and the interest rate 
cap mitigated our exposure to increases in the one-month LIBOR and Term SOFR rates on the term loan. Interest expense was 
$154.2 million for the year ended December 31, 2023, compared to $137.5 million for the year ended December 31, 2022. The 
increase was attributable to higher average outstanding borrowings under our revolving facility during the year ended 
December 31, 2023, as well as an increase in the variable interest rate to the extent not mitigated by the interest rate cap.
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Income Tax Expense from Continuing Operations
We recorded income tax expense of $29.3 million for the year ended December 31, 2023, which represented an effective 
tax rate of 20.9%. We recorded income tax expense of $16.7 million for the year ended December 31, 2022, which represented 
an effective tax rate of 47.4%. For the year ended December 31, 2023, the decrease in our effective tax rate was partially due to 
a reduction in the state tax rates used in evaluating our net deferred tax liabilities. Additionally, our effective tax rate for the 
year ended December 31, 2022 was higher due to our lower income from continuing operations, the mix of states in which the 
income was earned, valuation allowances recorded as a result of an inability to recognize net operating losses in future periods 
and the effect of permanent tax differences. 
Refer to Note 18. Income Taxes of the notes to our consolidated financial statements included herein for the 
reconciliations of the statutory federal income tax rate to our effective income rate for the years ended December 31, 2023 and 
2022.
Income from Discontinued Operations, Net of Tax
For the year ended December 31, 2023, we had income from discontinued operations, net of tax, of $189.3 million, 
compared to $179.5 million for the year ended December 31, 2022. Discontinued operations for both periods represent the 
operations of Concentra. The common stock of Concentra was distributed to Select stockholders on November 25, 2024, as 
discussed in “Overview.” The increase in income from discontinued operations, net of tax, was principally attributable to an 
increase in revenue for Concentra. 
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Liquidity and Capital Resources
Cash Flows for the Years Ended December 31, 2022, 2023, and 2024 
In the following, we discuss cash flows from operating activities, investing activities, and financing activities.
 
For the Year Ended December 31,
 
2022
2023
2024
Cash flows provided by operating activities
$ 
284,825 
$ 
582,058 
$ 
517,864 
Cash flows used in investing activities
 
(226,339)  
(268,477)  
(231,011) 
Cash flows used in financing activities
 
(34,890)  
(327,481)  
(311,165) 
Net increase (decrease) in cash and cash equivalents
 
23,596 
 
(13,900)  
(24,312) 
Cash and cash equivalents at beginning of period
 
74,310 
 
97,906 
 
84,006 
Cash and cash equivalents at end of period (1)
$ 
97,906 
$ 
84,006 
$ 
59,694 
______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(1) The Company had and $37.7 million and $31.4 million of cash and cash equivalents from discontinued operations at December 31, 2022 and 2023, 
respectively.
Operating activities provided $517.9 million, $582.1 million, and $284.8 million of cash flows during the years ended 
December 31, 2024, 2023, and 2022, respectively. The decrease in cash flows from operating activities for the year ended 
December 31, 2024, as compared to the year ended December 31, 2023, was principally due to a increase in accounts 
receivable, which was principally driven by an increase in revenue and an increase in days sales outstanding, and partially offset 
by an increase in cash flows from operating performance. The increase in cash flows from operating activities for the year 
ended December 31, 2023, as compared to the year ended December 31, 2022, was principally due to a increase in our 
operating income and routine changes in net working capital.
Our days sales outstanding was 58 days at December 31, 2024, 60 days at September 30, 2024, 55 days at December 31, 
2023, and 58 days at December 31, 2022. Our days sales outstanding will fluctuate based upon variability in our collection 
cycles and patient volumes.
Investing activities used $231.0 million, $268.5 million, and $226.3 million of cash flows for the years ended 
December 31, 2024, 2023, and 2022, respectively. For the year ended December 31, 2024, the principal uses of cash were 
$222.2 million for purchases of property, equipment, and other assets, and $13.1 million for investments in and acquisitions of 
businesses. For the year ended December 31, 2023, the principal uses of cash were $229.2 million for purchases of property and 
equipment, and other assets, and $39.4 million for investments in and acquisitions of businesses. For the year ended 
December 31, 2022, the principal uses of cash were $190.4 million for purchases of property, equipment, and other assets, and 
$44.3 million for investments in and acquisitions of businesses. The cash outflows were offset in part by proceeds received 
from the sale of assets and business of $8.3 million.
Financing activities used $311.2 million of cash flows for the year ended December 31, 2024. The principal uses of cash 
were net payments of $212.4 million on our term loans, $182.1 million of cash transferred to Concentra upon separation, net 
payments of $175.0 million under our revolving facility, $64.6 million of dividend payments to common stockholders, $61.2 
million of net payments as a result of the payoff of our 6.250% senior notes due 2026, and subsequent issuance of our 6.250% 
senior notes due 2032, and $60.0 million for distributions to and purchases of non-controlling interests. The cash outflows were 
partially offset by proceeds from the Concentra IPO of $511.2 million.
Financing activities used $327.5 million of cash flows for the year ended December 31, 2023. The principal use of cash 
were net payments of $165.0 million under our revolving facility, $63.9 million of dividend payments to common stockholders, 
and $63.5 million for distributions to and purchases of non-controlling interests.
Financing activities used $34.9 million of cash flows for the year ended December 31, 2022. The principal use of cash 
were $195.5 million for repurchases of common stock, $64.6 million of dividend payments to common stockholders, and $43.1 
million for distributions to and purchases of non-controlling interests. We had net borrowings of $285.0 million under our 
revolving facility.
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Capital Resources
Working capital.  We had net working capital of $42.1 million at December 31, 2024, compared to a net working capital 
of $9.2 million at December 31, 2023. The change in net working capital was primarily due to an increase in accounts 
receivable, partially offset by the decrease in net working capital as a result of the distribution of our ownership interest in 
Concentra.
A significant component of our net working capital is our accounts receivable. Collection of these accounts receivable is 
our primary source of cash and is critical to our liquidity and capital resources. Most of our patients are subject to healthcare 
coverage through third party payor arrangements, including Medicare and Medicaid. It is our general policy to verify healthcare 
coverage prior to providing services. We have credit risk associated with our accounts receivable; however, we believe there is 
a remote possibility of default with these payors.
Credit facilities.  On July 26, 2024, the Company entered into Amendment No. 10 to the credit agreement. Amendment 
No. 10 reduced the revolving credit facility commitments available under the credit agreement from $770.0 million to 
$550.0 million. Select also made a voluntary prepayment of $1,640.4 million on its term loan and a $300.0 million repayment 
on its revolving credit facility using the proceeds derived from the Concentra IPO and related debt transactions.
On December 3, 2024, the Company entered into Amendment No. 11 to the credit agreement. Amendment No. 11 
established a new incremental term loan in the aggregate amount of $1,050.0 million to replace the existing term loans. The 
maturity date of the term loan is December 3, 2031. In addition, Amendment No. 11 extended the maturity date of the revolving 
credit facility to December 3, 2029 and increased the revolving credit facility commitments from $550.0 million to 
$600.0 million. 
At December 31, 2024, Select had outstanding borrowings under its credit facilities consisting of a $1,050.0 million term 
loan (excluding unamortized original issue discounts and debt issuance costs of $8.3 million) and borrowings of $105.0 million 
under its revolving facility. At December 31, 2024, Select had $453.3 million of availability under its revolving facility after 
giving effect to $105.0 million of outstanding borrowings and $41.7 million of outstanding letters of credit.
Each calendar quarter, Select is required to pay each lender a commitment fee in respect of any unused commitments 
under the revolving facility, which is currently 0.375% per annum and subject to adjustment based on Select’s leverage ratio, as 
specified in the credit agreement.
As of December 31, 2024, Select’s leverage ratio (its ratio of total indebtedness to consolidated EBITDA for the prior four 
consecutive fiscal quarters), which is required to be maintained at less than 7.00 to 1.00 under the terms of the revolving 
facility, was 3.18 to 1.00.
Our credit facilities also contain a number of other affirmative and restrictive covenants, including limitations on mergers, 
consolidations and dissolutions; sales of assets; investments and acquisitions; indebtedness; liens; affiliate transactions; and 
dividends and restricted payments. Our credit facilities contain events of default for non-payment of principal and interest when 
due (subject, as to interest, to a grace period), cross-default and cross-acceleration provisions and an event of default that would 
be triggered by a change of control.
6.250% senior notes.  On December 3, 2024, Select issued and sold $550.0 million aggregate principal amount of 6.250% 
senior notes due December 1, 2032. Select used the net proceeds of the 6.250% senior notes due 2032, together with the 
proceeds from the incremental term loan borrowings (as described above) and cash on hand, to redeem in full the 
$1,225.0 million of senior notes due 2026 and pay related fees and expenses associated with the financing. 
At December 31, 2024, Select had $550.0 million of 6.250% senior notes outstanding (excluding debt issuance costs of 
$10.6 million).
The terms of the senior notes contains covenants that, among other things, limit Select’s ability and the ability of certain 
of Select’s subsidiaries to (i) grant liens on its assets, (ii) make dividend payments, other distributions or other restricted 
payments, (iii) incur restrictions on the ability of Select’s restricted subsidiaries to pay dividends or make other payments, (iv) 
enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) 
incur additional indebtedness, (vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the 
proceeds from sales of assets, including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. 
These covenants are subject to a number of exceptions, limitations and qualifications.
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Stock Repurchase Program.  Holdings’ Board of Directors has authorized a common stock repurchase program to 
repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect 
until December 31, 2025, unless further extended or earlier terminated by the Board of Directors. Stock repurchases under this 
program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as 
Holdings deems appropriate. Holdings funds this program with cash on hand and borrowings under its revolving facility. 
During the year ended December 31, 2024, Holdings did not repurchase shares under the program. Since the inception of the 
program through December 31, 2024, Holdings has repurchased 48,234,823 shares at a cost of approximately $600.3 million, or 
$12.45 per share, which includes transaction costs. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, 
which enacted a 1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023.
Use of Capital Resources.  We may from time to time pursue opportunities to develop new joint venture relationships 
with large, regional health systems and other healthcare providers. We also intend to open new outpatient rehabilitation clinics 
in local areas that we currently serve where we can benefit from existing referral relationships and brand awareness to produce 
incremental growth. In addition to our development activities, we may grow through opportunistic acquisitions.
Liquidity
We believe our internally generated cash flows and borrowing capacity under our revolving facility will allow us to 
finance our operations in both the short and long term. As of December 31, 2024, we had cash and cash equivalents of $59.7 
million and $453.3 million of availability under our revolving facility, after giving effect to $105.0 million of outstanding 
borrowings and $41.7 million of outstanding letters of credit.
Our material cash requirements from known contractual and other obligations include:
i.
Debt payments, including finance lease payments – Our expected principal payments total $1,731.3 million, with $20.3 
million payable within the next twelve months. Refer to Note 12 – Long-Term Debt and Notes Payable of the notes to 
our consolidated financial statements included herein for additional information. 
ii.
Interest payments – Our expected interest payments on the 6.250% senior notes, term loan, and revolving facility total 
$763.7 million, with $111.6 million payable within the next twelve months. Interest payments for the 6.250% senior 
notes were calculated using the stated interest rate. Interest payments for the term loan and revolving facility were 
calculated using interest rates of 6.5% and 8.7%, respectively.
iii. Operating lease payments – Our expected operating lease payments total $1,374.2 million, with $235.5 million 
payable within the next twelve months. Refer to Note 4 – Leases of the notes to our consolidated financial statements 
included herein for additional information. 
iv. Purchase, construction, and other commitments – Our expected payments related to purchase, construction, and other 
obligations total $282.8 million, with $237.7 million payable within the next twelve months. Our purchase obligations 
primarily relate to software licensing and support agreements which specify all significant contractual terms and are 
legally binding and enforceable. Our construction commitments are described further in Note 20 – Commitments and 
Contingencies.
v.
Insurance liabilities – Our expected payments related to our insurance liabilities, including those for workers’ 
compensation and professional malpractice liabilities, total $141.6 million, with $69.3 million payable within the next 
twelve months. The amounts payable within the next twelve months are recorded in accrued other in the consolidated 
balance sheet as of December 31, 2024. The remaining amounts are recorded in other non-current liabilities. 
vi. Other current liabilities recorded in the consolidated balance sheet as of December 31, 2024, such as accounts payable 
and accrued expenses, which are not specifically identified above. 
We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for 
equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or 
exchanges, if any, may be funded from operating cash flows or other sources and will depend on prevailing market conditions, 
our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
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Dividend
On February 13, 2024, May 1, 2024, July 31, 2024, and October 30, 2024, our Board of Directors declared a cash 
dividend of $0.125 per share. On March 13, 2024, May 30, 2024, August 30, 2024, and November 26, 2024, cash dividends 
totaling $16.0 million, $16.3 million, $16.2 million, and $16.1 million were paid.
On February 13, 2025, our Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be 
payable on or about March 13, 2025, to stockholders of record as of the close of business on March 3, 2025.
Effects of Inflation
The healthcare industry is labor intensive and our largest expenses are labor related costs. Wage and other expenses 
increase during periods of inflation and when labor shortages occur in the marketplace. We have recently experienced higher 
labor costs related to the current inflationary environment and competitive labor market. In addition, suppliers have passed 
along rising costs to us in the form of higher prices. We cannot predict our ability to pass along cost increases to our customers.
Recent Accounting Pronouncements
Refer to Note 1 – Organization and Significant Accounting Policies of the notes to our consolidated financial statements 
included herein for information regarding recent accounting pronouncements.
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79

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.
We are subject to interest rate risk in connection with our variable rate long-term indebtedness. Our principal interest rate 
exposure relates to the loans outstanding under our credit facilities, which bear interest rates that are indexed against Term 
SOFR. 
As of December 31, 2024, Select had outstanding borrowings under its credit facilities consisting of a $1,050.0 million 
term loan (excluding unamortized original issue discount and debt issuance costs of $8.3 million) and $105.0 million of 
borrowings under its revolving facility. As of December 31, 2024, a 0.25% change in market interest rates would impact the 
interest expense on our variable rate debt by approximately $2.9 million per year.
Item 8.    Financial Statements and Supplementary Data.
See Consolidated Financial Statements and Notes thereto commencing at Page F-1.
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A.    Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our principal executive officer and 
principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined 
in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered in this report. Based on this 
evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures, 
including the accumulation and communication of disclosure to our principal executive officer and principal financial officer as 
appropriate to allow timely decisions regarding disclosure, are effective as of December 31, 2024, to provide reasonable 
assurance that material information required to be included in our periodic SEC reports is recorded, processed, summarized, and 
reported within the time periods specified in the relevant SEC rules and forms.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities 
Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act 
of 1934 that occurred during the fourth quarter of the year ended December 31, 2024, that has materially affected, or is 
reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not 
absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part 
upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control 
systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future 
conditions.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of internal control over our financial 
reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the 
Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria of “Internal Control—
Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission, or 
“COSO,” as of December 31, 2024. Our system of internal control over financial reporting is designed to provide reasonable 
assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for 
external purposes in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 
Also, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to 
the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the 
policies or procedures may deteriorate.
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Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 
2024. This assessment was based on criteria for effective internal control over financial reporting described in “Internal Control
—Integrated Framework (2013)” issued by COSO. Based on this assessment, management concludes that, as of December 31, 
2024, internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles. 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, has been audited by 
PricewaterhouseCoopers LLP, an independent registered public accounting firm as stated in their report which appears herein.
Item 9B.    Other Information.
Rule 10b5-1 Trading Plans
On December 4, 2024, David Chernow, the Company’s Chief Executive Officer, entered into a trading plan intended to 
satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the sale, subject to 
certain price limits, of up to 225,000 shares of common stock. Mr. Chernow’s plan will expire on December 31, 2025, subject 
to early termination in accordance with the terms of the plan.
On December 5, 2024, Robert Ortenzio, the Company’s Executive Chairman and Co-Founder, and Robert A Ortenzio 
Descendants Trust DTD 12/23/2002, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 
10b5-1(c) under the Exchange Act. The plan provides for the sale, subject to certain price limits, of up to 600,000 shares of 
common stock for Robert Ortenzio, and of up to 125,000 shares for Robert A. Ortenzio Descendants Trust DTD 12/23/2002. 
Mr. Ortenzio’s plan will expire on March 14, 2026, subject to early termination in accordance with the terms of the plan. 
Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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81

PART III
Item 10.    Directors, Executive Officers and Corporate Governance.
The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s 
securities that applies to all Company personnel, including directors, officers, employees, and other covered persons. The 
Company also follows procedures for the repurchase of its securities. The Company believes that its insider trading policy and 
repurchase procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and 
listing standards applicable to the Company. A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this 
Form 10-K.
The information regarding directors and nominees for directors of the Company, including identification of the audit 
committee and audit committee financial expert, and Compliance with Section 16(a) of the Exchange Act is presented under the 
headings “Corporate Governance—Committees of the Board of Directors” and “Election of Directors—Directors and 
Nominees” in the Company’s definitive proxy statement for use in connection with the 2025 Annual Meeting of Stockholders 
(the “Proxy Statement”) to be filed within 120 days after the end of the Company’s fiscal year ended December 31, 2024. The 
information contained under these headings is incorporated herein by reference. Information regarding the executive officers of 
the Company is included in this annual report on Form 10-K under Item 1 of Part I as permitted by the Instruction to Item 401 
of Regulation S-K.
We have adopted a written code of business conduct and ethics, known as our Code of Conduct, which applies to all of 
our directors, officers, and employees, as well as a Code of Ethics applicable to our senior financial officers, including our 
Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer. Our Code of Conduct and Code of 
Ethics for senior financial officers are available on our website, www.selectmedicalholdings.com. Our Code of Conduct and 
Code of Ethics for senior financial officers may also be obtained by contacting investor relations at (717) 972-1100. Any 
amendments to our Code of Conduct or Code of Ethics for senior financial officers or waivers from the provisions of the codes 
for our Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer will be disclosed on our website 
promptly following the date of such amendment or waiver.
Item 11.    Executive Compensation.
Information concerning executive compensation is presented under the headings “Executive Compensation Discussion 
and Analysis” and “Human Capital and Compensation Committee Report” in the Proxy Statement. The information contained 
under these headings is incorporated herein by reference.
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information with respect to security ownership of certain beneficial owners and management is set forth under the 
heading “Security Ownership of Certain Beneficial Owners and Directors and Officers” in the Proxy Statement. The 
information contained under this heading is incorporated herein by reference.
Equity Compensation Plan Information
Set forth in the table below is a list of all of our equity compensation plans and the number of securities to be issued on 
exercise of equity rights, average exercise price, and number of securities that would remain available under each plan if 
outstanding equity rights were exercised as of December 31, 2024.
Plan Category
Number of securities 
to be issued upon 
exercise of 
outstanding options, 
warrants and rights 
(a)
Weighted-average 
exercise price of 
outstanding options, 
warrants and rights 
(b)
Number of securities 
remaining available for 
future issuance under 
equity compensation 
plans (excluding 
securities reflected in 
column (a))(c)
Equity compensation plans approved by security holders:
 
 
 
Select Medical Holdings Corporation 2020 Equity Incentive Plan
 
— 
 
— 
 
4,266,900 
Equity compensation plans not approved by security holders
 
— 
 
— 
 
— 
Item 13.    Certain Relationships, Related Transactions and Director Independence.
Information concerning related transactions is presented under the heading “Certain Relationships, Related Transactions 
and Director Independence” in the Proxy Statement. The information contained under this heading is incorporated herein by 
reference.
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82

Item 14.    Principal Accountant Fees and Services.
Information concerning principal accountant fees and services is presented under the heading “Ratification of 
Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement. The information contained under this 
heading is incorporated herein by reference.
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83

PART IV
Item 15.    Exhibits and Financial Statement Schedules.
a.
The following documents are filed as part of this report:
i.
Financial Statements: See Index to Financial Statements appearing on page F-1 of this report.
ii.
Financial Statement Schedule: See Schedule II—Valuation and Qualifying Accounts appearing on page F-41 
of this report.
iii.
The following exhibits are filed as part of, or incorporated by reference into, this report:
Number
Description
 
3.1 Amended and Restated Certificate of Incorporation of Select Medical Corporation, incorporated by reference to 
Exhibit 3.1 of Select Medical Corporation’s Form S-4 filed June 15, 2005 (Reg. No. 001-31441).
 
3.2 Form of Restated Certificate of Incorporation of Select Medical Holdings Corporation, incorporated by reference 
to Exhibit 3.3 of Select Medical Holdings Corporation’s Form S-1/A filed September 21, 2009 (Reg. 
No. 333-152514).
 
3.3 Amended and Restated Bylaws of Select Medical Corporation, incorporated herein by reference to Exhibit 3.2 of 
the Quarterly Report on Form 10-Q of Select Medical Holdings Corporation and Select Medical Corporation filed 
on October 30, 2014 (Reg. Nos. 001-34465 and 001-31441).
 
3.4 Amended and Restated Bylaws of Select Medical Holdings Corporation, as amended, incorporated herein by 
reference to Exhibit 3.4 of the Annual Report on Form 10-K of Select Medical Holdings Corporation and Select 
Medical Corporation filed on February 26, 2016 (Reg. Nos. 001-34465 and 001-31441).
 
4.1 Description of Registrant’s Securities, incorporated herein by reference to Exhibit 4.3 of Select Medical Holdings 
Corporation’s Annual Report on Form 10-K for the fiscal year December 31, 2019, filed on February 20, 2020 
(Reg. No. 001-34465).
 
4.2 Indenture, dated as of December 3, 2024, by and among Select Medical Corporation, the guarantors named 
therein and U.S.Bank Trust Company, National Association, as trustee, incorporated herein by reference to 
Exhibit 4.1 of the Current Report on Form 8-K of Select Medical Holdings Corporation on December 4, 2024 
(Reg. No. 001-34465).
 
4.3 Forms of 6.250% Senior Notes due 2032, incorporated herein by reference to Exhibit 4.1 of the Current Report on 
Form 8-K of Select Medical Holdings Corporation on December 4, 2024 (Reg. No. 001-34465).
 
10.1 Employment Agreement, dated as of March 1, 2000, between Select Medical Corporation and Robert A. 
Ortenzio, incorporated by reference to Exhibit 10.14 of Select Medical Corporation’s Registration Statement on 
Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
 
10.2 Amendment No. 1 to Employment Agreement, dated as of August 8, 2000, between Select Medical Corporation 
and Robert A. Ortenzio, incorporated by reference to Exhibit 10.15 of Select Medical Corporation’s Registration 
Statement on Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
 
10.3 Amendment No. 2 to Employment Agreement, dated as of February 23, 2001, between Select Medical 
Corporation and Robert A. Ortenzio, incorporated by reference to Exhibit 10.48 of Select Medical Corporation’s 
Registration Statement on Form S-1 filed March 30, 2001 (Reg. No. 333-48856).
 
10.4 Amendment No. 3 to Employment Agreement, dated as of September 17, 2001, between Select Medical 
Corporation and Robert A. Ortenzio, incorporated by reference to Exhibit 10.53 of Select Medical Corporation’s 
Annual Report on Form 10-K for the fiscal year ended December 31, 2001 (Reg. No. 000-32499).
 
10.5 Amendment No. 4 to Employment Agreement, dated as of December 10, 2004, between Select Medical 
Corporation and Robert A. Ortenzio, incorporated by reference to Exhibit 99.3 of Select Medical Corporation’s 
Current Report on Form 8-K filed December 16, 2004 (Reg. No. 001-31441).
 
10.6 Amendment No. 5 to Employment Agreement, dated as of February 24, 2005, between Select Medical 
Corporation and Robert A. Ortenzio, incorporated by reference to Exhibit 10.16 of Select Medical Corporation’s 
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
 
10.7 Change of Control Agreement, dated as of March 1, 2000, between Select Medical Corporation and Martin F. 
Jackson, incorporated by reference to Exhibit 10.11 of Select Medical Corporation’s Registration Statement on 
Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
 
10.8 Amendment to Change of Control Agreement, dated as of February 23, 2001, between Select Medical 
Corporation and Martin F. Jackson, incorporated by reference to Exhibit 10.52 of Select Medical Corporation’s 
Registration Statement on Form S-1 filed March 30, 2001 (Reg. No. 333-48856).
 
10.9 Second Amendment to Change of Control Agreement, dated as of February 24, 2005, between Select Medical 
Corporation and Martin F. Jackson, incorporated by reference to Exhibit 10.24 of Select Medical Corporation’s 
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
 
10.10 Change of Control Agreement, dated as of March 1, 2000, between Select Medical Corporation and Michael E. 
Tarvin, incorporated by reference to Exhibit 10.22 of Select Medical Corporation’s Registration Statement on 
Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
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Number
Description
 
10.11 Amendment to Change of Control Agreement, dated as of February 23, 2001, between Select Medical 
Corporation and Michael E. Tarvin, incorporated by reference to Exhibit 10.54 of Select Medical Corporation’s 
Registration Statement on Form S-1 filed March 30, 2001 (Reg. No. 333-48856).
 
10.12 Second Amendment to Change of Control Agreement, dated as of February 24, 2005, between Select Medical 
Corporation and Michael E. Tarvin, incorporated by reference to Exhibit 10.39 of Select Medical Corporation’s 
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
 
10.13 Office Lease Agreement, dated as of June 17, 1999, between Select Medical Corporation and Old Gettysburg 
Associates III, incorporated by reference to Exhibit 10.27 of Select Medical Corporation’s Registration Statement 
on Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
 
10.14 First Addendum to Lease Agreement, dated as of April 25, 2008, between Old Gettysburg Associates III and 
Select Medical Corporation, incorporated by reference to Exhibit 10.65 of Select Medical Holdings Corporation’s 
Form S-1 filed July 24, 2008 (Reg. No. 333-152514).
 
10.15 Second Addendum to Lease Agreement, dated as of November 1, 2012, between Old Gettysburg Associates 
III LP and Select Medical Corporation, incorporated by reference to Exhibit 10.37 of the Annual Report on 
Form 10-K of Select Medical Holdings Corporation and Select Medical Corporation filed on February 26, 2013 
(Reg. Nos. 001-34465 and 001-31441).
 
10.16 Office Lease Agreement, dated August 25, 2006, between Old Gettysburg Associates IV, L.P. and Select Medical 
Corporation, incorporated by reference to Exhibit 10.1 of Select Medical Corporation’s Quarterly Report on 
Form 10-Q for the quarter ended September 30, 2006 (Reg. No. 001-31441).
 
10.17 First Addendum to Lease Agreement, dated as of November 1, 2012, between Old Gettysburg Associates IV LP 
and Select Medical Corporation, incorporated by reference to Exhibit 10.39 of the Annual Report on Form 10-K 
of Select Medical Holdings Corporation and Select Medical Corporation filed on February 26, 2013 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.18 Office Lease Agreement, dated November 1, 2012, by and between Select Medical Corporation and Old 
Gettysburg Associates, incorporated by reference to Exhibit 10.40 of the Annual Report on Form 10-K of Select 
Medical Holdings Corporation and Select Medical Corporation filed on February 26, 2013 (Reg. Nos. 001-34465 
and 001-31441).
 
10.19 Office Lease Agreement, dated November 1, 2012, by and between Select Medical Corporation and Old 
Gettysburg Associates II, LP, incorporated by reference to Exhibit 10.41 of the Annual Report on Form 10-K of 
Select Medical Holdings Corporation and Select Medical Corporation filed on February 26, 2013 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.20 Amendment No. 6 to Employment Agreement between Select Medical Corporation and Robert A. Ortenzio, 
incorporated by reference to Exhibit 10.96 of Select Medical Holdings Corporation’s Form S-1/A filed June 18, 
2009 (Reg. No. 333-152514).
 
10.21 Third Amendment to Change of Control Agreement between Select Medical Corporation and Michael E. Tarvin, 
incorporated by reference to Exhibit 10.100 of Select Medical Holdings Corporation’s Form S-1/A filed June 18, 
2009 (Reg. No. 333-152514).
 
10.22 Third Amendment to Change of Control Agreement between Select Medical Corporation and Martin F. Jackson, 
incorporated by reference to Exhibit 10.103 of Select Medical Holdings Corporation’s Form S-1/A filed June 18, 
2009 (Reg. No. 333-152514).
 
10.23 Employment Agreement, dated September 13, 2010, by and between Select Medical Corporation and David S. 
Chernow, incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K of Select Medical 
Holdings Corporation and Select Medical Corporation filed on September 15, 2010. (Reg. Nos. 001-34465 and 
001-31441).
 
10.24 Amendment No. 1 to Employment Agreement, dated March 21, 2011, between Select Medical Corporation and 
David S. Chernow, incorporated herein by reference to Exhibit 10.8 of the Quarterly Report on Form 10-Q of 
Select Medical Holdings Corporation and Select Medical Corporation filed on May 5, 2011. (Reg. 
Nos. 001-34465 and 001-31441).
 
10.25 Amendment No. 7 to Employment Agreement, dated November 10, 2010, by and between Select Medical 
Corporation and Robert A. Ortenzio, incorporated herein by reference to Exhibit 10.2 of the Current Report on 
Form 8-K of Select Medical Holdings Corporation and Select filed on November 15, 2010. (Reg. Nos. 001-34465 
and 001-31441).
 
10.26 Fourth Amendment to Change of Control Agreement, dated March 8, 2011, between Select Medical Corporation 
and Martin F. Jackson, incorporated herein by reference to Exhibit 10.111 of the Annual Report on Form 10-K of 
Select Medical Holdings Corporation and Select Medical Corporation filed on March 9, 2011 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.27 Amendment No. 8 to Employment Agreement, dated March 8, 2011, between Select Medical Corporation and 
Robert A. Ortenzio, incorporated herein by reference to Exhibit 10.112 of the Annual Report on Form 10-K of 
Select Medical Holdings Corporation and Select Medical Corporation filed on March 9, 2011 (Reg. 
Nos. 001-34465 and 001-31441).
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85

Number
Description
 
10.28 Fourth Amendment to Change of Control Agreement, dated March 8, 2011, between Select Medical Corporation 
and Michael E. Tarvin, incorporated herein by reference to Exhibit 10.117 of the Annual Report on Form 10-K of 
Select Medical Holdings Corporation and Select Medical Corporation filed on March 9, 2011 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.29 Office Lease Agreement, dated October 30, 2014, between Century Park Investments, L.P. and Select Medical 
Corporation, incorporated herein by reference to Exhibit 10.80 of the Annual Report on Form 10-K of Select 
Medical Holdings Corporation and Select Medical Corporation filed on February 25, 2015 (Reg. Nos. 001-34465 
and 001-31441).
 
10.30 First Amendment to Lease Agreement, dated February 24, 2016, between Old Gettysburg II, LP and Select 
Medical Corporation, incorporated herein by reference to Exhibit 10.82 of the Annual Report on Form 10-K of 
Select Medical Holdings Corporation and Select Medical Corporation filed February 26, 2016 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.31 Second Amendment to the Lease Agreement, dated June 1, 2016, between Old Gettysburg II, LP and Select 
Medical Corporation, incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of 
Select Medical Holdings Corporation and Select Medical Corporation filed August 4, 2016 (Reg. Nos. 001-34465 
and 001-31441).
 
10.32 Third Amendment to the Lease Agreement, dated September 19, 2016, between Old Gettysburg II, LP and Select 
Medical Corporation, incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of 
Select Medical Holdings Corporation and Select Medical Corporation filed November 3, 2016 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.33 Office Lease Agreement, dated October 28, 2016, between Select Medical Corporation and Old Gettysburg 
Associates V, L.P., incorporated herein by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q of 
Select Medical Holdings Corporation and Select Medical Corporation filed November 3, 2016 (Reg. 
Nos. 001-34465 and 001-31441).
 
10.34 First Amendment to the Lease Agreement, dated November 15, 2016, between Old Gettysburg Associates and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.75 of the Annual Report on Form 10-
K of Select Medical Holdings Corporation and Select Medical Corporation filed February 23, 2017 (Reg. Nos. 
001-34465 and 001-31441).
 
10.35 Select Medical Holdings Corporation 2016 Equity Incentive Plan, incorporated herein by reference to 
Appendix A of the Definitive Proxy Statement on Schedule 14A of Select Medical Holdings Corporation filed 
March 3, 2016 (Reg. No. 001-34465).
 
10.36 Form of Restricted Stock Award Agreement under the Select Medical Holdings Corporation 2016 Equity 
Incentive Plan, incorporated herein by reference to Exhibit 10.77 of the Annual Report on Form 10-K of Select 
Medical Holdings Corporation and Select Medical Corporation filed February 23, 2017 (Reg. Nos. 001-34465 
and 001-31441).
 
10.37 Credit Agreement, dated as of March 6, 2017, among Select Medical Holdings Corporation, Select Medical 
Corporation, JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent, Wells Fargo Securities, LLC 
and Deutsche Bank Securities Inc., as CoSyndication Agents and RBC Capital Markets, Merrill Lynch, Pierce, 
Fenner & Smith Incorporated, Goldman Sachs Bank USA, PNC Bank, National Association and Morgan Stanley 
Senior Funding, Inc., as Co-Documentation Agents and the other lenders and issuing banks party thereto, 
incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K of Select Medical Holdings 
Corporation and Select Medical Corporation filed on March 7, 2017 (Reg. Nos. 001- 34465 and 001-31441).
 
10.38 Change of Control Agreement, dated February 16, 2017, between Select Medical Corporation and John A. Saich, 
incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q of Select Medical 
Holdings Corporation and Select Medical Corporation filed May 4, 2017 (Reg. Nos. 001- 34465 and 001-31441).
 
10.39 Second Amendment to Lease Agreement, dated as of May 30, 2017, between Old Gettysburg Associates and 
Select Medical Corporation, incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q of 
Select Medical Holdings Corporation and Select Medical Corporation filed August 3, 2017 (Reg. Nos. 001-34465 
and 001-31441).
 
10.40 Amendment No. 1, dated March 22, 2018, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, incorporated herein by 
reference to Exhibit 10.1 of the Current Report on Form 8-K of Select Medical Holdings Corporation and Select 
Medical Corporation filed March 23, 2018 (Reg. Nos. 001-34465 and 001-31441).
 
10.41 Amendment No. 2, dated October 26, 2018, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, incorporated herein by reference to Exhibit 10.1 of Current Report on Form 8-
K of Select Medical Holdings Corporation and Select Medical Corporation filed October 31, 2018 (Reg. Nos. 
001-34465 and 001-31441).
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86

Number
Description
 
10.42 Office Lease Agreement, dated as of October 24, 2018, between 207 Associates and Independence Avenue 
Investments, LLC and Select Medical Corporation, incorporated herein by reference to Exhibit 10.71 of the 
Annual Report on Form 10-K of Select Medical Holdings Corporation and Select Medical Corporation filed on 
February 21, 2019 (Reg. Nos. 001-34465 and 001-31441).
 
10.43 Amendment No. 3, dated August 1, 2019, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, and Amendment No. 2, dated as of October 26, 2018, incorporated herein by 
reference to Exhibit 10.1 of the Current Report on Form 8-K of Select Medical Holdings Corporation filed August 
1, 2019 (Reg. No. 001-34465).
 
10.44 First Lien Term Loan Credit Agreement, dated December 10, 2019, by and among Select Medical Corporation, 
Concentra Inc. and Concentra Holdings, Inc., incorporated herein by reference to Exhibit 10.2 of the Current 
Report on Form 8-K of Select Medical Holdings Corporation filed December 11, 2019 (Reg. No. 001-34465).
 
10.45 Select Medical Holdings Corporation 2020 Equity Incentive Plan, incorporated herein by reference to 
Appendix A of the Definitive Proxy Statement on Schedule 14A of Select Medical Holdings Corporation filed 
March 4, 2020 (Reg. No. 001-34465).
 
10.46 Form of Restricted Stock Award Agreement under the Select Medical Holdings Corporation 2020 Equity 
Incentive Plan, incorporated herein by reference to Exhibit 10.71 of the Annual Report on Form 10-K of Select 
Medical Holdings Corporation filed on February 25, 2021 (Reg. No. 001-34465).
 
10.47 First Amendment to Lease Agreement, dated as of April 24, 2020, between 225 Grandview Investors, LLC and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-
Q of Select Medical Holdings Corporation filed on July 30, 2020 (Reg. No. 001-34465).
 
10.48 Third Addendum to Lease Agreement, dated as of May 5, 2020, between Old Gettysburg Associates III, LP and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-
Q of Select Medical Holdings Corporation filed on July 30, 2020 (Reg. No. 001-34465).
 
10.49 Change of Control Agreement, dated February 18, 2021, between Select Medical Corporation and Thomas P. 
Mullin, incorporated herein by reference to Exhibit 10.75 of the Annual Report on Form 10-K of Select Medical 
Holdings Corporation filed on February 25, 2021 (Reg. No. 001-34465).
 
10.50 Amendment No. 5, dated June 2, 2021, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2, dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019 and Amendment No. 4, dated as of December 10, 2019, incorporated by reference to Exhibit 
10.1 of the Current Report on Form 8-K, filed on June 4, 2021 (Reg. No. 001-34465).
 
10.51 First Addendum to Lease Agreement, dated as of July 21, 2021, between Old Gettysburg Associates V, LP and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-
Q of Select Medical Holdings Corporation filed on November 4, 2021 (Reg. No. 001-34465).
 
10.52 Letter Agreement, dated August 6, 2021, between Robert A. Ortenzio and Select Medical Corporation, 
incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q of Select Medical 
Holdings Corporation filed on November 4, 2021 (Reg. No. 001-34465).
 
10.53 First Amendment to Lease Agreement, dated as of August 9, 2021, between Century Park Investments, LP and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.3 of the Quarterly Report on Form 10-
Q of Select Medical Holdings Corporation filed on November 4, 2021 (Reg. No. 001-34465).
 
10.54 Fourth Amendment to Lease Agreement, dated as of December 28, 2021, between Old Gettysburg Associates II, 
LP and Select Medical Corporation incorporated herein by reference to Exhibit 10.81 of the Annual Report on 
Form 10-K of Select Medical Holdings Corporation filed on February 24, 2022 (Reg. No. 001-34465).
 
10.55 Second Addendum to Lease Agreement, dated as of December 1, 2022, between Old Gettysburg Associates IV 
LP and Select Medical Corporation, incorporated herein by reference to Exhibit 10.69 of the Annual Report on 
Form 10-K of Select Medical Holdings Corporation filed on February 23, 2023 (Reg No. 001-34465).
 
10.56 Third Amendment to Lease Agreement, dated as of December 1, 2022, between Old Gettysburg Associates and 
Select Medical Corporation, incorporated herein by reference to Exhibit 10.70 of the Annual Report on Form 10-
K of Select Medical Holdings Corporation filed on February 23, 2023 (Reg No. 001-34465).
 
10.57 Fifth Amendment to Lease Agreement, dated as of December 1, 2022, between Old Gettysburg Associates II, LP 
and Select Medical Corporation, incorporated herein by reference to Exhibit 10.71 of the Annual Report on Form 
10-K of Select Medical Holdings Corporation filed on February 23, 2023 (Reg No. 001-34465).
 
10.58 Fourth Addendum to Lease Agreement, dated as of December 1, 2022, between Old Gettysburg Associates III, 
LP and Select Medical Corporation, incorporated herein by reference to Exhibit 10.72 of the Annual Report on 
Form 10-K of Select Medical Holdings Corporation filed on February 23, 2023 (Reg No. 001-34465).
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87

Number
Description
 
10.59 Amendment No. 6, dated February 21, 2023, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019, Amendment No. 4, dated as of December 10, 2019 and Amendment No. 5, dated as of June 2, 
2021, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed on February 22, 2023 
(Reg. No. 001-34465).
 
10.60 Amendment No. 7, dated May 31, 2023, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 
2021 and Amendment No. 6, dated as of February 21, 2023, incorporated by reference to Exhibit 10.1 of the 
Current Report on Form 8-K, filed on June 6, 2023 (Reg. No. 001-34465).
 
10.61 Amendment No. 8, dated July 31, 2023, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 
2021, Amendment No. 6, dated as of February 21, 2023 and Amendment No. 7, dated as of May 31, 2023, 
incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed on August 1, 2023 (Reg. No. 
001-34465).
 
10.62 Amendment No. 9, dated August 31, 2023, to the Credit Agreement, dated March 6, 2017, by and among Select 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 
2021, Amendment No. 6, dated as of February 21, 2023, Amendment No. 7, dated as of May 31, 2023 and 
Amendment No. 8, dated as of July 31, 2023, incorporated by reference to Exhibit 10.1 of the Current Report on 
Form 8-K, filed on September 1, 2023 (Reg. No. 001-34465).
 
10.63 Offer Letter, by and between Select and Christopher S. Weigl, dated April 22, 2022, incorporated by reference to 
Exhibit 10.1 of the Current Report on Form 8-K, filed on March 1, 2023 (Reg. No. 001-34465).
 
10.64 Change of Control Agreement, dated as of November 6, 2023, between Select Medical Corporation and Michael 
F. Malatesta, incorporated herein by reference to Exhibit 10.73 of the Annual Report on Form 10-K of Select 
Medical Holdings Corporation filed on February 22, 2024 (Reg No. 001-34465).
 
10.65 Amendment No. 1, dated April 25, 2024, to the Select Medical Holdings Corporation 2020 Equity Incentive Plan, 
incorporated herein by reference to Appendix A of the Definitive Proxy Statement on Schedule 14A of Select 
Medical Holdings Corporation filed March 4, 2020 (Reg. No. 001-34465).
 
10.66 Separation Agreement, dated July 26, 2024, by and between Select Medical Corporation and Concentra Group 
Holdings Parent, Inc., incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed on 
August 1, 2024 (Reg. No. 001-34465).
 
10.67 Tax Matters Agreement, dated July 26, 2024, by and between Select Medical Holdings Corporation and 
Concentra Group Holdings Parent, Inc., incorporated by reference to Exhibit 10.2 of the Current Report on Form 
8-K, filed on August 1, 2024 (Reg. No. 001-34465).
 
10.68 Employee Matters Agreement, dated July 26, 2024, by and between Select Medical Corporation and Concentra 
Group Holdings Parent, Inc., incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K, filed 
on August 1, 2024 (Reg. No. 001-34465).
 
10.69 Transition Services Agreement, dated July 26, 2024, by and between Select Medical Corporation and Concentra 
Group Holdings Parent, Inc., incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K, filed 
on August 1, 2024 (Reg. No. 001-34465).
 
10.70 Amendment No, 10, dated July 26, 2024, to the Credit Agreement, dated March 6, 2017, by and among Medical 
Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent and 
Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment No. 1, dated 
as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as of August 1, 
2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 2021, 
Amendment No. 6, dated as of February 21, 2023, Amendment No. 7, dated as of May 31, 2023 and Amendment 
No. 8, dated as of July 31, 2023, and Amendment No. 9, dated as of August 31, 2023 incorporated by reference to 
Exhibit 10.5 of the Current Report on Form 8-K, filed on August 1, 2024 (Reg. No. 001-34465).
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88

Number
Description
 
10.71 Amendment No, 11, dated December 3, 2024, to the Credit Agreement, dated March 6, 2017, by and among 
Medical Holdings Corporation, Select Medical Corporation, JPMorgan Chase Bank, N.A., as Administrative 
Agent and Collateral Agent, and the other lenders and issuing banks party thereto, as amended by Amendment 
No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as 
of August 1, 2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 
2021, Amendment No. 6, dated as of February 21, 2023, Amendment No. 7, dated as of May 31, 2023 and 
Amendment No. 8, dated as of July 31, 2023, and Amendment No. 9, dated as of August 31, 2023 and 
Amendment No. 10, dated as of July 26, 2024, incorporated by reference to Exhibit 10.1 of the Current Report on 
Form 8-K, filed on August 1, 2024 (Reg. No. 001-34465).
 
19.1 Select Medical Holdings Corporation Insider Trading Policy
 
21.1 Subsidiaries of Select Medical Holdings Corporation.
 
23 Consent of PricewaterhouseCoopers LLP.
 
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
31.2 Certification of Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
 
32.1 Certification of Chief Executive Officer, and Executive Vice President and Chief Financial Officer pursuant to 18 
U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
97 Select Medical Holdings Corporation Compensation Recovery Policy, incorporated by reference to Exhibit 97 of 
the Annual Report on Form 10-K of Select Medical Holdings Corporation filed on February 22, 2024 (Reg No. 
001-34465).
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL 
tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
The representations, warranties, and covenants contained in the agreements set forth in this Exhibit Index were made 
only as of specified dates for the purposes of the applicable agreement, were made solely for the benefit of the parties to such 
agreement, and may be subject to qualifications and limitations agreed upon by the parties. In particular, the representations, 
warranties, and covenants contained in such agreement were negotiated with the principal purpose of allocating risk between 
the parties, rather than establishing matters as facts, and may have been qualified by confidential disclosures. Such 
representations, warranties, and covenants may also be subject to a contractual standard of materiality different from those 
generally applicable to stockholders and to reports and documents filed with the SEC. Accordingly, investors should not rely on 
such representations, warranties, and covenants as characterizations of the actual state of facts or circumstances described 
therein. Information concerning the subject matter of such representations, warranties, and covenants may change after the date 
of such agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures.
Item 16.    Form 10-K Summary.
None.
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89

Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused 
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SELECT MEDICAL HOLDINGS CORPORATION
By:
/s/ MICHAEL E. TARVIN
Michael E. Tarvin
 (Senior Executive Vice President, General Counsel and 
Secretary)
Date: February 20, 2025 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 
persons on behalf of the registrant and in the capacities indicated as of February 20, 2025.
/s/ ROBERT A. ORTENZIO
Robert A. Ortenzio
 Director, Executive Chairman and Co-Founder
/s/ DAVID S. CHERNOW
David S. Chernow
 Director, Chief Executive Officer 
(principal executive officer)
/s/ MICHAEL F. MALATESTA
Michael F. Malatesta
Executive Vice President, Chief Financial Officer
 (principal financial officer)
/s/ CHRISTOPHER S. WEIGL
Christopher S. Weigl
 Senior Vice President, Controller & Chief Accounting Officer
(principal accounting officer)
/s/ RUSSELL L. CARSON
Russell L. Carson
 Director
/s/ WILLIAM H. FRIST, M.D.
William H. Frist, M.D.
 Director
/s/ JAMES S. ELY III
James S. Ely III
 Director
/s/ DANIEL J. THOMAS
Daniel J. Thomas
 Director
/s/ THOMAS A. SCULLY
Thomas A. Scully
 Director
/s/ KATHERINE R. DAVISSON
Katherine R. Davisson
 Director
/s/ MARILYN B. TAVENNER
Marilyn B. Tavenner 
Director
/s/ PARVINDERJIT S. KHANUJA
Parvinderjit S. Khanuja
Director
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90

SELECT MEDICAL HOLDINGS CORPORATION
INDEX TO FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm (PCAOB ID 238)
 
F-2
Consolidated Balance Sheets
 
F-4
Consolidated Statements of Operations
 
F-5
Consolidated Statements of Comprehensive Income
F-6
Consolidated Statement of Changes in Equity and Income
 
F-7
Consolidated Statements of Cash Flows
 
F-8
Notes to Consolidated Financial Statements
 
F-9
Financial Statements Schedule II—Valuation and Qualifying Accounts
 
F-41
Table of Contents
F-1

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Select Medical Holdings Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Select Medical Holdings Corporation and its subsidiaries (the 
“Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, 
of changes in equity and income and of cash flows for each of the three years in the period ended December 31, 2024, including the 
related notes and financial statement schedule listed in the index appearing under Item 15(a)(ii) (collectively referred to as the 
“consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 
31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 
the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the 
period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also 
in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 
31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control 
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in 
Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express 
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based 
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) 
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and 
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether 
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of 
the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such 
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial 
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as 
well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial 
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material 
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our 
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits 
provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability 
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted 
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain 
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of 
the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial 
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being 
made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance 
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a 
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because 
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Table of Contents
F-2

Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial 
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or 
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or 
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial 
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the 
critical audit matter or on the accounts or disclosures to which it relates.
Valuation of patient accounts receivable
As described in Note 1 to the consolidated financial statements, substantially all of the Company’s accounts receivable is related to 
providing healthcare services to patients. These services are paid for primarily by federal and state governmental authorities, 
managed care health plans, commercial insurance companies, workers’ compensation programs, and employer-directed programs. 
As of December 31, 2024, accounts receivable of the Company totaled approximately $821.4 million. As disclosed by management, 
accounts receivable is reported at an amount equal to the amount management expects to collect for providing healthcare services to 
its patients. This amount is inclusive of management’s estimate of factors such as implicit discounts and other adjustments, which 
are estimated using historical experience. 
The principal considerations for our determination that performing procedures relating to the valuation of patient accounts 
receivable is a critical audit matter are the significant judgment by management in estimating accounts receivable at an amount 
equal to the consideration management expects to receive, which in turn led to a high degree of auditor judgment, subjectivity and 
audit effort in performing procedures and evaluating the audit evidence obtained in relation to the valuation of patient accounts 
receivable. 
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall 
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to 
management’s valuation of patient accounts receivable, including controls over management’s valuation approach, assumptions and 
data used to estimate patient accounts receivable. These procedures also included, among others: (i) evaluating management’s 
process for developing its estimate of patient accounts receivable; (ii) testing the completeness, accuracy, and relevance of the 
underlying data used to estimate patient accounts receivable, including historical billing and reimbursement data; (iii) evaluating the 
historical accuracy of management’s process for developing the estimate of the amount which management expects to collect by 
comparing actual cash receipts related to patient accounts receivable balances which existed as of the prior period balance sheet 
date; and (iv) for the Outpatient Rehabilitation segment, developing an independent expectation of the net accounts receivable 
balance. Developing an independent expectation involved calculating the percentage of cash collections as compared to the 
corresponding revenue transactions either throughout the year or as of the end of the prior year, applying those calculated 
percentages to the recorded accounts receivable balance as of December 31, 2024, and comparing the calculated balance to 
management’s estimate of the Outpatient Rehabilitation net accounts receivable balance.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania 
February 20, 2025
We have served as the Company’s auditor since 2005.
Table of Contents
F-3

PART I FINANCIAL INFORMATION
ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS
Select Medical Holdings Corporation
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
 
December 31, 2023
December 31, 2024
ASSETS
 
 
Current Assets:
 
 
Cash and cash equivalents
$ 
52,632 
$ 
59,694 
Accounts receivable
 
724,141 
 
821,385 
Prepaid income taxes
 
14,747 
 
26,601 
Current portion of interest rate cap contract
 
58,962 
 
— 
Current assets of discontinued operations
 
291,064 
 
— 
Other current assets
 
116,100 
 
112,097 
Total Current Assets
 
1,257,646 
 
1,019,777 
Operating lease right-of-use assets
 
790,764 
 
908,095 
Property and equipment, net
 
845,191 
 
872,185 
Goodwill
 
2,283,425 
 
2,331,898 
Identifiable intangible assets, net
 
105,147 
 
103,183 
Non-current assets of discontinued operations
 
2,039,142 
 
— 
Other assets
 
368,316 
 
372,813 
Total Assets
$ 
7,689,631 
$ 
5,607,951 
LIABILITIES AND EQUITY
 
 
Current Liabilities:
 
 
Overdrafts
$ 
30,274 
$ 
25,803 
Current operating lease liabilities
 
172,454 
 
179,601 
Current portion of long-term debt and notes payable
 
68,874 
 
20,269 
Accounts payable
 
153,899 
 
142,157 
Accrued and other liabilities
 
551,684 
 
609,821 
Current liabilities of discontinued operations
 
271,280 
 
— 
Total Current Liabilities
 
1,248,465 
 
977,651 
Non-current operating lease liabilities
 
668,557 
 
787,124 
Long-term debt, net of current portion
 
3,584,384 
 
1,691,546 
Non-current deferred tax liability
 
119,942 
 
81,497 
Non-current liabilities of discontinued operations
 
411,487 
 
— 
Other non-current liabilities
 
82,781 
 
73,038 
Total Liabilities
 
6,115,616 
 
3,610,856 
Commitments and contingencies (Note 20)
Redeemable non-controlling interests
 
26,297 
 
10,167 
Stockholders’ Equity:
 
 
Common stock, $0.001 par value, 700,000,000 shares authorized, 128,369,492 and 
128,962,850 shares issued and outstanding at 2023 and 2024, respectively
 
128 
 
129 
Capital in excess of par
 
493,413 
 
911,080 
Retained earnings
 
751,856 
 
770,146 
Accumulated other comprehensive income
 
42,907 
 
— 
Total Stockholders’ Equity
 
1,288,304 
 
1,681,355 
Non-controlling interests
 
259,414 
 
305,573 
Total Equity
 
1,547,718 
 
1,986,928 
Total Liabilities and Equity
$ 
7,689,631 
$ 
5,607,951 
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-4

Select Medical Holdings Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
 
For the Year Ended December 31,
 
2022
2023
2024
Revenue
$ 
4,609,179 
$ 
4,825,977 
$ 
5,187,105 
Costs and expenses:
 
 
 
Cost of services, exclusive of depreciation and amortization
 
4,207,686 
 
4,254,369 
 
4,553,461 
General and administrative
 
153,035 
 
170,193 
 
225,869 
Depreciation and amortization
 
132,158 
 
135,691 
 
142,866 
Total costs and expenses
 
4,492,879 
 
4,560,253 
 
4,922,196 
Other operating income
 
28,454 
 
1,518 
 
3,406 
Income from continuing operations before other income and expense
 
144,754 
 
267,242 
 
268,315 
Other income and expense:
 
 
 
Loss on early retirement of debt
 
— 
 
(14,692) 
 
(28,845) 
Equity in earnings of unconsolidated subsidiaries
 
27,984 
 
41,339 
 
63,904 
Interest expense
 
(137,470)  
(154,165) 
 
(128,605) 
Income from continuing operations before income taxes
 
35,268 
 
139,724 
 
174,769 
Income tax expense from continuing operations
 
16,723 
 
29,253 
 
44,782 
Income from continuing operations, net of tax
 
18,545 
 
110,471 
 
129,987 
Discontinued operations:
Income from discontinued business
 
225,311 
 
242,632 
 
223,414 
Income tax expense from discontinued business
 
45,830 
 
53,372 
 
56,697 
Income from discontinued operations, net of tax
 
179,481 
 
189,260 
 
166,717 
Net income
 
198,026 
 
299,731 
 
296,704 
Less: Net income attributable to non-controlling interests
 
39,032 
 
56,240 
 
82,666 
Net income attributable to Select Medical Holdings Corporation
$ 
158,994 
$ 
243,491 
$ 
214,038 
Net income attributable to Select Medical Holdings Corporation’s common stockholders:
Income (loss) from continuing operations, net of tax
$ 
(14,971) $ 
59,027 
$ 
65,473 
Income from discontinued operations, net of tax
 
173,965 
 
184,464 
 
148,565 
Net income attributable to Select Medical Holdings Corporation’s common stockholders
$ 
158,994 
$ 
243,491 
$ 
214,038 
Earnings (loss) per common share (Note 19):
Continuing operations - basic and diluted
$ 
(0.12) $ 
0.46 
$ 
0.51 
Discontinued operations - basic and diluted
 
1.35 
 
1.44 
 
1.15 
Total earnings per common share - basic and diluted
$ 
1.23 
$ 
1.91 (a) $ 
1.66 
______________________________________________________________________________
(a) 
Does not total due to rounding.
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-5

Select Medical Holdings Corporation
Consolidated Statements of Comprehensive Income
(in thousands)
 
For the Year Ended December 31,
 
2022
2023
2024
Net income
$ 
198,026 
$ 
299,731 
$ 
296,704 
Other comprehensive income (loss), net of tax:
Gain on interest rate cap contract
 
90,730 
 
15,783 
 
5,723 
Reclassification adjustment for gains included in net income
 
(14,410)  
(61,478)  
(48,630) 
Net change, net of tax (expense) benefit of $(24,658), $(15,202) and $13,550
 
76,320 
 
(45,695)  
(42,907) 
Comprehensive income
 
274,346 
 
254,036 
 
253,797 
Less: Comprehensive income attributable to non-controlling interests
 
39,032 
 
56,240 
 
82,666 
Comprehensive income attributable to Select Medical Holdings Corporation
$ 
235,314 
$ 
197,796 
$ 
171,131 
 
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-6

Select Medical Holdings Corporation
Consolidated Statements of Changes in Equity and Income
(in thousands)
 
 
Total Stockholders’ Equity
 
 
Common
Stock
Issued
Common
Stock
Par Value
Capital in
Excess
of Par
Retained
Earnings
Accumulated 
Other 
Comprehensive 
Income (Loss)
Total
Stockholders’
Equity
Non-
controlling
Interests
Total
Equity
Balance at December 31, 2021
 
133,884 
$ 
134 
$ 
504,314 
$ 
593,251 
$ 
12,282 
$ 1,109,981 
$ 
215,921 
$ 1,325,902 
Net income attributable to Select Medical 
Holdings Corporation
 
 
158,994 
 
158,994 
 
158,994 
Net income attributable to non-controlling 
interests
 
 
— 
 
31,460 
 
31,460 
Cash dividends declared for common 
stockholders ($0.50 per share)
 
(64,589) 
 
(64,589) 
 
(64,589) 
Issuance of restricted stock
 
1,642 
 
1 
 
(1) 
 
— 
 
— 
Forfeitures of unvested restricted stock
 
(98)  
0 
 
0 
 
64 
 
64 
 
64 
Vesting of restricted stock
 
35,550 
 
35,550 
 
35,550 
Repurchase of common shares
 
(8,255)  
(8)  
(87,838)  
(107,682) 
 
(195,528) 
 
(195,528) 
Issuance of non-controlling interests
 
665 
 
665 
 
9,505 
 
10,170 
Non-controlling interests acquired in 
business combination, measurement 
period adjustment
 
— 
 
12,463 
 
12,463 
Distributions to and purchases of non-
controlling interests
 
 
(507)  
(2,450) 
 
(2,957)  
(34,707)  
(37,664) 
Redemption value adjustment on non-
controlling interests
 
 
3,385 
 
3,385 
 
3,385 
Other comprehensive income
 
76,320 
 
76,320 
 
76,320 
Other
 
 
37 
 
37 
 
37 
Balance at December 31, 2022
 
127,173 
$ 
127 
$ 
452,183 
$ 
581,010 
$ 
88,602 
$ 1,121,922 
$ 
234,642 
$ 1,356,564 
Net income attributable to Select Medical 
Holdings Corporation
 
243,491 
 
243,491 
 
243,491 
Net income attributable to non-controlling 
interests
 
 
— 
 
48,153 
 
48,153 
Cash dividends declared for common 
stockholders ($0.50 per share)
 
(63,904) 
 
(63,904) 
 
(63,904) 
Issuance of restricted stock
 
1,651 
 
1 
 
(1) 
 
— 
 
— 
Forfeitures of unvested restricted stock
 
(12)  
0 
 
0 
 
12 
 
12 
 
12 
Vesting of restricted stock
 
43,619 
 
43,619 
 
43,619 
Repurchase of common shares
 
(443)  
0 
 
(5,184)  
(7,575) 
 
(12,759) 
 
(12,759) 
Issuance of non-controlling interests
 
 
1,870 
 
1,870 
 
21,181 
 
23,051 
Non-controlling interests acquired in 
business combination
 
— 
 
9,007 
 
9,007 
Distributions to and purchases of non-
controlling interests
 
 
927 
 
(2,672) 
 
(1,745)  
(53,569)  
(55,314) 
Redemption value adjustment on non-
controlling interests
 
 
1,527 
 
1,527 
 
1,527 
Other comprehensive loss
 
(45,695)  
(45,695) 
 
(45,695) 
Other
 
 
(1)  
(33) 
 
(34) 
 
(34) 
Balance at December 31, 2023
 
128,369 
$ 
128 
$ 
493,413 
$ 
751,856 
$ 
42,907 
$ 1,288,304 
$ 
259,414 
$ 1,547,718 
Net income attributable to Select Medical 
Holdings Corporation
 
 
 
 
214,038 
 
214,038 
 
214,038 
Net income attributable to non-controlling 
interests
 
 
 
 
 
— 
 
73,264 
 
73,264 
Cash dividends declared for common 
stockholders ($0.50 per share)
 
(64,617) 
 
(64,617) 
 
(64,617) 
Issuance of restricted stock
 
1,728 
 
2 
 
(2) 
 
 
— 
 
— 
Forfeitures of unvested restricted stock
 
(69)  
0 
 
0 
 
71 
 
71 
 
71 
Vesting of restricted stock
 
100,599 
 
100,599 
 
100,599 
Repurchase of common shares
 
(1,065)  
(1)  
(18,176)  
(19,728) 
 
(37,905) 
 
(37,905) 
Issuance of non-controlling interests
 
 
 
— 
 
27,200 
 
27,200 
Non-controlling interests acquired in 
business combination
 
— 
 
13,009 
 
13,009 
Distributions to and purchases of non-
controlling interests
 
 
 
394 
 
394 
 
(50,670)  
(50,276) 
Redemption value adjustment on non-
controlling interests
 
 
 
 
(1,947) 
 
(1,947) 
 
(1,947) 
Concentra Separation and Distribution
 
334,852 
 
(109,656) 
 
225,196 
 
(16,644)  
208,552 
Other comprehensive loss
 
(42,907)  
(42,907) 
 
(42,907) 
Other
 
 
 
129 
 
129 
 
129 
Balance at December 31, 2024
 
128,963 
$ 
129 
$ 
911,080 
$ 
770,146 
$ 
— 
$ 1,681,355 
$ 
305,573 
$ 1,986,928 
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-7

Select Medical Holdings Corporation
Consolidated Statements of Cash Flows
(in thousands)
 
For the Year Ended December 31,
 
2022
2023
2024
Operating activities
 
 
 
Net income
$ 
198,026 
$ 
299,731 
$ 
296,704 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Distributions from unconsolidated subsidiaries
 
21,911 
 
23,417 
 
39,178 
Depreciation and amortization
 
205,825 
 
208,742 
 
203,894 
Provision for expected credit losses
 
174 
 
1,030 
 
4,279 
Equity in earnings of unconsolidated subsidiaries
 
(26,407)  
(40,813)  
(60,228) 
Loss on extinguishment of debt
 
— 
 
175 
 
19,038 
Gain on sale of assets and businesses
 
(2,714)  
(57)  
(1,063) 
Stock compensation expense
 
37,755 
 
43,809 
 
100,670 
Amortization of debt discount, premium and issuance costs
 
2,272 
 
2,647 
 
2,963 
Deferred income taxes
 
7,521 
 
(16,119)  
(32,434) 
Changes in operating assets and liabilities, net of effects of business combinations:
 
 
 
Accounts receivable
 
(52,183)  
1,156 
 
(95,845) 
Other current assets
 
(4,866)  
(29,374)  
18,072 
Other assets
 
16,491 
 
10,031 
 
12,933 
Accounts payable
 
(48,042)  
(6,412)  
(16,789) 
Accrued expenses
 
12,852 
 
84,095 
 
26,492 
Government advances
 
(83,790)  
— 
 
— 
Net cash provided by operating activities
 
284,825 
 
582,058 
 
517,864 
Investing activities
 
 
 
Business combinations, net of cash acquired
 
(26,987)  
(29,567)  
(13,097) 
Purchases of property, equipment, and other assets
 
(190,372)  
(229,200)  
(222,177) 
Investment in businesses
 
(17,323)  
(9,873)  
— 
Proceeds from sale of assets and businesses
 
8,343 
 
163 
 
4,263 
Net cash used in investing activities
 
(226,339)  
(268,477)  
(231,011) 
Financing activities
 
 
 
Borrowings on revolving facilities
 
1,120,000 
 
905,000 
 
1,240,000 
Payments on revolving facilities
 
(835,000)  
(1,070,000)  
(1,415,000) 
Proceeds from term loans, net of issuance costs
 
— 
 
2,092,232 
 
1,880,052 
Payments on term loans
 
— 
 
(2,113,952)  
(2,092,485) 
Payment on senior notes, including call premium
 
— 
 
— 
 
(1,237,764) 
Proceeds from senior notes, net of issuance costs
 
— 
 
— 
 
1,176,598 
Borrowings of other debt
 
25,666 
 
31,399 
 
24,892 
Principal payments on other debt
 
(35,594)  
(46,946)  
(65,280) 
Dividends paid to common stockholders
 
(64,589)  
(63,904)  
(64,617) 
Repurchase of common stock
 
(195,528)  
(12,759)  
(37,905) 
Decrease in overdrafts
 
(10,392)  
(1,687)  
(4,471) 
Proceeds from issuance of non-controlling interests
 
9,530 
 
22,935 
 
15,713 
Distributions to and purchases of non-controlling interests
 
(43,107)  
(63,531)  
(60,001) 
Purchase of membership interests of Concentra Group Holdings Parent
 
(5,876)  
(6,268)  
— 
Proceeds from Concentra initial public offering
 
— 
 
— 
 
511,198 
Cash transferred to Concentra at separation
 
— 
 
— 
 
(182,095) 
Net cash used in financing activities
 
(34,890)  
(327,481)  
(311,165) 
Net increase (decrease) in cash and cash equivalents
 
23,596 
 
(13,900)  
(24,312) 
Cash and cash equivalents at beginning of period
 
74,310 
 
97,906 
 
84,006 
Cash and cash equivalents at end of period
$ 
97,906 
$ 
84,006 
$ 
59,694 
Supplemental information:
 
 
 
Cash paid for interest, excluding amounts received of $19,584, $82,818, and 
$68,069 under the interest rate cap contract for the years ended December 31, 2022, 
2023 and 2024, respectively.
$ 
183,453 
$ 
272,261 
$ 
256,229 
Cash paid for taxes
 
32,290 
 
88,510 
 
133,187 
Non-cash investing and financing activities:
Liabilities for purchases of property and equipment
$ 
51,529 
$ 
18,403 
$ 
21,784 
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-8

1.  
Organization and Significant Accounting Policies
Business Description
The consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) include the accounts of its 
wholly owned subsidiary, Select Medical Corporation (“Select”). Holdings conducts substantially all of its business through 
Select and its subsidiaries. Holdings and Select and its subsidiaries are collectively referred to as the “Company.”
The Company is, based on number of facilities, one of the largest operators of critical illness recovery hospitals, 
rehabilitation hospitals, and outpatient rehabilitation clinics in the United States. As of December 31, 2024, the Company had 
operations in 40 states and the District of Columbia. As of December 31, 2024, the Company operated 104 critical illness 
recovery hospitals, 35 rehabilitation hospitals, and 1,914 outpatient rehabilitation clinics.
On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra to 
its stockholders. Holders of the Company’s common stock received 0.806971 shares of Concentra common stock for each 
outstanding share of the Company’s common stock they owned as of November 18, 2024 (the “Record Date”). Following the 
completion of the distribution, the Company no longer owns any shares of Concentra common stock. The historical results of 
Concentra (which previously represented the Concentra business segment) are reflected as discontinued operations in the 
Company’s Consolidated Financial Statements through the date of the distribution (see Note 2, Acquisitions and Dispositions 
for additional details). Unless otherwise indicated, the information in the notes to the Consolidated Financial Statements refer 
only to the Company’s continuing operations.
The Company operates through three business segments: the critical illness recovery hospital segment, the rehabilitation 
hospital segment, and the outpatient rehabilitation segment. The Company’s critical illness recovery hospital segment consists 
of hospitals designed to serve the needs of patients recovering from critical illnesses, often with complex medical needs, and the 
rehabilitation hospital segment consists of hospitals designed to serve patients that require intensive physical rehabilitation care. 
Patients are typically admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals from general 
acute care hospitals. The Company’s outpatient rehabilitation segment consists of clinics that provide physical, occupational, 
and speech rehabilitation services. 
Recent Accounting Guidance Not Yet Adopted
Income Taxes
In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, 
which is intended to improve the transparency and decision usefulness of income tax disclosures. The ASU includes enhanced 
requirements on the rate reconciliation, including specific categories that must be disclosed, and provides a threshold over 
which reconciling items must be disclosed. The amendments in the update also require annual disclosure of income taxes paid, 
disaggregated by federal, state, and foreign taxes, as well as any individual jurisdictions in which income taxes paid is greater 
than 5% of total income taxes paid.
The Company will adopt ASU 2023-09 beginning with our annual reporting period ending December 31, 2025. The ASU 
can be applied either prospectively or retrospectively. The Company is currently reviewing ASU 2023-09, but does not expect it 
to have a significant impact on the disclosures in our consolidated financial statements. 
Expense Disaggregation
In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense 
Disaggregation Disclosures (Subtopic 220-40), which is intended to improve the disclosures of expenses by providing more 
detailed information about the types of expenses in commonly presented expense captions. The ASU requires entities to 
disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization 
included in each relevant expense caption; as well as a qualitative description of the amounts remaining in relevant expense 
captions that are not separately disaggregated quantitatively. The amendment also requires disclosure of the total amount of 
selling expense and, in annual reporting periods, an entity’s definition of selling expenses.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-9

The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after 
December 15, 2027; however early adoption is permitted. The ASU can be applied either prospectively or retrospectively. The 
Company is currently reviewing the impact that ASU 2024-03 will have on the disclosures in our consolidated financial 
statements.
Recently Adopted Accounting Guidance
Leases
In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 
2023-01, Leases (Topic 842): Common Control Arrangements, which requires companies to amortize leasehold improvements 
associated with related party leases under common control over the useful life of the leasehold improvement to the common 
control group. 
The Company adopted this ASU using the prospective method of transition on January 1, 2024. There was not a material 
impact on the Company’s consolidated financial statements upon adoption.
Segment Reporting
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment 
Disclosures, which is intended to improve disclosure of segment information so that investors can better understand an entity’s 
overall performance. The ASU requires entities to quantitatively disclose significant segment expenses that are regularly 
provided to the chief operating decision maker for each reportable segment, as well as the amount of other segment items for 
each reportable segment and a description of what the other segment items are comprised. Disclosure of multiple measures of 
profit or loss will be permitted by the ASU.
The Company adopted this ASU using the retrospective method of transition in this Form 10-K, resulting in updates to 
Note 15. Segment Information.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 
of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, 
liabilities, revenues, and expenses. Estimates and assumptions are used for, but not limited to: revenue recognition, allowances 
for expected credit losses, estimated useful lives of assets, the fair value of goodwill and intangible assets, the fair value of 
derivatives, amounts payable for self-insured losses, and the computation of income taxes. Future events and their effects 
cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The 
accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is 
acquired, as additional information is obtained, and as the Company’s operating environment changes. The Company’s 
management evaluates and updates assumptions and estimates on an ongoing basis. Actual results could differ from those 
estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of Holdings, Select, and the subsidiaries and variable interest 
entities in which the Company has a controlling financial interest. All intercompany balances and transactions are eliminated in 
consolidation.
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SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-10

Variable Interest Entities
Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices 
which directly employ physicians and from exercising control over medical decisions by physicians. In these states, the 
Company enters into long-term management agreements with medical practices that are owned by licensed physicians which, in 
turn, employ or contract with physicians who provide professional medical services in certain of its clinics. The agreements 
provide for the Company to direct the transfer of ownership of the medical practices to new licensed physicians at any time. 
Based on the provisions of the management agreements, the medical practices are variable interest entities for which the 
Company is the primary beneficiary. As of December 31, 2023 and 2024, the net assets of the Company’s variable interest 
entities, excluding intercompany obligations eliminated in consolidation, were $6.2 million and $7.2 million, respectively. 
Non-Controlling Interests
The ownership interests held by outside parties in subsidiaries controlled by the Company are classified as non-controlling 
interests. Net income or loss is attributed to the Company’s non-controlling interests. Some of the Company’s non-controlling 
ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to 
purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and 
have been adjusted to their approximate redemption values, after the attribution of net income or loss. 
Earnings per Share
The Company’s capital structure includes common stock and unvested restricted stock awards. To compute earnings per 
share (“EPS”), the Company applies the two-class method because the Company’s unvested restricted stock awards are 
participating securities which are entitled to participate equally with the Company’s common stock in undistributed earnings. 
Application of the Company’s two-class method is as follows:
(i)
Net income attributable to the Company is reduced by the amount of dividends declared and by the contractual amount 
of dividends that must be paid for the current period for each class of stock, if any.
(ii)
The remaining undistributed net income of the Company is then equally allocated to its common stock and unvested 
restricted stock awards, as if all of the earnings for the period had been distributed. The total net income allocated to 
each security is determined by adding both distributed and undistributed net income for the period. 
(iii) The net income allocated to each security is then divided by the weighted average number of outstanding shares for the 
period to determine the EPS for each security considered in the two-class method. 
The Company applies the treasury stock method when computing diluted EPS.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash 
equivalents. Cash equivalents are stated at cost which approximates fair value.
Accounts Receivable
Substantially all of the Company’s accounts receivable is related to providing healthcare services to patients. These 
services are paid for primarily by federal and state governmental authorities, managed care health plans, commercial insurance 
companies, workers’ compensation programs, and employer-directed programs. The Company’s general policy is to verify 
insurance coverage prior to the date of admission for patients admitted to its critical illness recovery hospitals and rehabilitation 
hospitals. Within the Company’s outpatient rehabilitation clinics, insurance coverage is verified prior to the patient’s visit. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-11

The Company performs periodic assessments to determine if an allowance for expected credit losses is necessary. The 
Company considers its incurred loss experience and adjusts for known and expected events and other circumstances. In 
estimating its expected credit losses, the Company may consider changes in the length of time its receivables have been 
outstanding, changes in credit ratings for its payors, requests from payors to alter payment terms due to financial difficulty, and 
notices of payor bankruptcies or payors entering receivership. Because the Company’s accounts receivable is typically paid for 
by highly-solvent, creditworthy payors, such as Medicare, other governmental programs, and highly-regulated commercial 
insurers on behalf of the patient, the Company’s credit losses have been infrequent and insignificant in nature. Amounts 
recognized for allowances for expected credit losses are immaterial to the consolidated financial statements.
Leases
The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease 
commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company 
classifies the lease as either an operating or finance lease. Most of the Company’s facility leases are classified as operating 
leases. 
A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability 
represents an obligation to make lease payments arising from a lease. Right-of-use assets and lease liabilities are measured at 
the present value of the remaining fixed lease payments at lease commencement. As most of the Company’s leases do not 
specify an implicit rate, the Company uses its incremental borrowing rate, which coincides with the lease term at the 
commencement of a lease, in determining the present value of its remaining lease payments. The Company’s leases may also 
specify extension or termination clauses; these options are factored into the measurement of the lease liability when it is 
reasonably certain that the Company will exercise the option. Right-of-use assets also include any prepaid lease payments and 
initial direct costs, less any lease incentive received, at the lease commencement date. 
The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single 
lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease 
components are accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and 
lease liability. 
For the Company’s operating leases, lease expense, a component of cost of services and general and administrative 
expense in the consolidated statements of operations, is recognized on a straight-line basis over the lease term. For the 
Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method and 
amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated 
useful life of the asset or the lease term. The Company also makes variable lease payments which are expensed as incurred. 
These payments relate to changes in indexes or rates after the lease commencement date, as well as property taxes, insurance, 
and common area maintenance which were not fixed at lease commencement. This expense is a component of cost of services 
and general and administrative expense in the consolidated statements of operations. 
The Company may enter into arrangements to sublease portions of its facilities and the Company typically retains the 
obligation to the lessor under these arrangements. The Company’s subleases are classified as operating leases; accordingly, the 
Company continues to account for the original leases as it did prior to commencement of the subleases. Sublease income, a 
component of cost of services in the consolidated statements of operations, is recognized on a straight-line basis, as a reduction 
to lease expense, over the term of the sublease.
The Company elected the short-term lease exemption for equipment leases; accordingly, equipment leases with terms of 
12 months or less are not recorded in the consolidated balance sheets. For these leases, the Company recognizes lease payments 
on a straight-line basis over the lease term and lease payments are expensed as incurred. These expenses are included as 
components of cost of services in the consolidated statements of operations.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-12

Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Maintenance and repairs of property and 
equipment are expensed as incurred. Improvements that increase the estimated useful life of an asset are capitalized. Direct 
internal and external costs of developing software for internal use, including programming and enhancements, are capitalized 
and depreciated over the estimated useful lives once the software is placed in service. Capitalized software costs are included 
within furniture and equipment. Software training costs, maintenance, and repairs are expensed as incurred. Depreciation and 
amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, as 
appropriate. The general range of useful lives is as follows:
Land improvements
5 – 25 years
Leasehold improvements
1 – 20 years
Buildings
40 years
Building improvements
5 – 40 years
Furniture and equipment
1 – 20 years
The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that 
the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future cash flows are 
less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the extent the 
carrying amount exceeds its estimated fair value.
Intangible Assets
Goodwill and indefinite-lived identifiable intangible assets
Goodwill and other indefinite-lived intangible assets are recognized primarily as the result of business combinations. 
Goodwill is assigned to reporting units based upon the specific nature of the business acquired or, when a business combination 
contains business components related to more than one reporting unit, goodwill is assigned to each reporting unit based upon an 
allocation determined by the relative fair values of the business acquired. When the Company disposes of a business, the 
Company allocates a portion of the reporting unit’s goodwill to that business based on the relative fair values of the portion of 
the reporting unit being disposed of and the portion of the reporting unit remaining. If the Company’s reporting units are 
reorganized, the Company reassigns goodwill based on the relative fair values of the new reporting units.
Goodwill and other indefinite-lived intangible assets are not amortized, but instead are subject to periodic impairment 
evaluations. The Company has elected to perform its annual impairment tests as of October 1. The Company also tests for 
impairment when events or conditions indicate that goodwill may be impaired. Events or conditions which might suggest 
impairment could include a significant change in the business environment, the regulatory environment, or legal factors; a 
current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale 
or disposition of a significant portion of a reporting unit.
The Company may assess qualitatively whether goodwill is more likely than not impaired or perform a quantitative 
impairment test. When performing a qualitative assessment, the Company considers relevant events or circumstances that affect 
the fair value or carrying amount of a reporting unit. If goodwill is more likely than not impaired, the Company must then 
complete a quantitative analysis. When performing a quantitative impairment test, the Company considers both the income and 
market approach in estimating the fair values of its reporting units. If the carrying value of a reporting unit exceeds its fair 
value, an impairment charge is recognized equal to the difference between the carrying amount of the reporting unit and its fair 
value, not to exceed the carrying value of goodwill of the reporting unit.
At December 31, 2024, the Company’s other indefinite-lived intangible assets consist of trademarks, certificates of need, 
and accreditations. To determine the fair values of its trademarks, the Company uses a relief from royalty income approach. For 
the Company’s certificates of need and accreditations, the Company performs qualitative assessments. As part of these 
assessments, the Company evaluates the current business environment, regulatory environment, legal and other company-
specific factors. If it is more likely than not that the fair values are less than the carrying values, the Company will then perform 
a quantitative impairment assessment.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-13

The Company’s most recent impairment assessments were completed as of October 1, 2024. The Company did not 
identify any instances of impairment with respect to goodwill or other indefinite-lived intangible assets.
Finite-lived intangible assets
Finite-lived intangible assets are amortized based on the pattern in which the economic benefits are consumed or 
otherwise depleted. If such a pattern cannot be reliably determined, finite-lived intangible assets are amortized on a straight-line 
basis over their estimated lives. The Company’s finite-lived intangible assets consist of non-compete agreements, which are 
amortized over the terms specified by the non-compete agreements. The estimated life of the Company’s non-compete 
agreements are 1 – 15 years.
The Company’s finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances 
indicate that the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future 
cash flows are less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the 
extent the carrying amount exceeds its estimated fair value.
Equity Method Investments
The Company applies the equity method of accounting for investments in which the Company has the ability to exercise 
significant influence over the operating and financial policies of the investee, but does not possess a controlling financial 
interest in the investee. These investments are recorded at their original cost and adjusted periodically to recognize the 
Company’s share of the investees’ net income or losses after the date of investment. Generally, the Company will discontinue 
applying the equity method when its share of net losses from the investee exceed the carrying amount of the Company’s 
investment. In these instances, the Company resumes accounting for the investment under the equity method if the investee 
subsequently reports net income and the Company’s share of that net income exceeds the share of the net losses not recognized 
during the period the equity method was suspended. The Company evaluates its equity method investments for impairment 
when events or circumstances suggest that the carrying amount of the investment may not be recoverable. If the Company 
determines that an equity method investment is other than temporarily impaired, it records an impairment charge equal to the 
difference between the investment’s carrying amount and its fair value. 
Income Taxes
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have 
been recognized in the Company’s financial statements. Deferred tax assets and liabilities are determined on the basis of the 
differences between the book and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the 
differences are expected to reverse. The Company also recognizes the future tax benefits from net operating loss carryforwards 
as deferred tax assets. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the 
period that includes the enactment date.
The Company evaluates the realizability of deferred tax assets and reduces those assets using a valuation allowance if it is 
more likely than not that some portion or all of the deferred tax asset will not be realized. Among the factors used to assess the 
likelihood of realization are projections of future taxable income streams, the expected timing of the reversals of existing 
temporary differences, and the impact of tax planning strategies that could be implemented to avoid the potential loss of future 
tax benefits.
Reserves for uncertain tax positions are established for exposure items related to various federal and state tax matters. 
Income tax reserves are recorded when an exposure is identified and when, in the opinion of management, it is more likely than 
not that a tax position will not be sustained and the amount of the liability can be estimated.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-14

Insurance Risk Programs
Under a number of the Company’s insurance programs, which include the Company’s employee health insurance, 
workers’ compensation, and professional malpractice liability insurance programs, the Company is liable for a portion of its 
losses before it can attempt to recover from the applicable insurance carrier. The Company accrues for losses under an 
occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period 
and accrues that estimated liability using actuarial methods. These programs are monitored quarterly and estimates are revised 
as necessary to take into account additional information. The Company also records insurance proceeds receivable for liabilities 
which exceed the Company’s deductibles and self-insured retention limits and are recoverable through its insurance policies. 
Revenue Recognition
Patient Service Revenues
Patient service revenues are recognized at an amount equal to the consideration the Company expects to be entitled to in 
exchange for providing healthcare services to its patients. Amounts owed for services provided are the obligations of the 
Company’s patients and can be paid for by third-party payors, including health insurers, government programs, and other 
payors on the patient’s behalf. Most of the Company’s patients are subject to healthcare coverage through a third-party payor 
arrangement. Given the nature and extent of third-party payor arrangements, the Company disaggregates its revenue by the 
following payor categories:
Medicare: Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some 
disabled persons, and persons with end stage renal disease. The Company determines the transaction price for services provided 
to patients who are Medicare beneficiaries using Medicare’s prospective payment systems and other payment methods. The 
expected payment is determined by the level of clinical services provided and is sensitive to the patient’s length of stay.
Non-Medicare: Non-Medicare payor sources include, but are not limited to, insurance companies (including Medicare 
Advantage plans), state Medicaid programs, workers’ compensation programs, health maintenance organizations, preferred 
provider organizations, other managed care companies and employers, as well as patients themselves. The transaction price for 
services provided to non-Medicare patients includes amounts prescribed by state and federal fee schedules, negotiated contract 
amounts, or usual and customary amounts associated with the specific payor or based on the service provided. The Company 
applies the portfolio approach in determining revenues for certain homogeneous non-Medicare patient populations. 
The Company’s principal revenue source comes from providing healthcare services to patients. For patients treated within 
the Company’s outpatient rehabilitation clinics, performance obligations are generally satisfied upon completion of the patient’s 
visit. For patients treated within the Company’s critical illness recovery and rehabilitation hospitals, the Company’s 
performance obligation is satisfied over the duration of the patient’s stay. As such, the Company recognizes revenue over the 
patient’s stay in amounts which are commensurate with the level of services provided to the patient. Any differences between 
the Company’s estimates of the transaction price, which may be impacted by various factors as described further below, and the 
payment received upon a patient’s discharge would be recognized as revenue in the period in which this change becomes 
known; such adjustments are not significant. The Company has an obligation to continue delivering treatment to patients 
admitted in the Company’s critical illness recovery and rehabilitation hospitals at the end of each reporting period. These 
performance obligations are typically satisfied in the subsequent month following the reporting period. The Company has 
elected the optional exemption which allows for the exclusion of disclosures regarding the transaction price allocated to 
unsatisfied performance obligations of contracts with a duration of less than one year. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-15

Revenue earned from providing services to patients is variable in nature, as the Company is required to make judgments 
which impact the transaction price, such as a patient’s condition and length of stay. These factors, among others, impact the 
payment the Company expects to receive for providing services. Variable consideration included in the transaction price is 
inclusive of the Company’s estimates of implicit discounts and other adjustments related to timely filing and documentation 
denials, out of network adjustments, and medical necessity denials, which are estimated using the Company’s historical 
experience. The Company is also subject to regular post-payment inquiries, investigations, and audits of the claims it submits 
for services provided. Some claims can take several years for resolution and may result in adjustments to the transaction price. 
Management includes in its estimates of the transaction price its expectations for these types of adjustments such that the 
amount of cumulative revenue recognized will not be subject to significant reversal in future periods. Historically, adjustments 
arising from a change in the transaction price have not been significant.
Other Revenues
The Company recognizes revenue for other services it provides, which principally consist of management and employee 
leasing services provided under contractual arrangements with related parties affiliated with the Company and non-affiliated 
healthcare institutions. The Company accounts for management and employee leasing services as single performance 
obligations satisfied over time. The transaction price is variable in nature and the Company recognizes revenue in amounts 
which are commensurate with the level of services provided during the period. The Company’s transaction price is determined 
such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods.
2.  
Acquisitions and Dispositions
Dispositions
On July 26, 2024, Concentra Group Holdings Parent (“Concentra”), a then wholly-owned subsidiary of Select, completed 
an initial public offering (“IPO”) of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public 
offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of 
$29.1 million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of Concentra’s 
common stock for net proceeds of $16.7 million after deducting discounts and commission of $1.0 million. Concentra shares 
began trading on the New York Stock Exchange under the symbol “CON” on July 25, 2024. In connection with the IPO, 
Concentra Health Services, Inc. (“CHSI”), a wholly-owned subsidiary of Concentra, entered into a senior secured credit 
agreement that provides for a $850.0 million term loan and a $400.0 million revolving credit facility. CHSI also issued 
$650.0 million of 6.875% senior notes.
After the closing of the IPO and underwriters option, Select owned 81.74% of the total outstanding shares of Concentra 
common stock. On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of 
Concentra to its stockholders. Following the completion of the distribution, the Company no longer owns any shares of 
Concentra common stock.
In connection with the separation and distribution, the Company and Concentra also entered into several agreements to 
govern various interim and ongoing relationships between the Company and Concentra, including a transition services 
agreement (“TSA”), a tax matters agreement and an employee matters agreement. The services under the TSA generally are a 
continuation of the support services provided by Select to Concentra prior to the IPO. The support services fees provided to 
Concentra after the distribution were $1.2 million for the year ended December 31, 2024. The income from the support services 
fees, as well as the cost to provide these services, are included within General and Administrative expense on the Consolidated 
Statements of Operations. The services under the TSA are expected to terminate no later than 24 months following the 
Concentra Distribution. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1.  
Organization and Significant Accounting Policies (Continued)
F-16

Prior to the distribution, Concentra had historically been a separate reportable segment. Concentra’s balance sheet position 
as of December 31, 2023 is presented as assets of discontinued operations and liabilities of discontinued operations in the 
Consolidated Balance Sheet, and is summarized as follows:
 
December 31, 2023
ASSETS
 
Current Assets:
 
Cash and cash equivalents
$ 
31,374 
Accounts receivable
 
216,194 
Prepaid income taxes
 
7,979 
Other current assets
 
35,517 
Total current assets of discontinued operations
 
291,064 
Non-current Assets:
Operating lease right-of-use assets
 
397,852 
Property and equipment, net
 
178,370 
Goodwill
 
1,229,745 
Identifiable intangible assets, net
 
224,769 
Other assets
 
8,406 
Total non-current assets of discontinued operations
 
2,039,142 
Total assets of discontinued operations
$ 
2,330,206 
LIABILITIES 
 
Current Liabilities:
 
Current operating lease liabilities
 
72,946 
Current portion of long-term debt and notes payable
 
1,455 
Accounts payable
 
20,413 
Accrued and other liabilities
 
176,466 
Total current liabilities of discontinued operations
 
271,280 
Non-current Liabilities:
Non-current operating lease liabilities
 
357,310 
Long-term debt, net of current portion
 
3,291 
Non-current deferred tax liability
 
23,364 
Other non-current liabilities
 
27,522 
Total non-current liabilities of discontinued operations
 
411,487 
Total liabilities of discontinued operations
$ 
682,767 
The results of Concentra are presented as discontinued operations and, as such, have been excluded from both continuing 
operations and segment results for the years ended December 31, 2022, 2023, and 2024. As a result of the distribution of 
Concentra, Select recognized transaction related costs of $14.7 million for the year ended December 31, 2024, which are 
included in Income from discontinued business. Concentra recognized separation transaction costs of $1.6 million for the year 
ended December 31, 2024, which are included in Income from discontinued business. These costs represent incremental 
consulting, legal, and audit-related fees incurred in connection with the Company’s separation and distribution of the Concentra 
segment.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.  
Acquisitions and Dispositions (Continued)
F-17

Certain key selected financial information included in Income from discontinued operations, net of tax, for Concentra is as 
follows:
 
For the Year Ended December 31,
 
2022
2023
2024
Revenue
$ 
1,724,359 
$ 
1,838,081 
$ 
1,738,411 
Costs and expenses:
 
 
 
Cost of services, exclusive of depreciation and amortization
 
1,392,475 
 
1,477,648 
 
1,374,783 
General and administrative
 
— 
 
— 
 
1,620 
Depreciation and amortization
 
73,667 
 
73,051 
 
61,028 
Total costs and expenses
 
1,466,142 
 
1,550,699 
 
1,437,431 
Other operating income
 
312 
 
250 
 
284 
Income from operations
 
258,529 
 
287,632 
 
301,264 
Other income and expense:
Equity in earnings of unconsolidated subsidiaries
 
(1,577)  
(526)  
(3,676) 
Interest expense(1)
 
(31,641)  
(44,474)  
(59,513) 
Income from discontinued operations before income taxes
 
225,311 
 
242,632 
 
238,075 
Income tax expense
 
45,830 
 
53,372 
 
56,756 
Income from discontinued operations, net of tax
 
179,481 
 
189,260 
 
181,319 
Less: Net income attributable to non-controlling interests
 
5,516 
 
4,796 
 
18,152 
Income from discontinued operations, net of tax, attributable to Select Medical Holdings 
Corporation’s common stockholders
$ 
173,965 
$ 
184,464 
$ 
163,167 
_______________________________________________________________________________
(1) 
For the years ended December 31, 2022, 2023, and 2024, interest expense includes allocated interest expense of $31.1 
million, $44.3 million, and $22.0 million, respectively. Interest was allocated in accordance with the terms of an intercompany 
promissory note in place between the Company and Concentra prior to the separation. 
The following is selected financial information included on the Consolidated Statements of Cash Flows for Concentra:
 
For the Year Ended December 31,
 
2022
2023
2024
Depreciation and amortization
 
73,667 
 
73,051 
 
61,028 
Cash flows from investing activities:
Purchases of property, equipment, and other assets
$ 
45,983 
$ 
69,340 
$ 
63,269 
The following table reconciles the cash and cash equivalents balance at December 31, 2023 between cash and cash 
equivalents from continuing operations and cash and cash equivalents from discontinued operations. Cash and cash equivalents 
from discontinued operations is included within Current assets of discontinued operations on the Consolidated Balance Sheet.
December 31, 2023
Cash and cash equivalents from continuing operations
$ 
52,632 
Cash and cash equivalents from discontinued operations
 
31,374 
Cash and cash equivalents
$ 
84,006 
Acquisitions
During the year ended December 31, 2022, the Company made acquisitions consisting of critical illness recovery hospital 
and outpatient rehabilitation businesses. The consideration given for these acquired businesses consisted principally of $17.3 
million of cash. The Company allocated the purchase price of these acquired businesses to assets acquired and liabilities 
assumed, principally property and equipment and operating lease right-of-use assets and lease liabilities, based on their 
estimated fair values. The Company recognized goodwill of $6.5 million and $10.9 million in our critical illness recovery 
hospital and outpatient rehabilitation reporting units, respectively.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.  
Acquisitions and Dispositions (Continued)
F-18

During the year ended December 31, 2023, the Company made acquisitions consisting of critical illness recovery hospital, 
rehabilitation hospital, and outpatient rehabilitation businesses. The consideration given for these acquired businesses consisted 
principally of $23.6 million of cash and the issuance of $9.0 million of non-controlling interests. The Company allocated the 
purchase price of these acquired businesses to assets acquired and liabilities assumed, principally property and equipment and 
operating lease right-of-use assets and lease liabilities, based on their estimated fair values. The Company recognized goodwill 
of $6.6 million, $16.2 million, and $2.3 million in our critical illness recovery hospital, rehabilitation hospital, and outpatient 
rehabilitation reporting units, respectively.
During the year ended December 31, 2024, the Company made acquisitions consisting of critical illness recovery hospital, 
rehabilitation hospital, and outpatient rehabilitation businesses. The consideration given for these acquired businesses consisted 
of $12.1 million of cash, $20.3 million of previously held equity interests, and $24.5 million for the issuance of non-controlling 
interests. The Company allocated the purchase price of these acquired businesses to assets acquired and liabilities assumed, 
principally property and equipment and operating lease right-of-use assets and lease liabilities, based on their estimated fair 
values. The Company recognized goodwill of $8.0 million, $38.4 million, and $1.7 million in our critical illness recovery 
hospital, rehabilitation hospital, and outpatient rehabilitation reporting units, respectively.
3.  
Credit Risk and Payor Concentrations
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash 
balances and accounts receivable. The Company’s excess cash is held with large financial institutions. The Company grants 
unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-
party payor agreements.
Because of the diversity in the Company’s non-governmental third-party payor base, as well as their geographic 
dispersion, accounts receivable due from the Medicare program represent the Company’s only significant concentration of 
credit risk. Approximately 22% and 21% of the Company’s accounts receivable is due from Medicare at December 31, 2023 
and 2024, respectively.
Revenues from providing services to patients covered under the Medicare program represented approximately 31%, 31%, 
and 29% of the Company’s total revenue for the years ended December 31, 2022, 2023, and 2024, respectively. As a provider 
of services under the Medicare program, the Company is subject to extensive regulations. The inability of any of the 
Company’s critical illness recovery hospitals, rehabilitation hospitals, or outpatient rehabilitation clinics to comply with 
Medicare regulations can result in the Company receiving significantly less Medicare payments than the Company currently 
receives for the services it provides to its patients. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.  
Acquisitions and Dispositions (Continued)
F-19

4.  
Leases
The Company has operating and finance leases for its facilities. The Company leases its corporate office space from 
related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 to 
20 years with two, five year renewal options. These renewal options vary for hospitals which operate as a hospital within a 
hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five to 10 years with two, 
three to five year renewal options.
The Company’s total lease cost from continuing operations is as follows:
For the Year Ended December 31, 
2022
2023
2024
Unrelated 
Parties
Related 
Parties
Total
Unrelated 
Parties
Related 
Parties
Total
Unrelated 
Parties
Related 
Parties
Total
(in thousands)
Operating lease cost
$ 207,446 
$ 
7,245 
$ 214,691 
$ 212,360 
$ 
7,335 
$ 219,695 
$ 226,866 
$ 
7,335 
$ 234,201 
Finance lease cost:
Amortization of right-of-use 
assets
 
572 
 
— 
 
572 
 
572 
 
— 
 
572 
 
572 
 
— 
 
572 
Interest on lease liabilities
 
1,026 
 
— 
 
1,026 
 
1,013 
 
— 
 
1,013 
 
984 
 
— 
 
984 
Short-term lease cost
 
74 
 
— 
 
74 
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
Variable lease cost
 
38,868 
 
462 
 
39,330 
 
45,086 
 
84 
 
45,170 
 
47,678 
 
16 
 
47,694 
Sublease income
 
(7,803)  
— 
 
(7,803) 
 
(6,725)  
— 
 
(6,725) 
 
(6,875)  
— 
 
(6,875) 
Total lease cost from 
continuing operations
$ 240,183 
$ 
7,707 
$ 247,890 
$ 252,306 
$ 
7,419 
$ 259,725 
$ 269,225 
$ 
7,351 
$ 276,576 
Supplemental cash flow information related to leases is as follows:
For the Year Ended December 31,
2022
2023
2024
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities (1):
Operating cash flows for operating leases
$ 
308,085 
$ 
317,256 
$ 
321,271 
Operating cash flows for finance leases
 
1,335 
 
1,239 
 
1,104 
Financing cash flows for finance leases
 
1,472 
 
1,617 
 
1,347 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases
 
234,616 
 
171,569 
 
299,111 
_______________________________________________________________________________
(1) 
Cash flows include cash paid for operating and finance leases of discontinued operations.
Supplemental balance sheet information related to leases is as follows:
December 31,
2023
2024
Unrelated 
Parties
Related 
Parties
Total
Unrelated 
Parties
Related 
Parties
Total
Operating Leases
(in thousands)
Operating lease right-of-use assets
$ 
761,173 
$ 
29,591 
$ 
790,764 
$ 
885,457 
$ 
22,638 
$ 
908,095 
Current operating lease liabilities
$ 
166,861 
$ 
5,593 
$ 
172,454 
$ 
173,189 
$ 
6,412 
$ 
179,601 
Non-current operating lease liabilities
 
643,273 
 
25,284 
 
668,557 
 
768,546 
 
18,578 
 
787,124 
Total operating lease liabilities
$ 
810,134 
$ 
30,877 
$ 
841,011 
$ 
941,735 
$ 
24,990 
$ 
966,725 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-20

December 31,
2023
2024
Unrelated 
Parties
Related 
Parties
Total
Unrelated 
Parties
Related 
Parties
Total
Finance Leases
(in thousands)
Property and equipment, net
$ 
3,922 
$ 
— 
$ 
3,922 
$ 
3,350 
$ 
— 
$ 
3,350 
Current portion of long-term debt and notes payable
$ 
765 
$ 
— 
$ 
765 
$ 
798 
$ 
— 
$ 
798 
Long-term debt, net of current portion
 
10,812 
 
— 
 
10,812 
 
10,014 
 
— 
 
10,014 
Total finance lease liabilities
$ 
11,577 
$ 
— 
$ 
11,577 
$ 
10,812 
$ 
— 
$ 
10,812 
The weighted average remaining lease terms and discount rates are as follows:
December 31,
2023
2024
Weighted average remaining lease term (in years):
Operating leases
8.2
9.2
Finance leases
31.9
32.8
Weighted average discount rate:
Operating leases
 6.1 %
 6.6 %
Finance leases
 7.2 %
 7.1 %
As of December 31, 2024, maturities of lease liabilities are approximately as follows:
Operating Leases
Finance Leases
(in thousands)
2025
$ 
235,497 
$ 
1,551 
2026
 
212,432 
 
1,564 
2027
 
173,221 
 
1,036 
2028
 
125,025 
 
656 
2029
 
94,359 
 
656 
Thereafter
 
533,659 
 
22,621 
Total undiscounted cash flows
 
1,374,193 
 
28,084 
Less: Imputed interest
 
407,468 
 
17,272 
Total discounted lease liabilities
$ 
966,725 
$ 
10,812 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4.  
Leases (Continued)
F-21

5.  
Property and Equipment
The Company’s property and equipment consists of the following:
 
December 31,
 
2023
2024
 
(in thousands)
Land
$ 
92,385 
$ 
96,255 
Leasehold improvements
 
538,841 
 
565,320 
Buildings
 
576,765 
 
601,615 
Furniture and equipment
 
649,390 
 
686,042 
Construction-in-progress
 
40,874 
 
84,620 
Total property and equipment
 
1,898,255 
 
2,033,852 
Accumulated depreciation
 
(1,053,064)  
(1,161,667) 
Property and equipment, net
$ 
845,191 
$ 
872,185 
Depreciation expense was $130.3 million, $134.1 million, and $141.1 million for the years ended December 31, 2022, 
2023, and 2024, respectively.
6.  
Intangible Assets
Goodwill
The following table shows changes in the carrying amounts of goodwill by reporting unit for the years ended 
December 31, 2023 and 2024:
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Total
 
(in thousands)
Balance as of January 1, 2023
$ 
1,151,196 
$ 
442,155 
$ 
664,978 
$ 
2,258,329 
Acquisition of businesses
 
6,606 
 
16,185 
 
2,305 
 
25,096 
Balance as of December 31, 2023
 
1,157,802 
 
458,340 
 
667,283 
 
2,283,425 
Acquisition of businesses
 
8,000 
 
38,367 
 
1,666 
 
48,033 
Measurement period adjustment
 
— 
 
440 
 
— 
 
440 
Balance as of December 31, 2024
$ 
1,165,802 
$ 
497,147 
$ 
668,949 
$ 
2,331,898 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-22

Identifiable Intangible Assets
The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the 
Company’s identifiable intangible assets:
 
December 31,
 
2023
2024
 
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
 
(in thousands)
Indefinite-lived intangible assets:
 
 
 
 
 
 
Trademarks
$ 
61,798 
$ 
— 
$ 
61,798 
$ 
61,798 
$ 
— 
$ 
61,798 
Certificates of need
 
26,183 
 
— 
 
26,183 
 
26,393 
 
— 
 
26,393 
Accreditations
 
1,836 
 
— 
 
1,836 
 
1,775 
 
— 
 
1,775 
Finite-lived intangible assets:
 
 
 
 
 
Non-compete agreements
 
31,179 
 
(15,849)  
15,330 
 
31,735 
 
(18,518)  
13,217 
Total identifiable intangible assets
$ 
120,996 
$ 
(15,849) $ 
105,147 
$ 
121,701 
$ 
(18,518) $ 
103,183 
The Company’s accreditations and trademarks have renewal terms and the costs to renew these intangible assets are 
expensed as incurred. At December 31, 2024, the accreditations and trademarks have a weighted average time until next 
renewal of 1.5 years and 5.8 years, respectively.
The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $1.8 
million, $1.6 million, and $1.6 million for the years ended December 31, 2022, 2023, and 2024, respectively.
Estimated amortization expense of the Company’s finite-lived intangible assets for each of the five succeeding years is as 
follows:
2025
2026
2027
2028
2029
(in thousands)
Amortization expense
$ 
1,613 
$ 
1,613 
$ 
1,613 
$ 
1,613 
$ 
1,613 
7.  
Equity Method Investments
The Company’s equity method investments consist principally of minority ownership interests in rehabilitation 
businesses. Equity method investments of $316.0 million and $320.9 million are presented as part of other assets in the 
consolidated balance sheets as of December 31, 2023 and 2024, respectively. At December 31, 2024, these businesses primarily 
consist of the following ownership interests:
BIR JV, LLP
 49.0 %
OHRH, LLC
 49.0 %
GlobalRehab—Scottsdale, LLC
 49.0 %
ES Rehabilitation, LLC
 49.0 %
BHSM Rehabilitation, LLC
 49.0 %
RSH Property Ventures, LLC
 50.0 %
The Company provides contracted services, principally employee leasing services, and charges management fees to 
related parties affiliated through its equity method investments. Revenue generated from contracted services provided and 
management fees charged to related parties affiliated through the Company’s equity method investments was $374.1 million, 
$402.8 million, and $430.3 million for the years ended December 31, 2022, 2023, and 2024, respectively.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6.  
Intangible Assets (Continued)
F-23

The Company had receivables from related parties affiliated through its equity method investments of $18.2 million and 
$4.5 million, which are included as part of other current assets and other assets in the consolidated balance sheet, respectively, 
as of December 31, 2023. The Company had receivables from related parties of $17.8 million and $2.2 million, which are 
included as part of other current assets and other assets in the consolidated balance sheet, respectively, as of December 31, 
2024.
The Company had liabilities for the operating cash it holds on behalf of certain rehabilitation businesses in which it has an 
equity method investment. These liabilities were $66.3 million and $59.0 million as of December 31, 2023 and 2024, 
respectively, and are included as part of accrued other in the consolidated balance sheets. 
Summarized combined financial information of the rehabilitation businesses in which the Company has a minority 
ownership interest is as follows: 
December 31,
2023
2024
(in thousands)
Current assets
$ 
229,920 
$ 
250,619 
Non-current assets
 
523,762 
 
522,412 
Total assets
$ 
753,682 
$ 
773,031 
Current liabilities
$ 
91,614 
$ 
100,721 
Non-current liabilities
 
225,209 
 
213,345 
Equity
 
436,859 
 
458,965 
Total liabilities and equity
$ 
753,682 
$ 
773,031 
For the Year Ended December 31,
2022
2023
2024
(in thousands)
Revenues
$ 
624,348 
$ 
702,040 
$ 
766,197 
Cost of services and other operating expenses
 
566,014 
 
621,107 
 
664,172 
Net income
 
57,811 
 
81,122 
 
99,386 
8.  
Insurance Risk Programs
Under a number of the Company’s insurance programs, which include the Company’s employee health insurance, 
workers’ compensation, and professional malpractice liability insurance programs, the Company is liable for a portion of its 
losses before it can attempt to recover from the applicable insurance carrier. The Company accrues for losses under an 
occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period 
and accrues that estimated liability using actuarial methods. At December 31, 2023 and 2024, provisions for losses for 
professional liability risks retained by the Company have been discounted at 3%. 
The Company recorded a liability of $132.1 million and $141.6 million related to these programs at December 31, 2023 
and 2024, respectively. If the Company did not discount the provisions for losses for professional liability risks, the aggregate 
liability for all of the insurance risk programs would be approximately $135.6 million and $145.4 million at December 31, 2023 
and 2024, respectively. At December 31, 2023 and 2024, the Company recorded insurance proceeds receivable of $8.1 million 
and $8.5 million, respectively, for liabilities which exceeded its deductibles and self-insured retention limits and are recoverable 
through its insurance policies.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.  
Equity Method Investments (Continued)
F-24

9.  
Accrued and other liabilities
The following table sets forth the components of accrued and other liabilities on the Consolidated Balance Sheets:
December 31,
 
2023
2024
 
(in thousands)
Accrued payroll
$ 
175,944 
$ 
183,045 
Accrued vacation
 
116,260 
 
122,376 
Accrued interest
 
32,049 
 
9,075 
Accrued other
 
226,332 
 
288,681 
Income taxes payable
 
1,099 
 
6,644 
Accrued and other liabilities
$ 
551,684 
$ 
609,821 
10.  Interest Rate Cap
The Company had an interest rate derivative to mitigate its market risk exposure arising from changes in interest rates on 
its term loan, which bears interest at a rate that is indexed to one-month Term SOFR. The interest rate cap limited the 
Company’s exposure to increases in the variable rate index to 1.0% on $2.0 billion of principal outstanding under the term loan. 
The interest rate cap was effective for the monthly periods from and including April 30, 2021 through September 30, 2024. 
The interest rate cap was designated as a cash flow hedge and changes in the fair value of the interest rate cap, net of tax, 
were recognized in other comprehensive income and were reclassified out of accumulated other comprehensive income or loss 
and into interest expense when the hedged interest obligations affected earnings. 
The following table outlines the changes in accumulated other comprehensive income, net of tax, during the periods 
presented:
For the Year Ended December 31,
2022
2023
2024
(in thousands)
Balance as of January 1
$ 
12,282 
$ 
88,602 
$ 
42,907 
Gain on interest rate cap contract
 
90,730 
 
15,783 
 
5,723 
Amounts reclassified from accumulated other comprehensive income
 
(14,410)  
(61,478)  
(48,630) 
Balance as of December 31
$ 
88,602 
$ 
42,907 
$ 
— 
The effects on net income of amounts reclassified from accumulated other comprehensive income are as follows:
For the Year Ended December 31,
Statement of Operations
2022
2023
2024
(in thousands)
Gains included in interest expense
$ 
19,086 
$ 
80,766 
$ 
63,987 
Income tax expense
 
(4,676)  
(19,288)  
(15,357) 
Amounts reclassified from accumulated other comprehensive income
$ 
14,410 
$ 
61,478 
$ 
48,630 
Refer to Note 11 – Fair Value of Financial Instruments for information on the fair value of the Company’s interest rate 
cap contract and its balance sheet classification. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-25

11.  Fair Value of Financial Instruments
Financial instruments which are measured at fair value, or for which a fair value is disclosed, are classified in the fair 
value hierarchy, as outlined below, on the basis of the observability of the inputs used in the fair value measurement:
•
Level 1 – inputs are based upon quoted prices for identical instruments in active markets. 
•
Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical 
or similar instruments in markets that are not active, and model-based valuation techniques for which all significant 
inputs are observable in the market or can be corroborated by observable market data. 
•
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that 
market participants would use in pricing the instrument.
The Company’s interest rate cap contract was recorded at its fair value in the consolidated balance sheets on a recurring 
basis. The fair value of the interest rate cap contract was based upon a model-derived valuation using observable market inputs, 
such as interest rates and interest rate volatility, and the strike price (Level 2). 
The Company does not measure its indebtedness at fair value in its consolidated balance sheets. The fair value of the 
credit facilities is based on quoted market prices for this debt in the syndicated loan market. The fair value of the senior notes is 
based on quoted market prices. The carrying value of the Company’s other debt, as disclosed in Note 12 – Long-Term Debt and 
Notes Payable, approximates fair value. 
December 31, 2023
December 31, 2024
Financial Instrument
Level
Carrying Value
Fair Value
Carrying Value
Fair Value
(in thousands)
6.250% senior notes due 2026
Level 2
$ 
1,232,596 
$ 
1,228,063 
$ 
— 
$ 
— 
6.250% senior notes due 2032
Level 2
 
— 
 
— 
 
539,363 
 
528,000 
Credit facilities:
Revolving facility
Level 2
 
280,000 
 
278,600 
 
105,000 
 
102,900 
Term loan
Level 2
 
2,077,216 
 
2,092,485 
 
1,041,661 
 
1,051,313 
The Company’s other financial instruments, which primarily consist of cash and cash equivalents, accounts receivable, 
and accounts payable approximate fair value because of the short-term maturities of these instruments. 
12. Long-Term Debt and Notes Payable
As of December 31, 2024, the Company’s long-term debt and notes payable are as follows: 
 
Principal 
Outstanding
Unamortized 
Premium 
(Discount)
Unamortized 
Issuance Costs
Carrying Value
Fair Value
(in thousands)
6.250% senior notes due 2032
$ 
550,000 
$ 
— 
$ 
(10,637) $ 
539,363 
$ 
528,000 
Credit facilities:
Revolving facility
 
105,000 
 
— 
 
— 
 
105,000 
 
102,900 
Term loan
 
1,050,000 
 
(2,693)  
(5,646)  
1,041,661 
 
1,051,313 
Other debt, including finance leases
 
26,282 
 
— 
 
(491)  
25,791 
 
25,791 
Total debt
$ 
1,731,282 
$ 
(2,693) $ 
(16,774) $ 
1,711,815 
$ 
1,708,004 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-26

Principal maturities of the Company’s long-term debt and notes payable are approximately as follows:
 
2025
2026
2027
2028
2029
Thereafter
Total
(in thousands)
6.250% senior notes due 2032
$ 
— 
$ 
— 
$ 
— 
$ 
— 
$ 
— 
$ 
550,000 
$ 
550,000 
Credit facilities:
Revolving facility
 
— 
 
— 
 
— 
 
— 
 
105,000 
 
— 
 
105,000 
Term loan
 
10,500 
 
10,500 
 
10,500 
 
10,500 
 
10,500 
 
997,500 
 
1,050,000 
Other debt, including finance leases
 
9,769 
 
2,186 
 
1,637 
 
54 
 
58 
 
12,578 
 
26,282 
Total debt
$ 
20,269 
$ 
12,686 
$ 
12,137 
$ 
10,554 
$ 
115,558 
$ 
1,560,078 
$ 
1,731,282 
As of December 31, 2023, the Company’s long-term debt and notes payable are as follows:
 
Principal 
Outstanding
Unamortized 
Premium 
(Discount)
Unamortized 
Issuance Costs
Carrying Value
Fair Value
(in thousands)
6.250% senior notes due 2026
$ 
1,225,000 
$ 
15,533 
$ 
(7,937) $ 
1,232,596 
$ 
1,228,063 
Credit facilities:
 
Revolving facility
 
280,000 
 
— 
 
— 
 
280,000 
 
278,600 
Term loan
 
2,092,485 
 
(12,040)  
(3,229)  
2,077,216 
 
2,092,485 
Other debt, including finance leases
 
63,509 
 
— 
 
(63)  
63,446 
 
63,446 
Total debt
$ 
3,660,994 
$ 
3,493 
$ 
(11,229) $ 
3,653,258 
$ 
3,662,594 
Credit Facilities
On March 6, 2017, Select entered into a senior secured credit agreement (the “credit agreement”). On July 26, 2024, the 
Company entered into Amendment No. 10 to the credit agreement. Amendment No. 10 reduced the revolving credit facility 
commitments available under the credit agreement from $770.0 million to $550.0 million. Select also made a voluntary 
prepayment of $1,640.4 million on its term loan and a $300.0 million repayment on its revolving credit facility using the 
proceeds derived from the Concentra IPO, as described in Note 2, Acquisitions and Dispositions, as well as proceeds from 
Concentra’s issuance of debt in connection with the IPO.
On December 3, 2024, the Company entered into Amendment No. 11 to the credit agreement. Amendment No. 11 
established a new incremental term loan in the aggregate amount of $1,050.0 million to replace the existing term loans. The 
maturity date of the term loan is December 3, 2031. In addition, Amendment No. 11 extended the maturity date of the revolving 
credit facility to December 3, 2029 and increased the revolving credit facility commitments from $550.0 million to 
$600.0 million. 
At December 31, 2024, Select had $453.3 million of availability under the revolving facility after giving effect to $105.0 
million of outstanding borrowings and $41.7 million of outstanding letters of credit.
The interest rate on the term loan is equal to Term SOFR plus 2.00%, or the Alternative Base Rate (as defined in the credit 
agreement) plus 1.00%. The interest rate on the revolving facility is equal to Adjusted Term SOFR plus a percentage ranging 
from 2.25% to 2.50%, or the Alternative Base Rate (as defined in the credit agreement) plus a percentage ranging from 1.25% 
to 1.50%, in each case subject to a specified leverage ratio. As of December 31, 2024, the term loan borrowings bear interest at 
a rate that is indexed to one-month Term SOFR plus 2.00%. As of December 31, 2024, the revolving facility borrowings bear 
interest either at a rate indexed to one-month Adjusted Term SOFR plus 2.25% or the Alternative Base Rate plus 1.25%.
The revolving facility requires Select to maintain a leverage ratio, as specified in the credit agreement, not to exceed 7.00 
to 1.00. As of December 31, 2024, Select’s leverage ratio was 3.18 to 1.00. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12.  Long-Term Debt and Notes Payable (Continued)
F-27

Borrowings under the credit facilities are guaranteed by Holdings and substantially all of Select’s current domestic 
subsidiaries, other than certain non-guarantor subsidiaries, and will be guaranteed by substantially all of Select’s future 
domestic subsidiaries. Borrowings under the credit facilities are secured by substantially all of Select’s existing and future 
property and assets and by a pledge of Select’s capital stock, the capital stock of Select’s domestic subsidiaries, other than 
certain non-guarantor subsidiaries, and up to 65% of the capital stock of Select’s foreign subsidiaries held directly by Select or 
a domestic subsidiary.
Prepayment of Borrowings
Select will be required to prepay borrowings under the credit facilities with (i) the net cash proceeds received from non-
ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation, subject to reinvestment provisions 
and other customary carveouts and, to the extent required, the payment of certain indebtedness secured by liens having priority 
over the debt under the credit facilities or subject to a first lien intercreditor agreement, (ii) the net cash proceeds received from 
the issuance of debt obligations other than certain permitted debt obligations, and (iii) a percentage of excess cash flow (as 
defined in the credit agreement) based on Select’s leverage ratio, as specified in the credit agreement. 
During the year ended December 31, 2024, Select made a voluntary prepayment on its term loan and revolving credit 
facility as described above under Credit Facilities. 
Select 6.250% Senior Notes due 2032
On December 3, 2024, Select issued and sold $550.0 million aggregate principal amount of 6.250% senior notes due 
December 1, 2032. Select used the net proceeds of the 6.250% senior notes due 2032, together with the proceeds from the 
incremental term loan borrowings (as described above) and cash on hand, to redeem in full the $1,225.0 million senior notes 
due 2026 at a redemption price of 101.0%, and pay related fees and expenses associated with the financing. 
Interest on the 2032 senior notes accrues at the rate of 6.250% per annum and is payable semi-annually in arrears on June 
1 and December 1 of each year, beginning on June 1, 2025.
The senior notes are Select’s senior unsecured obligations which are subordinated to all of Select’s existing and future 
secured indebtedness, including its credit facilities. The senior notes rank equally in right of payment with all of Select’s other 
existing and future senior unsecured indebtedness and senior in right of payment to all of Select’s existing and future 
subordinated indebtedness. The senior notes are unconditionally guaranteed on a joint and several basis by each of Select’s 
direct or indirect existing and future domestic restricted subsidiaries, other than certain non-guarantor subsidiaries.
Select may redeem some or all of the notes prior to December 1, 2027 by paying a “make-whole” premium. Select may 
redeem some or all of he notes on or after December 1, 2027 at specified redemption prices. The prices which would be paid if 
redeemed during the twelve-month period beginning on December 1 of the years indicated below are as follows:
Year
Percentage
2027
 103.125 %
2028
 101.563 %
2029 and thereafter
 100.000 %
Select is obligated to offer to repurchase the senior notes at a price of 101% of their principal amount plus accrued and 
unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain 
qualifications and exceptions.
Loss on Early Retirement of Debt
During the year ended December 31, 2024, the Company repaid the term loan, refinanced the Select credit facilities and 
the senior notes which resulted in a loss on early retirement of debt of $28.8 million.
During the year ended December 31, 2023, the Company refinanced the Select credit facilities which resulted in a loss on 
early retirement of debt of $14.7 million.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12.  Long-Term Debt and Notes Payable (Continued)
F-28

13.  Redeemable Non-Controlling Interests
The Company’s redeemable non-controlling interests are comprised of common shares held by equity holders other than 
the Company in less than wholly owned subsidiaries. These shares are subject to redemption rights. 
The changes in redeemable non-controlling interests are as follows:
For the Year Ended December 31,
2022
2023
2024
(in thousands)
Balance as of January 1
$ 
39,033 
$ 
34,043 
$ 
26,297 
Net income attributable to redeemable non-controlling interests
 
7,572 
 
8,087 
 
9,402 
Distributions to and purchases of redeemable non-controlling interests
 
(5,443)  
(8,217)  
(9,725) 
Redemption value adjustment on redeemable non-controlling interests
 
(3,385)  
(1,527)  
1,947 
Purchase of membership interests of Concentra Group Holdings Parent
 
(5,876)  
(6,268)  
— 
Concentra Separation and Distribution
 
— 
 
— 
 
(17,754) 
Other
 
2,142 
 
179 
 
— 
Balance as of December 31
$ 
34,043 
$ 
26,297 
$ 
10,167 
14. Stock Repurchase Program
Holdings’ Board of Directors has authorized a common stock repurchase program to repurchase up to $1.0 billion worth 
of shares of its common stock. The program is in effect until December 31, 2025, unless extended or earlier terminated by the 
Board of Directors. Stock repurchases under this program may be made in the open market or through privately negotiated 
transactions, and at times and in such amounts as Holdings deems appropriate. Holdings is funding this program with cash on 
hand and borrowings under the revolving facility. The common stock repurchase program has available capacity of $399.7 
million as of December 31, 2024. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, which enacted a 
1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023. Holdings was not subject to this excise 
tax during the years ended December 31, 2023 and 2024.
The share repurchases and the cost associated with those repurchases are as follows:
For the Year Ended December 31,
2022
2023
2024
Shares repurchased
 
7,883,195  
—  
— 
Cost of shares repurchased (in thousands)
$ 
185,119 $ 
— $ 
— 
15.  Segment Information
The Company identifies its segments according to how the chief operating decision maker evaluates financial 
performance and allocates resources. The Company’s reportable segments consist of the critical illness recovery hospital 
segment, rehabilitation hospital segment, and outpatient rehabilitation segment. The accounting policies of the segments are the 
same as those described in the summary of significant accounting policies. Other activities include the Company’s corporate 
shared services, certain investments, and employee leasing services provided to related parties affiliated through the Company’s 
equity method investments. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-29

The Company’s chief operating decision maker is its Executive Chairman. The chief operating decision maker uses 
Adjusted EBITDA in the annual budgeting and forecasting process. The chief operating decision maker considers budget-to-
actual variances when making decisions about the allocation of operating and capital resources to each segment. The chief 
operating decision maker also uses segment Adjusted EBITDA to assess the performance of each segment by comparing the 
results of each segment to one another and to each segment’s budget. Adjusted EBITDA is defined as earnings from continuing 
operations excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock 
compensation expense, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries. The 
Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the 
understanding of the Company and provides useful information to the users of the consolidated financial statements.
The following tables summarize selected financial data for the Company’s reportable segments. 
 
For the Year Ended December 31, 2022
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
 
(in thousands)
Revenue
$ 
2,234,132 
$ 
916,763 
$ 
1,125,282 
$ 
333,002 
$ 
4,609,179 
Personnel expense
 
1,427,515 
 
530,159 
 
774,144 
Other segment items (1)
 
695,273 
 
188,570 
 
249,278 
Adjusted EBITDA
 
111,344 
 
198,034 
 
101,860 
Total assets
 
2,484,542 
 
1,200,767 
 
1,371,123 
 
327,214 
 
5,383,646 
Capital expenditures
 
79,524 
 
14,426 
 
40,677 
 
9,762 
 
144,389 
 
For the Year Ended December 31, 2023
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
 
(in thousands)
Revenue
$ 
2,299,773 
$ 
979,585 
$ 
1,188,914 
$ 
357,705 
$ 
4,825,977 
Personnel expense
 
1,326,448 
 
554,899 
 
825,907 
Other segment items (1)
 
727,310 
 
202,811 
 
251,139 
Adjusted EBITDA
 
246,015 
 
221,875 
 
111,868 
Total assets
 
2,496,886 
 
1,233,888 
 
1,380,447 
 
248,204 
 
5,359,425 
Capital expenditures
 
93,036 
 
21,922 
 
38,776 
 
6,126 
 
159,860 
 
For the Year Ended December 31, 2024
 
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospitals
Outpatient
Rehabilitation
Other
Total
 
(in thousands)
Revenue
$ 
2,444,196 
$ 
1,110,592 
$ 
1,250,294 
$ 
382,023 
$ 
5,187,105 
Personnel Expense
 
1,376,917 
 
629,149 
 
888,290 
Other segment items (1)
 
765,645 
 
235,695 
 
253,427 
Adjusted EBITDA
 
301,634 
 
245,748 
 
108,577 
Total assets
 
2,654,474 
 
1,366,922 
 
1,404,379 
 
182,176 
 
5,607,951 
Capital expenditures
 
65,861 
 
53,620 
 
36,142 
 
3,285 
 
158,908 
_______________________________________________________________________________
(1) 
Other segment items consist of facilities expense, other operating expenses, and other operating income.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15.  Segment Information (Continued)
F-30

A reconciliation of Adjusted EBITDA to income from continuing operations before income taxes is as follows:
 
For the Year Ended December 31,
 
2022
2023
2024
 
(in thousands)
Adjusted EBITDA - Critical Illness Recovery Hospital Segment
$ 
111,344 
$ 
246,015 
$ 
301,634 
Adjusted EBITDA - Rehabilitation Hospital Segment
 
198,034 
 
221,875 
 
245,748 
Adjusted EBITDA - Outpatient Rehabilitation Segment
 
101,860 
 
111,868 
 
108,577 
Other revenue
 
333,002 
 
357,705 
 
382,023 
Other cost of services (1) 
 
(333,002)  
(357,705)  
(382,023) 
Other general and administrative expenses (1)
 
(122,480)  
(134,153)  
(145,939) 
Other operating income
 
23,768 
 
486 
 
375 
Depreciation and amortization
 
(132,158)  
(135,691)  
(142,866) 
Stock compensation expense
 
(35,614)  
(43,158)  
(99,214) 
Loss on early retirement of debt
 
— 
 
(14,692)  
(28,845) 
Equity in earnings of unconsolidated subsidiaries
 
27,984 
 
41,339 
 
63,904 
Interest expense
 
(137,470)  
(154,165)  
(128,605) 
Income from continuing operations before income taxes
$ 
35,268 
$ 
139,724 
$ 
174,769 
_______________________________________________________________________________
(1) 
Exclusive of depreciation, amortization and stock compensation expense.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15.  Segment Information (Continued)
F-31

16. Revenue from Contracts with Customers
The following tables disaggregate the Company’s revenue: 
For the Year Ended December 31, 2022
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Patient service revenue:
Medicare
$ 
848,706 
$ 
423,739 
$ 
175,252 
$ 
— 
$ 
1,447,697 
Non-Medicare
 
1,376,269 
 
448,467 
 
878,979 
 
— 
 
2,703,715 
Total patient services revenue
 
2,224,975 
 
872,206 
 
1,054,231 
 
— 
 
4,151,412 
Other revenue
 
9,157 
 
44,557 
 
71,051 
 
333,002 
 
457,767 
Total revenue
$ 
2,234,132 
$ 
916,763 
$ 
1,125,282 
$ 
333,002 
$ 
4,609,179 
For the Year Ended December 31, 2023
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Patient service revenue:
Medicare
$ 
840,187 
$ 
462,476 
$ 
182,346 
$ 
— 
$ 
1,485,009 
Non-Medicare
 
1,455,772 
 
468,439 
 
931,124 
 
— 
 
2,855,335 
Total patient services revenue
 
2,295,959 
 
930,915 
 
1,113,470 
 
— 
 
4,340,344 
Other revenue
 
3,814 
 
48,670 
 
75,444 
 
357,705 
 
485,633 
Total revenue
$ 
2,299,773 
$ 
979,585 
$ 
1,188,914 
$ 
357,705 
$ 
4,825,977 
For the Year Ended December 31, 2024
Critical Illness 
Recovery Hospital
Rehabilitation 
Hospital
Outpatient
Rehabilitation
Other
Total
(in thousands)
Patient service revenue:
Medicare
$ 
798,439 
$ 
503,126 
$ 
190,271 
$ 
— 
$ 
1,491,836 
Non-Medicare
 
1,642,115 
 
556,640 
 
984,945 
 
— 
 
3,183,700 
Total patient services revenue
 
2,440,554 
 
1,059,766 
 
1,175,216 
 
— 
 
4,675,536 
Other revenue
 
3,642 
 
50,826 
 
75,078 
 
382,023 
 
511,569 
Total revenue
$ 
2,444,196 
$ 
1,110,592 
$ 
1,250,294 
$ 
382,023 
$ 
5,187,105 
17.  Stock-based Compensation
Holdings’ equity incentive plan provides for the issuance of various stock-based awards. Under its current plan, Holdings 
has issued restricted stock awards. The equity plan currently allows for the issuance of 5,995,000 awards, as adjusted for 
cancelled or forfeited awards through December 31, 2024. As of December 31, 2024, Holdings has capacity to issue 4,266,900 
stock-based awards under its equity plan. The equity plan allows for authorized but previously unissued shares or shares 
previously issued and outstanding and reacquired by Holdings to satisfy these awards.
The Company measures the compensation costs of stock-based compensation arrangements based on the grant-date fair 
value and recognizes the costs over the period during which employees are required to provide services. Restricted stock 
awards are valued using the closing market price of Holdings’ stock on the date of grant. The restricted stock awards generally 
vest over three to four years. Forfeitures are recognized as they occur.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-32

Transactions related to restricted stock awards are as follows:
 
Shares
Weighted Average
Grant Date 
Fair Value
 
(share amounts in thousands)
Unvested balance, January 1, 2024
 
4,511 
$ 
30.71 
Granted
 
1,728 
 
28.38 
Vested
 
(3,567)  
30.90 
Forfeited
 
(70)  
28.87 
Unvested balance, December 31, 2024
 
2,602 
$ 
28.94 
For the years ended December 31, 2022, 2023, and 2024, the weighted average grant date fair values of restricted stock 
awards granted were $28.41, $29.06, and $28.38, respectively. For the years ended December 31, 2022, 2023, and 2024, the fair 
values of restricted stock awards vested were $24.6 million, $33.9 million, and $110.2 million, respectively.
In connection with the Company’s spin-off of Concentra, employees of the Company holding any unvested restricted 
shares of the Company’s common stock on November 4, 2024 received accelerated vesting with respect to one-third of their 
unvested awards, applied ratably to each unvested tranche of such awards. This accelerated vesting was approved by the Human 
Capital and Compensation Committee of the Company in advance of the distribution as a part of the planning intended to 
ensure the tax-free nature of the distribution of Concentra common stock in respect of the Company’s vested stock. This had the 
effect of accelerating $23.6 million of stock compensation expense into the quarter ended December 31, 2024.
In connection with the distribution of Concentra common stock on November 25, 2024, holders of unvested restricted 
shares of the Company’s common stock received 0.806971 unrestricted and fully vested shares of Concentra common stock for 
each unvested restricted share of the Company’s common stock they held. The distribution of unrestricted Concentra shares is 
considered an award modification that did not result in incremental fair value and therefore, incremental compensation expense 
was not recognized. The unrecognized service cost attributed to the Concentra shares of the modified restricted stock award was 
recognized as stock compensation expense at the distribution date since the Concentra shares were distributed without 
restrictions. The distribution of vested Concentra shares to Select’s restricted stock holders had the effect of accelerating 
$22.3 million of stock compensation expense into the quarter ended December 31, 2024.
Stock compensation expense recognized by the Company is as follows:
 
For the Year Ended December 31,
 
2022
2023
2024
 
(in thousands)
Stock compensation expense:
 
 
 
Included in general and administrative
$ 
30,555 
$ 
36,041 
$ 
79,931 
Included in cost of services
 
5,059 
 
7,117 
 
19,283 
Total
$ 
35,614 
$ 
43,158 
$ 
99,214 
 Future stock compensation expense based on current stock-based awards is estimated to be as follows:
2025
2026
2027
2028
 
(in thousands)
Stock compensation expense
$ 
13,205 
$ 
8,240 
$ 
2,707 
$ 
411 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17.  Stock-based Compensation (Continued)
F-33

18.  Income Taxes
The components of the Company’s income tax expense for the years ended December 31, 2022, 2023, and 2024, are as 
follows:
 
For the Year Ended December 31,
 
2022
2023
2024
 
(in thousands)
Current income tax expense (benefit):
 
 
 
Federal
$ 
(7,022) $ 
24,766 
$ 
50,372 
State and local
 
7,584 
 
14,317 
 
25,280 
Total current income tax expense
 
562 
 
39,083 
 
75,652 
Deferred income tax expense (benefit)
 
16,161 
 
(9,830)  
(30,870) 
Total income tax expense
$ 
16,723 
$ 
29,253 
$ 
44,782 
Reconciliations of the statutory federal income tax rate to the effective income tax rate are as follows:
 
For the Year Ended December 31,
 
2022
2023
2024
Federal income tax at statutory rate
 21.0 %
 21.0 %
 21.0 %
State and local income taxes, less federal income tax benefit
 313.9 
 11.8 
 6.5 
Permanent differences
 74.1 
 1.8 
 1.7 
Deferred income taxes — state income tax rate adjustment
 227.3 
 (3.0) 
 0.0 
Deferred income taxes - covered employee adjustment
 — 
 — 
 0.9 
Valuation allowance
 216.7 
 (1.8) 
 1.5 
Limitation on officers’ compensation
 251.8 
 7.4 
 15.8 
Tax credits
 (135.5) 
 (2.7) 
 (1.6) 
Stock-based compensation
 (41.6) 
 (1.2) 
 (5.4) 
Non-controlling interest
 (899.9) 
 (12.2) 
 (15.0) 
Other
 19.6 
 (0.2) 
 0.2 
Effective income tax rate
 47.4 %
 20.9 %
 25.6 %
Our tax rate for the year ended December 31, 2022 was higher due to our lower income from continuing operations, the mix of 
states in which the income was earned, valuation allowances recorded as a result of an inability to recognize net operating 
losses in future periods and the effect of permanent tax differences. 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-34

The Company’s deferred tax assets and liabilities are as follows:
December 31,
 
2023
2024
 
(in thousands)
Deferred tax assets
 
 
Implicit discounts and adjustments
$ 
4,446 
$ 
6,169 
Compensation and benefit-related accruals
 
41,460 
 
44,651 
Professional malpractice liability insurance
 
13,835 
 
14,081 
Federal and state net operating loss and state tax credit carryforwards
 
25,476 
 
22,611 
Interest limitation carryforward
 
17,683 
 
47,905 
Stock awards
 
7,003 
 
2,314 
Equity investments
 
4,724 
 
1,235 
Operating lease liabilities
 
151,710 
 
174,165 
Research and experimental expenditures
 
13,349 
 
20,478 
Excess capital loss
 
— 
 
4,941 
Other
 
361 
 
384 
Deferred tax assets
 
280,047 
 
338,934 
Valuation allowance
 
(14,493)  
(15,230) 
Deferred tax assets, net of valuation allowance
 
265,554 
 
323,704 
Deferred tax liabilities
 
 
Investment in unconsolidated affiliates
$ 
(16,788) $ 
(20,228) 
Investment in consolidated affiliates
 
— 
 
(3,511) 
Depreciation and amortization
 
(190,153)  
(190,355) 
Deferred financing costs
 
(1,483)  
(494) 
Operating lease right-of-use assets
 
(141,030)  
(162,171) 
Derivatives
 
(14,151)  
— 
Other
 
(801)  
(1,378) 
Deferred tax liabilities
 
(364,406)  
(378,137) 
Deferred tax liabilities, net of deferred tax assets
$ 
(98,852) $ 
(54,433) 
The Company’s deferred tax assets and liabilities are included in the consolidated balance sheet captions as follows:
December 31,
 
2023
2024
 
(in thousands)
Other assets
$ 
21,090 
$ 
27,064 
Non-current deferred tax liability
 
(119,942)  
(81,497) 
$ 
(98,852) $ 
(54,433) 
As of December 31, 2023 and 2024, the Company’s valuation allowance is primarily attributable to the uncertainty 
regarding the realization of state net operating losses and other net deferred tax assets of loss entities.
For the year ended December 31, 2023, the Company recorded a net valuation allowance decrease of $2.4 million. These 
changes resulted from net changes in state net operating losses. For the year ended December 31, 2024, the Company recorded 
a net valuation allowance increase of $0.7 million. The changes in the Company’s valuation allowance were recognized as a 
result of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18.  Income Taxes (Continued)
F-35

At December 31, 2023 and 2024, the Company’s net deferred tax liabilities of approximately $98.9 million and $54.4 
million, respectively, consist of items which have been recognized for tax reporting purposes, but which will increase tax on 
returns to be filed in the future. The Company has performed an assessment of positive and negative evidence regarding the 
realization of the net deferred tax assets. This assessment included a review of legal entities with three years of cumulative 
losses, estimates of projected future taxable income, the effect on future taxable income resulting from the reversal of existing 
deferred tax liabilities in future periods, and the impact of tax planning strategies that management would and could implement 
in order to keep deferred tax assets from expiring unused. Although realization is not assured, based on the Company’s 
assessment, it has concluded that it is more likely than not that such assets, net of the determined valuation allowance, will be 
realized.
The total state net operating losses are approximately $518.1 million. State net operating loss carryforwards expire and are 
subject to valuation allowances as follows:
State Net Operating 
Losses
Gross Valuation 
Allowance
 
(in thousands)
2025
$ 
45,964 
$ 
45,276 
2026
 
24,622 
 
23,300 
2027
 
39,137 
 
38,102 
2028
 
45,246 
 
42,951 
Thereafter through 2042
 
363,092 
 
293,147 
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18.  Income Taxes (Continued)
F-36

19.  Earnings per Share
The following table sets forth the income attributable to the Company from continuing operations, net of tax, and the 
Company’s common shares outstanding, and its participating securities outstanding. There were no contractual dividends paid 
for the years ended December 31, 2022, 2023, and 2024.
Basic and Diluted EPS
For the Year Ended December 31,
2022
2023
2024
(in thousands)
Income from continuing operations, net of tax
$ 
18,545 
$ 
110,471 
$ 
129,987 
Less: net income attributable to non-controlling interests
 
33,516 
 
51,444 
 
64,514 
Income from continuing operations, net of tax, attributable to Select Medical’s common 
stockholders
 
(14,971)  
59,027 
 
65,473 
Less: distributed and undistributed net income attributable to participating securities
 
(528)  
2,127 
 
2,319 
Distributed and undistributed income from continuing operations, net of tax, 
attributable to common shares
$ 
(14,443) $ 
56,900 
$ 
63,154 
The following tables set forth the computation of EPS under the two-class method:
For the Year Ended December 31, 2022
Income from 
Continuing Operations, 
Net of Tax, Allocation
Shares(1)
Basic and Diluted EPS
(in thousands, except for per share amounts)
Common shares
$ 
(14,443)  
124,628 
$ 
(0.12) 
Participating securities
 
(528)  
4,557 
 
(0.12) 
Total Company
$ 
(14,971) 
For the Year Ended December 31, 2023
Income from 
Continuing Operations, 
Net of Tax, Allocation
Shares(1)
Basic and Diluted EPS
(in thousands, except for per share amounts)
Common shares
$ 
56,900 
 
123,105 
$ 
0.46 
Participating securities
 
2,127 
 
4,601 
 
0.46 
Total Company
$ 
59,027 
For the Year Ended December 31, 2024
Income from 
Continuing Operations, 
Net of Tax, Allocation
Shares(1)
Basic EPS
(in thousands, except for per share amounts)
Common shares
$ 
63,154 
 
124,614 
$ 
0.51 
Participating securities
 
2,319 
 
4,576 
$ 
0.51 
Total Company
$ 
65,473 
_______________________________________________________________________________
(1) 
Represents the weighted average share count outstanding during the period.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-37

20.  Commitments and Contingencies
Construction Commitments
At December 31, 2024, the Company had outstanding commitments under construction contracts related to new 
construction, improvements, and renovations totaling approximately $158.0 million.
Litigation
The Company is a party to various legal actions, proceedings, and claims (some of which are not insured), and regulatory 
and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the 
ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These 
matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. The Department 
of Justice, Centers for Medicare & Medicaid Services (“CMS”), or other federal and state enforcement and regulatory agencies 
may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the 
aggregate, have a material adverse effect on the Company’s business, financial position, results of operations, and liquidity.
To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability 
insurance and general liability insurance coverages through a number of different programs that are dependent upon such 
factors as the state where the Company is operating and whether the operations are wholly owned or are operated through a 
joint venture. For the Company’s wholly owned hospital and outpatient clinic operations, the Company currently maintains 
insurance coverages under a combination of policies with a total annual aggregate limit of up to $42.0 million for professional 
malpractice liability insurance and $45.0 million for general liability insurance. The Company’s insurance for the professional 
liability coverage is written on a “claims-made” basis, and its commercial general liability coverage is maintained on an 
“occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. For the Company’s joint venture 
operations, the Company has designed a separate insurance program that responds to the risks of specific joint ventures. Most 
of the Company’s joint ventures are insured under a master program with an annual aggregate limit of up to $80.0 million, 
subject to a sublimit aggregate ranging from $23.0 million to $33.0 million for most joint ventures. The policies are generally 
written on a “claims-made” basis. Each of these programs has either a deductible or self-insured retention limit. The Company 
also maintains additional types of liability insurance covering claims which, due to their nature or amount, are not covered by or 
not fully covered by the applicable professional malpractice and general liability insurance policies, including workers 
compensation, property and casualty, directors and officers, cyber liability insurance, and employment practices liability 
insurance coverages. Our insurance policies generally are silent with respect to punitive damages so coverage is available to the 
extent insurable under the law of any applicable jurisdiction, and are subject to various deductibles and policy limits. The 
Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-
insured retentions in future years. Significant legal actions, as well as the cost and possible lack of available insurance, could 
subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually 
or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows.
Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam 
lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides 
whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These 
lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring 
the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases 
from time to time in the future.
Oklahoma City Investigation.  On August 24, 2020, the Company and Select Specialty Hospital – Oklahoma City, Inc. 
(“SSH–Oklahoma City”) received civil investigative demands (“CIDs”) from the U.S. Attorney’s Office for the Western 
District of Oklahoma seeking responses to interrogatories and the production of various documents principally relating to the 
documentation, billing and reviews of medical services furnished to patients at SSH-Oklahoma City. The Company understands 
that the investigation arose from a qui tam lawsuit alleging billing fraud related to charges for respiratory therapy services at 
SSH–Oklahoma City and Select Specialty Hospital – Wichita, Inc. The Company has produced documents in response to the 
CIDs and is fully cooperating with this investigation. At this time, the Company is unable to predict the timing and outcome of 
this matter.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-38

Physical Therapy Billing.  On October 7, 2021, the Company received a letter from a Trial Attorney at the U.S. 
Department of Justice, Civil Division, Commercial Litigation Branch, Fraud Section (“DOJ”) stating that the DOJ, in 
conjunction with the U.S. Department of Health and Human Services (“HHS”), is investigating the Company in connection 
with potential violations of the False Claims Act, 31 U.S.C. § 3729, et seq. The letter specified that the investigation relates to 
the Company’s billing for physical therapy services, and indicated that the DOJ would be requesting certain records from the 
Company. In October and December 2021, the DOJ requested, and the Company furnished, records relating to six of the 
Company’s outpatient therapy clinics in Florida. In 2022 and 2023, the DOJ requested certain data relating to all of the 
Company’s outpatient therapy clinics nationwide, and sought information about the Company’s ability to produce additional 
data relating to the physical therapy services furnished by the Company’s outpatient therapy clinics and Concentra. The 
Company has produced data and other documents requested by the DOJ and is fully cooperating on this investigation. In May 
2024, by order of the U.S. District Court for the Middle District of Florida, a qui tam lawsuit that is related to the DOJ’s 
investigation was unsealed after the U.S. filed a notice declining to intervene in the case, but stating that its investigation is 
continuing and reserving its right to intervene at a later date. The lawsuit, filed in May 2021 and amended in October 2021 and 
July 2024, was brought by Kathleen Kane, a physical therapist formerly employed in the Company’s outpatient division, 
against Select Medical Corporation, Select Physical Therapy Holdings, Inc. and Select Employment Services, Inc. The 
amended complaint alleges that the defendants billed Federally funded health programs for one-on-one therapy services when 
group therapy was performed or overbilled for one-on-one therapy services, and billed for unreimbursable unskilled physical 
therapy services. In September 2024, the Company filed a motion to dismiss the amended complaint on multiple grounds. At 
this time, the Company is unable to predict the timing and outcome of this matter. 
21.  Subsequent Events
On February 13, 2025, the Company’s Board of Directors declared a cash dividend of $0.0625 per share. The dividend 
will be payable on or about March 13, 2025, to stockholders of record as of the close of business on March 3, 2025.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
20.  Commitments and Contingencies (Continued)
F-39

22.  Selected Quarterly Financial Data (Unaudited)
The tables below sets forth selected unaudited financial data for each quarter of the last two years.
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
 
(in thousands, except per share amounts)
For the year ended December 31, 2023
 
 
 
 
Revenue
$ 
1,208,682 
$ 
1,207,449 
$ 
1,191,730 
$ 
1,218,116 
Cost of services, exclusive of depreciation and amortization
 
1,056,091 
 
1,056,764 
 
1,067,452 
 
1,074,062 
Depreciation and amortization
 
34,115 
 
31,656 
 
34,435 
 
35,485 
Income from continuing operations before income taxes
 
47,845 
 
50,081 
 
6,929 
 
34,869 
Income from continuing operations, net of tax
 
36,657 
 
35,000 
 
8,563 
 
30,251 
Income from discontinued operations, net of tax
 
48,600 
 
56,860 
 
52,253 
 
31,547 
Net income
 
85,257 
 
91,860 
 
60,816 
 
61,798 
Net income attributable to Select Medical Holdings Corporation
 
70,805 
 
78,237 
 
48,180 
 
46,269 
Earnings (loss) from continuing operations per common share:
 
 
 
 
Basic and diluted
$ 
0.18 
$ 
0.18 
$ 
(0.02) $ 
0.12 
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
 
(in thousands, except per share amounts)
For the year ended December 31, 2024
 
 
 
 
Revenue
$ 
1,321,211 
$ 
1,281,748 
$ 
1,271,582 
$ 
1,312,564 
Cost of services, exclusive of depreciation and amortization
 
1,120,711 
 
1,121,943 
 
1,135,708 
 
1,175,099 
Depreciation and amortization
 
35,584 
 
36,069 
 
34,930 
 
36,283 
Income (loss) from continuing operations before income taxes
 
88,209 
 
55,853 
 
45,650 
 
(14,943) 
Income (loss) from continuing operations, net of tax
 
61,529 
 
37,638 
 
41,276 
 
(10,456) 
Income from discontinued operations, net of tax
 
55,638 
 
57,128 
 
39,739 
 
14,212 
Net income
 
117,167 
 
94,766 
 
81,015 
 
3,756 
Net income (loss) attributable to Select Medical Holdings Corporation
 
96,897 
 
77,563 
 
55,628 
 
(16,050) 
Earnings (loss) from continuing operations per common share:(1)
 
 
 
 
Basic
$ 
0.33 
$ 
0.17 
$ 
0.19 
$ 
(0.18) 
Diluted
$ 
0.33 
$ 
0.17 
$ 
0.19 
$ 
(0.19) 
_______________________________________________________________________________
(1)
Due to rounding, the summation of quarterly earnings per common share balances may not equal year to date 
equivalents.
Table of Contents
SELECT MEDICAL HOLDINGS CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
F-40

The following Financial Statement Schedule along with the report thereon of PricewaterhouseCoopers LLP dated 
February 20, 2025, should be read in conjunction with the consolidated financial statements. Financial Statement Schedules not 
included in this filing have been omitted because they are not applicable or the required information is shown in the 
consolidated financial statements or notes thereto.
Schedule II—Valuation and Qualifying Accounts
Balance at
Beginning
of Year
Charged to
Cost and
Expenses
Acquisitions(1)
Deductions(2)
Balance at
End of Year
 
(in thousands)
Income Tax Valuation Allowance
 
 
 
Year ended December 31, 2024
$ 
14,493 
$ 
737 
$ 
— 
$ 
— 
$ 
15,230 
Year ended December 31, 2023
$ 
16,858 
$ 
(2,365) $ 
— 
$ 
— 
$ 
14,493 
Year ended December 31, 2022
$ 
13,688 
$ 
3,170 
$ 
— 
$ 
— 
$ 
16,858 
_______________________________________________________________________________
(1)
Includes valuation allowance reserves resulting from business combinations. 
(2)
Valuation allowance deductions relate to the disposition of certain subsidiaries.
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F-41