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RESPONSE LETTER

Via EDGAR and FedEx

September 30, 2005

Mr. Jim B. Rosenberg

United States Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Mail Stop 6010

    Re:

    BioScrip, Inc. (f/k/a MIM Corporation)

Form 10-K for Fiscal Year Ended December 31, 2004

Filed March 4, 2005

File No. 000-28740

Dear Mr. Rosenberg,

     On behalf of BioScrip, Inc. (the “Company”), we are responding to the Staff’s comments
contained in the Staff’s letter of September 16, 2005. Set forth below are the Staff’s comments
from its September 16, 2005 letter, as well as the Company’s responses to the comments. This letter
is being submitted via EDGAR electronic submission; as well, we are also providing you with a
courtesy copy via FedEx for Monday, October 3rd delivery.

Item 7. Management’s Discussion and Analysis of Financial Condition and ...., page 16

Critical Accounting Policies, page 17

Allowance for Contractual Discounts, page 18

    1.

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

    The Company does not specifically track the settlement of, or changes in estimates of prior
period contractual discount balances. In establishing contractual discount estimates, the
Company has historically (including during the years ended 2002, 2003 and 2004), analyzed
its agings, payor mix and actual writeoff experience on a quarterly basis to determine the
adequacy of its allowance for contractual discounts. It has then made periodic adjustments
as necessary. BioScrip has recorded its revenue net of contractual discounts. We believe
that there have been no subsequent material changes in our prior period estimates for the
years ended 2002, 2003 and 2004.

Mr. Jim B. Rosenberg

September 30, 2005

Page
2 of 5

We have provided below the allowance for contractual discounts balances from December 31, 2002
through December 31, 2004. These balances reflect the net effect of the reserve additions and
actual writeoffs during each of the periods presented. It is important to note that contractual
discounts arise primarily from our Specialty Management and Delivery Services (Specialty) segment,
where we bill third party payors typically at the lesser of either a contractual rate or an
established “usual and customary” rate. The increase in the December 31, 2003 balance reflects
primarily a reduction in expected reimbursement from two third party payors in our Specialty
segment as well as a 14% increase in 2003 Specialty revenue.

    Balance

    Balance

    Balance

    12/31/2002

    12/31/2003

    12/31/2004

    Allowance for Contractual Discounts

    $
    3,144

    $
    4,598

    $
    4,957

Item 8. Financial Statements and Supplementary Data, page 26

Notes to Consolidated Financial Statement, page 31

Note 2 – Summary of Significant Accounting Policies, page 31

    2.

    Please tell us what claims payable represent and how you account for them.

    Claims payable represents the dollar value of prescriptions processed/adjudicated in our PBM
business that are to be reimbursed to our participating network pharmacies as of a
particular date. By way of background, the Company is responsible for all covered
prescriptions provided to PBM plan members processed through its network pharmacies during
the contract period. Claims are adjudicated through the Company’s on-line adjudication
system. These claims become a liability to the Company at the point of adjudication, that
is, when we have agreed that the prescription claim is valid, correctly priced, and due to
the network pharmacy for a participating PBM plan member. These claims are paid to the
individual pharmacies on a weekly basis.

    Going forward, on behalf of BioScrip, please be advised that the Company will add claims
payable disclosure consistent with the above response to the extent material.

Note 4 – Acquisitions, page 36

    3.

    For the Fair Pharmacy and Chronimed acquisitions, please give us a description of the
factors that contributed to a purchase price that resulted in the recognition of goodwill,
as this should have been disclosed per paragraph 51(b) of SFAS 141.

    Chronimed

    On August 9, 2004 we entered into a Merger Agreement with Chronimed, pursuant to which MIM
acquired Chronimed in a stock-for-stock transaction as indicated in Note 4, page 26 of

Mr. Jim B. Rosenberg

September 30, 2005

Page
3 of 5

    our
10-K for the period ended December 31, 2004 (the “10-K”). The purchase price paid for
Chronimed resulted in value over and above the net asset value of the business including
both tangible assets and separately identifiable intangible assets. Goodwill, as described
in SFAS 141, Paragraph 43 as “the excess of the cost of an acquired entity over the net of
the amounts assigned to assets acquired and liabilities assumed,” was recognized and
consistent with the rationale for the acquisition as follows:

    •

    The opportunity to combine the companies’ individual strengths in payor
contracting, physician sales, manufacturer services, clinical management and
fulfillment;

    •

    The opportunity to sell our products through Chronimed’s existing retail
pharmacies;

    •

    The opportunity to broaden our suite of disease states and customer base;

    •

    The expansion of our retail pharmacy coverage;

    •

    The opportunity to create significant mail-order synergies through the
combination of this business segment; and

    •

    The opportunity to leverage a variety of cost and operational synergies, which
will enable the combined entity to grow and improve margins.

    The factors mentioned above support the payment of an amount in excess of fair value of the
assets acquired. After allocating value to separately identifiable intangible assets, we
believed that the residual value (i.e., goodwill) was attributable to the non-separable,
non-contractual strategic benefits mentioned above.

    Fair Pharmacy

    On February 2, 2004 the Company acquired all of the issued and outstanding stock of Natural
Living, Inc., d/b/a/ Fair Pharmacy (“Fair Pharmacy”) for $15.0 million in cash, plus a
performance-based earn-out of $4.0 million. The purchase price paid for Fair Pharmacy
resulted in value in excess of the net asset value of the business including both tangible
assets and separately identifiable intangible assets. Goodwill, described in SFAS 141,
Paragraph 43 as “the excess of the cost of an acquired entity over the net of the amounts
assigned to assets acquired and liabilities assumed,” was recognized based upon the
rationale for the acquisition as follows:

    •

    Desire to expand our business in the New York area, which would enable us to
better serve the hospital population and have a more diverse area for distribution;

    •

    Improve our competitive position in this area supported by our intent to retain
the former owner and key pharmacist;

    •

    Provide the ability to distribute additional products through Fair Pharmacy’s
location;

    •

    Increase growth expectations for the business; and

    •

    Further develop and implement Fair Pharmacy’s community platform, which
included a delivery system that enabled
home-bound patients to receive their medication, across our legacy business.

    The factors mentioned above support the payment of an amount in excess of the fair value of
the assets acquired. After allocating value to separately identifiable intangible assets, we

Mr. Jim B. Rosenberg

September 30, 2005

Page
4 of 5

    believe the residual value (i.e., goodwill) is well supportable by the strategic points
mentioned above.

    In particular, please tell us why no amounts were allocated to any customer relationships
acquired from Fair Pharmacy and how that was consistent with SFAS 141 and EITF 02-17.

    SFAS 141 requires an issuer to recognize customer relationships separate and apart from
goodwill only if “. . . it is separable, that is, if it is capable of being separated or
divided from the acquired entity and sold, transferred, licensed, rented or exchanged. . . .” For purposes of SFAS 141’s statement contained in paragraph 39, even if that asset
cannot be exchanged, sold, transferred or exchanged individually, it may still be deemed
“separable” if it can be sold, transferred, rented, licensed or exchanged in combination
with a related contract, asset or liability.”

    As part of our application of SFAS 141 and consistent therewith, we examined all potential
intangible assets that met the criteria to be recognized apart from goodwill based on
Appendix D of SFAS 141. Management utilized an outside valuation firm to assist us in our
examination. Based on our examination of the assets of the business, we determined that the
trademark / trade name and the non-compete agreement with the former owner and pharmacist in
charge were the key intangible assets acquired. Fair Pharmacy had long-standing presence
and was a well known and respected brand in the neighborhood community in which it operates.
That brand was supported by a proven track record of personalized customer service, home
delivery of medication, quality, and reliability. Additionally, the former owner of Fair
Pharmacy and pharmacist in charge was instrumental in developing that brand and establishing
and growing the business over its history. We believed that that individual could cause
material damage to the business, but for a non-compete agreement.

    As part of management’s assessment, we also looked at our customer relationships as a
potential intangible asset, as contemplated by SFAS 141 paragraph 39 and EITF 02-17.
Approximately two-thirds of Fair Pharmacy patients were indigent, relying on Medicaid
insurance coverage. Medicaid patients tend to move frequently from pharmacy to pharmacy as a
function of the highly transient nature of such patients, creating a high turnover customer
base. Also, Fair Pharmacy served the broad needs of the community, ranging from general
over-the-counter products to higher-priced specialty prescriptions. With a disparate
customer base of a non-recurring nature, we did not assign value to any specific customer
type or disease grouping that would amount to an intangible asset of material value. As
well, there are no contracts or continuing obligations between end-user customers and Fair
Pharmacy, nor is there an ability to sell, transfer or license these customer relationships
separately or in combination with a related contact, asset or liability. Consequently, we
concluded that our customer relationships did not constitute a material separable or
contractual intangible asset.

    Management also assessed the value of Fair Phramacy’s physician relationships in the
community. The physicians were and continue to be a significant referral source for Fair
Pharmacy based on its reputation as a quality pharmacy provider. However, management did
not assign specific intangible asset value to the physician relationships because we did not
have contractual relationships with them and could not separate them from the business.

Mr. Jim B. Rosenberg

September 30, 2005

Page
5 of 5

    As indicated in our response to the prior question, we purchased this business to establish
a distribution platform in this community, strengthen our competitive position, expand our
product offerings, and to leverage Fair Pharmacy’s unique business model into our other
national legacy pharmacies. Upon determining that these non-separable, non-contractual
assets were most critical to the value of the Company, we separately recognized the
trademark / trade name and the value of the non-compete in accordance with SFAS 141. Beyond
the value of the key non-separable, non-contractual assets, and the trademark / trade name
and non-compete agreement, we do not believe there to be material value to customer
relationships between the customers and the business entity.

As you requested, on behalf of the Company, I acknowledge to you as follows:

    •

    the Company is responsible for the adequacy and accuracy of the disclosure in the
filings;

    •

    staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

    •

    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 questions or comments, please do not hesitate to contact me at (952) 979-3852.

Sincerely,

/s/  Gregory H. Keane

Gregory H. Keane

Chief Financial Officer

BioScrip, Inc.