A marketing battle is taking place in Montgomery County over an unlikely market -- the terminally ill.

The Montgomery County Hospice Society and Holy Cross Hospital are the reluctant in the dispute over whether the county needs more services for patients with terminal illnesses.

Holy Cross Hospital of Silver Spring has offered home care to such persons since 1967. The Montgomery Hospice Society, formed in 1979, has applied for cerfitication to send volunteers and nurses to the homes for cancer patients who wish to die at home.

Staff members of the Health Systems Agency, Montgomery's medical policy-making body, has recommended against the certification on the groups that the Health Systems Plan calls for only one hospice program, that the Montgomery Hospice Society has contributions of less than $25,000 and the Holy Cross is already giving hospice-type care in the county.

"Certainly there are enough people dying in Montgomery County who need the special cares of hospice," said Josefina B. Magno, executive director of The National Hospice Organization.

"We feel it has been put on our heads to prove Holy Cross is not giving hospice care, and I resent having been put in that position," said Sally Ketchum, administrative director of the Montgomery Hospice Society. She said the nonprofit society was confident of being able to raise enough money to cover its projected $200,000 annual budget once service was started.

"We're not trying to be obstructionist," said Sister Particia Vanenberg of Holy Cross. "There is more than enough care to be given in the metropolitan area . . . We have nothing to fear from another provider entering the market."

Hospice, a medieval term for a place of comfort and hospitality to travelers, has been used in England for about 15 years to mean special care for dying persons and their families. About 10 years ago the first hospice opened in the United States, and today there are more than 200 hospice groups.

Area hospice include The Washington Home, which opened a six-bed, in-patient unit in the District two years ago, and the Hospice of Northern Virginia's home care program, which contracts with the Visiting Nurses Association (VNA). Prince George's and Montgomery counties hope to have the next additions to local hospice care.

Hospice can mean a free-standing facility, such as the Washington Home, or a coordinating agency, such as the Northern Virginia Hospice. It can be a home care program dependent on volunteers, in-patient care at a hospital or nursing home, or a service contracted through groups such as the Visiting Nurses Association.

The Prince George's County Health Department is planning a joint hospice care program with the county hospital and the VNA. The Montgomery Hospice Society has 30 trained volunteers, including a nucleus of nurse, physicians, and social workers ready to begin care for about 80 persons in the county who have requested their services.

Local hospitals have said they would consider offering in-patient facilities to the society once it has received a Certificate of Need from the Health Systems Agency.

The Agency decided this month, however, to defer that certification for 90 days while it gathers more information on the need for the additional hospice care in Montgomery.

"The major difficulty was that the Hospice Society did not have a financially feasible proposal as it was presented," said R. K. Zielinski, director of the Department of Health Systems Planning. She said the department will look at letters committing money to the society and will set up a task force to look at the kinds of care being given in the county and the need for hospice.