SecProbe.io

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<TYPE>CORRESP
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<FILENAME>filename1.txt
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                              Medicore, Inc.
                          2337 West 76th Street
                          Hialeah, Florida 33016
                         Telephone: (305) 558-4000
                         Telecopier: (305) 825-0961

Jim B. Rosenberg
Senior Assistant Chief Accountant
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 02549

     RE: Form 10-K for the fiscal year ended December 31, 2004
         Medicore, Inc. (06906)

     On June 3, 2004, Medicore, Inc.'s ("Medicore") subsidiary, Dialysis
Corporation of America ("DCA") filed a registration statement on Form S-4
(Registration No. 333-125515, "Registration Statement") with the Securities
and Exchange Commission ("Commission") relating to the merger whereby
Medicore will merge with and into DCA, the surviving company.  A Medicore
proxy statement and DCA information statement were included in the
aforementioned Registration Statement as well as financial statements for
each of DCA and Medicore and pro forma financial information.  Mr. Zafar
Hasan for Jeffrey Reidler, Assistant Director of the Division of Corporation
Finance ("Division") advised DCA on June 17, 2005, that the Commission was
not conducting a full review of the Form S-4, but will be monitoring for
resolution all issues in connection with a targeted accounting review of
DCA's and Medicore's annual reports on Form 10-K.  Mr. Hasan noted the
monitoring of the Registration Statement for the signature of DCA's Chief
Accounting Officer, which signature, we have been advised, will be included
in DCA's pre-effective amendment no.1 to the Registration Statement.

     On June 22, 2005, the Division provided comments requiring both DCA and
Medicore to provide information to better understand the disclosure provided
in each company's Form 10-K.

     Following are our responses chronologically presented and numbered in
accordance with each of the Division's comments.

Item 7.  Management's Discussion and Analysis of Financial Condition and ...
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page 40
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Critical Accounting Policies and Estimates, page 52
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1. Please provide to us the following about your accounting for revenue and
accounts receivable:

Response: DCA accounted for in excess of 98% of Medicore's 2004 sales
          revenues.  DCA's accounts receivable as of December 31, 2004,
          comprised all but $42,000 of accounts receivable.  In order to be
          consistent with the responses to the Division's comments on the DCA
          2004 Form 10-K, Medicore's responses to the Division's comments on
          the Medicore 2004 Form 10-K are being addressed from a DCA
          perspective in relation to accounts receivable and related items.

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     *    The steps you take in collecting accounts receivable, including
          patient co-payments;

Response: The initial billing for services rendered is generated and
          submitted monthly, no later than the 4th business day of the month
          following the month in which services were rendered. Upon receipt
          of payment from a primary payor, which typically ranges from 15 to
          60 days after initial billing, secondary bills are generated, and
          submitted to the secondary payor.  Upon receipt of payment from the
          secondary payor, which typically ranges from 15 to 60 days after
          submission of billing to such payor, a third bill may be required
          to an additional payor.

          Once a patients' insurer has been billed and it has paid its
          coverage, a bill will be generated to the patient for any remaining
          balance or co-payments.  The initial billing to a patient will
          occur at any of the stages delineated above, depending on
          applicable insurance coverage. Accounts are reviewed monthly.  If
          payments are not received, the patient will be contacted. An
          additional bill along with a collection letter will be sent to the
          patient.  Unless paid, this process will continue for two
          additional months with each communication being progressively
          stronger in content. Patient uncollectible accounts will be
          submitted to be written off no earlier that 120 days after the date
          of the first collection letter.

          All receivables are followed-up monthly to insure timely and
          accurate payments are received.

          On rare occasions, collection agencies are employed when patients
          are paid directly by insurers for DCA services and do not forward
          the funds to DCA.

     *    Your policy with respect to determining when a receivable is
          recorded as a bad debt and when a write off is recorded, including
          any thresholds (amount and age);

Response: Revenue is recognized and receivables recorded in the period
          services are rendered.

          DCA uses sound business judgment to establish that a receivable is
          uncollectible when claimed as worthless and that there is no
          likelihood of recovery at any time in the future.

          Based on the procedure delineated in the prior response, once it
          has been determined that all appropriate parties have been billed
          for all covered DCA services and DCA has exhausted and documented
          all collection efforts, DCA's collection department will submit
          those uncollectible receivables for final approval by the Director
          of Accounting and the V.P. of Finance.  Upon approval the
          uncollectible receivables will be written off.

     *    State whether your billing system generates contractual adjustments
          based on fee schedules for the patient's insurance plan for each
          patient encounter or if an estimate of contractual allowances is
          made; if an estimate is made, state what factors are considered in
          determining the estimate.

Response: DCA's billing system predominantly makes contractual adjustments
          based on fee schedules for the patient's insurance plan.  On
          limited occasions, a patient's insurance plan fee schedule cannot
          readily be determined.  In those instances, an estimate of the
          contractual rates is made.  These estimates are based on historical
          data using the fee schedule of patients with similar insurance
          plans.  Once the actual fee schedule for the

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          patient in question is obtained, any adjustments to original
          contractual rates are immediately made.

2. Please explain to us the following: (a) why your receivable balance at
December 31, 2004 increased substantially higher than your total sales for
2004 (b) why your allowance increased during 2004 and (c) why bad debt
expense decreased during 2003 as compared to 2002, and increased during 2004
as compared to 2003.

Response: (a)  In the first half of 2003, the State of Georgia's Medicaid
               program had implemented a new computer system and contractor
               that created billing and collection delays for all service
               providers in that state.  As a result, DCA experienced
               untimely collection in Georgia from mid-2003 until the end of
               2004.  This impacted DCA's six dialysis clinics located in
               Georgia. As of the second quarter, 2005, DCA has begun to
               receive the delayed Georgia Medicaid payments of 2003 and 2004
               claims, and there has been improved processing of current
               service claims by Georgia Medicaid.

               Additionally, development of new dialysis centers temporarily
               increases the aging of receivables.  It can take up to six
               months for a newly operating facility to experience the same
               receivable turnover as an existing operation.  DCA opened five
               new dialysis centers during fiscal 2004.

          (b)  The provision for doubtful accounts is determined under a
               variety of criteria, primarily the aging of the receivables,
               historical collection trends, and payor mix. This is generally
               a reflection of DCA's collection experience. Although
               management believed that the delays relating to the claims (as
               discussed in subparagraph (a) above) would be resolved and
               payments made (as currently is the case), it determined to
               take a conservative approach and include these receivables in
               the provision for doubtful accounts.  As a result, DCA added
               $413,000 to doubtful accounts due to the issues with Georgia
               Medicaid.

          (c)  Bad debt expense in 2003 reflected a Medicare bad debt
          recovery of $341,000 as compared to a $52,000 recovery during 2002.
          Medicare bad debt recovery amounts are determined based upon the
          cost reports generated annually for each of DCA's centers.  Before
          consideration of Medicare bad debt recoveries, the provision for
          doubtful accounts as a % of medical service revenue amounted to 3%
          for 2004, 2% for 2003, and 3% for 2002.

3. Please provide to us the following information about your accounts
receivable:

     *    For each period presented, tell us and quantify the amount of
          changes in estimates of prior contractual adjustments that you
          recorded during the current period.  For example, for 2004, this
          amount would represent the amount of the difference between
          estimates of contractual adjustments for services provided in 2003
          and the amount of the new estimates or settlement amount that was
          recorded during 2004.

Response: Contractual adjustments related to 2002 recorded in 2003 were
          approximately $59,000 (1.4% of December 31, 2002 accounts
          receivable), and contractual adjustments related to 2003 recorded
          in 2004 were approximately $508,000 (8.9% of December 31, 2003
          accounts receivable). Out of network providers represented the
          largest portion of estimate changes. Out of network providers do
          not generally provide fee schedules and

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          coinsurance information. Historical trends and data provide
          information on which to base contractual estimates.

     *    Explain and quantify the reasonably possible effects that a change
          in estimate of unsettled amounts from 3rd party payors as of the
          latest balance sheet date could have on financial position and
          operations.

Response: With more historical data and newly gained experience with
          additional centers in new markets, it is anticipated that a change
          in estimates would impact our accounts receivable no more than 5%.
          This would not significantly influence the financial position or
          operations of DCA.

     *    Disaggregate self-payors from the commercial insurers and private
          payors in your comparative tubular format for payor mix
          concentrations and include the related aging of accounts
          receivable.  The aging schedule may be based on management's own
          reporting criteria (i.e., unbilled, less than 30 days, 30 to 60
          days etc.) or some other reasonable presentation.  At a minimum,
          indicate the past due amounts and a breakdown by payor
          classification (i.e., Medicare, Medicaid, managed care and other,
          and self-pay).  We would expect self-pay to be separately
          classified from any other grouping.  If your billing system does
          not have the capacity to provide an aging schedule of your
          receivables, explain to us that fact and clarify how this affects
          your ability to estimate your allowance for bad debts.

Response: Accounts Receivable Table attached as Schedule A.

     *    If you have amounts that are pending approval from third party
          payors (i.e., Medicaid pending), please provide the balances of
          such amounts, where they have been classified in your aging
          buckets, and what payor classification they have been grouped with.
          If amounts are classified outside of self-pay, tell us why this
          classification is appropriate, and provide the historical
          percentage of amounts that get reclassified into self-pay.

Response: Currently, there are no approvals pending for third party payors.

     *    The days sales outstanding for each period presented.

Response: The days sales outstanding is for 70 and 58 for December 31, 2004
          and December 31, 2003, respectively.

Item 15(a)(1) and (2) - Financial Statements, page F-1
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Consolidated Statement of Operations, page F-5
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4. Please tell us why it is appropriate for you to include a gain on the sale
of a former subsidiary as part of your continuing operations in this
statement and your consolidated statements of cash flows, when (a) page F-26
apparently indicates that the sale was of your ownership in Techdyne, Inc.
and (b) page 39 apparently indicates that the sale had originally been
included as part of discontinued operations.

Response: This is a contingent gain related to the sale of Medicore's
          interest in a former subsidiary for which no items related to the
          discontinued operations had been reported in the two most recent
          calendar years and for which there were, therefore, no comparative

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          discontinued operation items reflected in Medicore's 2004
          consolidated statement of operations.  The gain was reported as a
          separately identifiable item in Medicore's 2004 consolidated
          statement of operations and disclosure was provided in the notes to
          the consolidated financial statements and elsewhere in the 2004
          Form 10-K concerning the nature of the gain.

          Medicore considers its presentation of the gain was appropriate
          considering that the gain was presented as a non-operating gain
          rather than being included as part of income from operations and
          detailed disclosure was provided as to its nature.

Consolidated Statements of Stockholders' Equity, page F-6
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5. Please tell us how you account for exercises of subsidiary stock options
and why it is appropriate for you to reduce equity for these exercises.  In
so doing, please cite the specific literature (by pronouncement and
paragraph) supporting this.

Response: Medicore owns a majority interest in DCA with the remainder of the
          ownership in DCA held by minority shareholders.  Medicore and
          minority interests represent relative ownership in the equity of
          DCA.  Exercise of DCA stock options increases the minority interest
          ownership % in DCA and decreases Medicore's ownership % in DCA.
          The amount by which Medicore's interest in the equity of DCA, its
          subsidiary, given up as a result of the decrease in its ownership %
          in DCA from subsidiary stock option exercises differs from
          Medicore's interest in proceeds from the options exercised and
          represents a change in Medicore's interest in the equity of DCA.
          This change is reflected as a corresponding change in Medicore's
          equity and in the minority interest in DCA presente