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HOME CARE COMPANY SEVERS RELATIONSHIPS WITH SUBCONTRACTED STAFFING PROVIDERS IN ITS SOUTH FLORIDA MEDICARE OPERATIONS

 Decision Results in Downsizing of South Florida Medicare Operations
 FORT LAUDERDALE, Fla., Dec. 22 /PRNewswire/ -- Hospital Staffing Services, Inc. (NYSE: HSS) announced today that it was ending its subcontracting relationships with staffing providers in its South Florida Medicare operations and, as a result, downsizing Medicare home care operations in the area.
 The move will result in the loss of 87 employees in its Dade locations, 17 employees in Broward, and 5 in Monroe. Palm Beach County employees will not be affected. The company will continue to provide traditional home-care services and registered nurse staffing services from its South Florida offices.
 The remainder of its 70-plus locations around the country will be unaffected, including non-Medicare operations in South Florida.
 "We deeply regret the impact of this development on employees -- there's never a good time for something like this to happen," said Bruce Rubin, a spokesperson for the company.
 Patients Unaffected
 Patients who were served by subcontractors will continue to be cared for by Hospital Staffing Services personnel until the company completes arrangements to transfer care to other Medicare providers. The company said no patients would be left without services.
 Hospital Staffing Services is cooperating with a Federal investigation into Medicare billing practices in Dade County. Company officials had been considering a redirection of their South Florida home care business away from subcontracting staffing services. However, business circumstances that were not foreseeable arose as a result of a determination by the Health Care Financing Administration (HCFA) to suspend Medicare payments to the company's South Florida locations, and accelerated the company's decision in this manner.
 Company Predicts Others to Follow Its Lead
 This change in policy ends involvement with a common practice in the home care field in South Florida, in which subcontracted staffing providers are contracted by Medicare-certified providers for the provision of registered nurses, home health aides and therapists.
 The company predicted that other Medicare-certified providers would follow Hospital Staffing Services' lead to move away from this practice.
 The company is working to help employees who have lost their jobs to find others. Plans are underway to set up a recruitment day event at which representatives of other health care companies and employment agencies will be present to discuss job opportunities. Information on openings at other company locations throughout the country will also be made available.
 Revenue Decrease Offset By Lower Expenses
 Hospital Staffing Services does not anticipate a material impact on its net income arising from this downsizing and without giving consideration to any other factors.
 The company does anticipate a decrease in revenues from services of a minimum of $20 million. However, because Medicare is not-for-profit, the company expects an offsetting commensurate decline in operating expenses.
 For the first nine months ended Aug. 31, 1992, Hospital Staffing Services, Inc. reported net income of $1,956,994 on revenues of $93,459,055, as compared to net income of $1,798,097 and revenues of $63,751,454 for the same nine-month period in 1991.
 Hospital Staffing Services employs about 2,700 people at 72 locations across the U.S., and is a leading professional home health care services and recruitment organization. The company specializes in the provision of nursing services to patients at home and in health care institutions through a national network of home health care offices, and in the placement of medical personnel, on a temporary and interim basis, in hospitals and other health care facilities located throughout the United States, Canada, the United Kingdom and the Virgin Islands.
 -0- 12/22/92
 /CONTACT: Bruce Rubin of Bruce Rubin Associates, 305-448-7450, for Hospital Staffing Services, Inc./
 (HSS)


CO: Hospital Staffing Services, Inc. ST: Florida IN: HEA SU:

JJ-SS -- FL014 -- 9291 12/22/92 16:41 EST
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Publication:PR Newswire
Date:Dec 22, 1992
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