SEC Company Response from NATIONAL HOME HEALTH CARE CORP (CIK 0000728389) — Jul 18, 2005
NATIONAL HOME HEALTH CARE CORP (CIK 0000728389)
Date: July 18, 2005 · CIK: 0000728389 · Accession: 0000910680-05-000481
AI Filing Summary & Sentiment
File numbers found in text: 000-12927
Referenced dates: June 20, 2005
Letter
July 18, 2005 Mr. Jim B. Rosenberg Senior Assistant Chief Accountant Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549
Re: National Home Health Care Corp. (the "Company") Form 10-K for the fiscal year ended July 31, 2004 File No. 000-12927
Dear Mr. Rosenberg:
The following is in response to your letter dated June 20, 2005:
1. Critical Accounting Policies, page 21
a. For each period presented, there were no material changes in estimates of prior period contractual adjustments that were recorded during the current period. As discussed under Critical Accounting Policies on page F-8 of the Form 10-K, the Company has not had any material adjustments to previously recorded revenue amounts.
b. Enclosed in a tabular format is the payor mix concentrations and related aging of accounts receivable at July 31, 2004.
c. There are no amounts included in accounts receivable that are pending approval from third party payors.
d. Medicare and Medicaid accounts receivable typically do not result in bad debt write-offs. Both of these payors pay in the shortest time period, typically 8-45 days. Any outstanding receivable over 45 days for either Medicare or Medicaid usually requires only a resubmission of the claim to receive full payment. A large part of the Company's business is its subcontracting with other Medicare certified agencies, many of which are part of hospital systems. Although subcontracts make up the largest balance of the Company's accounts receivable, as contract terms typically are 120 days, these receivable are all generally collectible and are monitored closely by the Company. Bad debts would arise from these subcontracts only if these agencies would become financially impaired. The Company's greatest exposure to uncollectible accounts is from its self-pay and managed care accounts. In order to limit exposure on self-pay accounts, the Company generally requires a deposit prior to commencing services on self-pay patients.
<PAGE>
The Company continuosly reviews its accounts receivable aging reports. When certain accounts become outstanding beyond their payment terms, calls are made to these accounts and further credit by the Company may be limited until payments are made to catch-up. The Company evaluates its accounts receivable monthly, and on a quarterly basis, it analyzes its allowance for possible losses to ensure that the Company has adequate reserves for any potential uncollectible accounts. If the allowance for possible losses related to its accounts receivable is understated, the Company records an allowances for possible losses on its Consolidated Statement of Earnings. The Company does not have any particular threshold for account receivable write-offs. When the Company has determined that an account is not collectible, it is written off against the allowance for possible losses. Typically, accounts receivable other than subcontracting accounts are written off if they are older than one year.
e. The Company historically has not had problems collecting its accounts receivable. The Company has recorded an allowance for possible losses of $1,707,000 over the past three years on consolidated revenues of $273,999,000, which represents a charge to earnings of less than 1% of consolidated revenues. Over the same time period, the Company has written-off $1,450,000 of accounts receivable. The Company does not believe that the information contained herein (including the table submitted in response to question 1 b.) is material to investors or that it should be disclosed in our filings.
2. The Company is reimbursed by Medicare based on episodes of care that cover a 60 day period. Revenue is recorded over the 60 day period. Upon receipt of the 60 day episodic payment on the first day of such period, the Company records deferred revenue, representing unearned revenue. The Company records revenue and offsets deferred revenue evenly over the ensuing 60 day period.
The Company acknowledges that the Company is responsible for the adequacy and accuracy of the disclosure in its filings with the Commission; that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking action with respect to the filing; and that the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you have any further questions or comments, please feel free to call our attorney, Michael J. Shef at Troutman Sanders LLP at 212-704-6140.
Sincerely yours,
Robert P. Heller
Chief Financial Officer
Show Raw Text
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July 18, 2005
Mr. Jim B. Rosenberg
Senior Assistant Chief Accountant
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: National Home Health Care Corp. (the "Company")
Form 10-K for the fiscal year ended July 31, 2004
File No. 000-12927
Dear Mr. Rosenberg:
The following is in response to your letter dated June 20, 2005:
1. Critical Accounting Policies, page 21
a. For each period presented, there were no material changes in estimates
of prior period contractual adjustments that were recorded during the current
period. As discussed under Critical Accounting Policies on page F-8 of the Form
10-K, the Company has not had any material adjustments to previously recorded
revenue amounts.
b. Enclosed in a tabular format is the payor mix concentrations and related
aging of accounts receivable at July 31, 2004.
c. There are no amounts included in accounts receivable that are pending
approval from third party payors.
d. Medicare and Medicaid accounts receivable typically do not result in bad
debt write-offs. Both of these payors pay in the shortest time period, typically
8-45 days. Any outstanding receivable over 45 days for either Medicare or
Medicaid usually requires only a resubmission of the claim to receive full
payment. A large part of the Company's business is its subcontracting with other
Medicare certified agencies, many of which are part of hospital systems.
Although subcontracts make up the largest balance of the Company's accounts
receivable, as contract terms typically are 120 days, these receivable are all
generally collectible and are monitored closely by the Company. Bad debts would
arise from these subcontracts only if these agencies would become financially
impaired. The Company's greatest exposure to uncollectible accounts is from its
self-pay and managed care accounts. In order to limit exposure on self-pay
accounts, the Company generally requires a deposit prior to commencing services
on self-pay patients.
<PAGE>
The Company continuosly reviews its accounts receivable aging reports.
When certain accounts become outstanding beyond their payment terms, calls are
made to these accounts and further credit by the Company may be limited until
payments are made to catch-up. The Company evaluates its accounts receivable
monthly, and on a quarterly basis, it analyzes its allowance for possible losses
to ensure that the Company has adequate reserves for any potential uncollectible
accounts. If the allowance for possible losses related to its accounts
receivable is understated, the Company records an allowances for possible losses
on its Consolidated Statement of Earnings. The Company does not have any
particular threshold for account receivable write-offs. When the Company has
determined that an account is not collectible, it is written off against the
allowance for possible losses. Typically, accounts receivable other than
subcontracting accounts are written off if they are older than one year.
e. The Company historically has not had problems collecting its accounts
receivable. The Company has recorded an allowance for possible losses of
$1,707,000 over the past three years on consolidated revenues of $273,999,000,
which represents a charge to earnings of less than 1% of consolidated revenues.
Over the same time period, the Company has written-off $1,450,000 of accounts
receivable. The Company does not believe that the information contained herein
(including the table submitted in response to question 1 b.) is material to
investors or that it should be disclosed in our filings.
2. The Company is reimbursed by Medicare based on episodes of care that cover a
60 day period. Revenue is recorded over the 60 day period. Upon receipt of the
60 day episodic payment on the first day of such period, the Company records
deferred revenue, representing unearned revenue. The Company records revenue and
offsets deferred revenue evenly over the ensuing 60 day period.
The Company acknowledges that the Company is responsible for the adequacy
and accuracy of the disclosure in its filings with the Commission; that staff
comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking action with respect to the filing; and that the
Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
If you have any further questions or comments, please feel free to call our
attorney, Michael J. Shef at Troutman Sanders LLP at 212-704-6140.
Sincerely yours,
Robert P. Heller
Chief Financial Officer
<PAGE>
NATIONAL HOME HEALTH CARE CORP.
ACCOUNTS RECEIVABLE CONCENTRATION/AGING
JULY 31, 2004
<TABLE>
<CAPTION>
OVER
TOTAL UNBILLED 0-30 31-60 61-90 90
<S> <C> <C> <C> <C> <C> <C>
MEDICARE $ 870,000 $ 0 $ 229,000 $ 213,000 $ 197,000 $ 231,000
MEDICAID 3,264,000 0 2,369,000 349,000 112,000 434,000
SUB-CONTRACT 12,314,000 0 3,681,000 2,001,000 2,015,000 4,617,000
SELF-PAY 409,000 0 207,000 80,000 43,000 79,000
MANAGED CARE 930,000 0 261,000 285,000 130,000 254,000
UNBILLED 1,419,000 1,419,000 0 0 0 0
TOTALS $19,206,000 $1,419,000 $6,747,000 $2,928,000 $2,497,000 $5,615,000
</TABLE>
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