Via Facsimile and U.S. Mail
Mail Stop 03-09


May 10, 2005


Mr. Joel Kimbrough
Senior Vice President, Chief Financial Officer and Treasurer
Accredo Health Inc.
1640 Century Center Parkway, Suite 101
Memphis, TN 38134

Re:	Accredo Health Inc.
	Form 10-K for the fiscal year ended June 30, 2004
	File No. 000-25769

Dear Mr. Kimbrough:

      We have reviewed your response letter dated April 22, 2005
to
our comment letter dated April 13, 2005 and have the following
comments. Where our comments call for disclosure, we think you
should
amend your document in response to these comments.  In some of our
comments, we ask you to provide us with supplemental information
so
we may better understand your disclosure.  Please amend your Form
10-
K for the fiscal year ended June 30, 2004 and respond to these
comments within 15 business days or tell us when you will provide
us
with a response prior to the expiration of the 15-day period.  If
we
have requested additional information as well as an amendment or
if
you disagree with any comment that calls for disclosure, please
provide this letter prior to your amendment.  You may wish to
provide
us with marked copies of the amendment to expedite our review.
Your
letter should key your response to our comments.  Detailed letters
greatly facilitate our review.  Please file your letter on EDGAR
under the form type label CORRESP.  Please understand that we may
have additional comments after reviewing your amendment and
responses
to our comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.


Form 10-K for the year ended June 30, 2004, filed September 13,
2004

Item 7. Management`s Discussion and Analysis of Financial
Condition
of Results of Operations

Critical Accounting Policies and Estimates, page 36

1. We noted the disclosures proposed as a result of comment #1.
In
discussing how you arrived at the critical accounting estimate,
please describe how your consideration of any qualitative factors
are
quantified in arriving at the estimate.  In addition, as you did
not
appear to provide the quantitative disclosure that we had
requested,
please justify to us that it is not reasonably available and would
not provide material information for investors.  Otherwise, please
provide quantitative disclosure about the significant assumptions
underlying the estimate and the effect of reasonably likely
changes
in those assumptions.

2. We noted your response to comment #2 and the disclosures you
proposed as a result of that comment.  Please provide us and
consider
disclosing information addressing the following comments:

a. In your response to our comment #2a), you state that you have
not
historically had any significant change in estimates from
reporting
period to reporting period and do not anticipate any significant
changes in estimates in future periods.  However, you also state
that
you are unable to reconcile changes in prior estimates, as this
would
have to be performed on an individual claims basis.  If you are
unable to reconcile changes in prior estimates, it is unclear how
you
know that you have not had any significant changes in estimate.
As
such, please clarify this.

b. As of June 30, 2004, your allowances appear to represent
approximately 20% of your gross accounts receivable.  At the same
time, the amounts past due by over 90 days would appear to
represent
approximately 55% of your gross accounts receivable, with 36%
being
past due for over 180 days.  As of June 30, 2003, your allowances
appear to have only been approximately 29% of your gross accounts
receivable, while approximately 57% were over 90 days past due.
In
light of this, please clarify why your allowances are appropriate.

In so doing, please clarify your billing terms and the period over
which you receive payments.  If you regularly continue to receive
payments after an amount becomes over 180 days past due, please
consider disaggregating the amounts over 180 days past due.  This
disaggregation should try to illustrate the amounts that have been
past due longer than your collection patterns would have otherwise
suggested.

c. It appears that you rely on historical experience in estimating
your allowances.  Please clarify how you also consider the current
composition of your receivables (by payor group and aging
classification) in determining your estimate of the allowances.
Please tell us why you believe the use of historical experience is
reasonable in view of the current composition of your accounts
receivable.

d. It appears that your medical billing system does not "readily
provide" information about self-pay receivables.  Please clarify
what
you mean by "readily provide".  In addition, we noted that your
primary collection risks are for patient co-payments and
deductibles
and that your bad debt write-offs primarily result from
uncollectible
patient co-payments and deductibles.  As such, please clarify
whether
you consider information about self-pay receivables in estimating
your allowances.  If you do, please address why you have not
segregated self-pay balances on accounts where the primary payor
has
yet to make payment from the "commercial and other" payor group.

e. Please discuss the reasons why your actual days sales
outstanding
appear to have differed from your target.  In so doing, please
clarify whether the target was based on historical experience.  If
so, please address how your estimates considered these reasons for
the differences and the deviations from historical experience.

f. It appears that your accounts receivable subledger needs to be
reconciled to the amounts recorded in your financial statements
because of credit balances.  Please clarify whether these credit
balances represent collections that have not been applied to
specific
receivable balances.  In addition, please clarify how you have
allocated these credit balances in your aging disclosures and how
you
have considered them in estimating your allowances.

Asset Impairment, page 37

3. In the disclosures that you proposed in response to comment #1,
we
noted that you determine the fair value of the reporting unit
based
on comparable public company market analysis and a discounted cash
flow calculation.  As you only have one reporting unit and that
the
fair value of that one unit would presumably be the fair value of
the
company, it is unclear why your own market valuation would not
represent the fair value of the reporting unit.  As such, please
justify to us how your method for determining the fair value of
the
reporting unit is appropriate.  If you conclude that another
method
should have been used, please tell us whether the use of that
other
method would have required you to recognize an impairment loss.

Fiscal Year Ended June 30, 2004 Compared to Fiscal Year Ended June
30, 2003

Revenues, page 38

4. We noted the disclosures you proposed as a result of our
comment
#3.  Please separately quantify the increase in revenues due to
the
volume growth of several products and the increase due to product
pricing increases.  In addition, regarding the volume growth,
please
separately quantify the increase that resulted from the addition
of
new patients and the additional sales to existing patients.
Furthermore, please quantify the effect of the addition of new and
expanded contracts with managed care organizations.  Finally,
please
quantify the effect on revenue of the acquisitions that occurred
during the years discussed.

Notes to Consolidated Financial Statements

2. Significant Accounting Policies

Revenue Recognition, page F-9

5. In your response to comment #8, you asserted that:  (a) your
current billing system does not contain standard reporting
capabilities to report net revenues by payor class and (b) your
acquisitions have resulted in your use of separate systems that do
not have consistent reporting capabilities.  In this regard,
please
note that paragraph 39 of SFAS 131 would appear to relate to
revenue
recognized and does not appear to provide an impracticability
exception, as is provided by paragraph 37.  As such, please revise
your disclosures so that they are on a net basis, consistent with
the
amounts recognized on your income statement.

Otherwise, we noted your belief that you have provided information
about the extent of reliance of your major customers by disclosing
gross revenue, which you asserted to be a better indicator of
volume.
However, it would appear that you rely more on the amounts
realized
(presumably, net revenues) from your customers than from the
volume
sold to them, especially if reimbursement rates differ.  As such
and
in light of the lack of standard or consistent reporting
capabilities, please explain why you believe that the percentage
of
revenues from Medicare and Medicaid would not be materially
different
if reported on a net basis.  In so doing, please tell us whether
reimbursement rates from Medicare and Medicaid are materially
consistent with the reimbursement rates from commercial payors and
from prescription cards and how you know this.

3. Business Acquisitions, page F-12

6. Based on your response to our comment #9, we have the following
comments:

a. Please note that paragraph 37(e) of SFAS 141 states that
intangible assets meeting the criteria in paragraph 39 should be
recognized at estimated fair values.  In addition, please note
that
paragraph F1 defines fair value as the amount at which the asset
could be bought or sold in a current transaction between willing
parties.  Please tell us how you have complied with this guidance.

b. We noted that the amount allocated to the patient base was
based
on your historical per patient cost of identifying a patient and
bringing them on service.  As such, you apparently valued the
patient
base based on the amount of costs you avoided had you acquired the
same patients through other means, not based on the fair value of
the
patient base.  In this regard, please note that paragraph 6 of
EITF
02-17 states that assumptions, such as expectations of future
contract renewals and other benefits related to the intangible
asset,
that marketplace participants would consider must be considered in
the estimate of fair value.  In light of this and part (a) of this
comment, please tell us how the amount allocated represents fair
value.

c. We noted that you had existing payor and manufacturer
relationships in the therapies for which you expanded your market
penetration.  Apparently because you already had these
relationships,
it appears that you allocated no amounts to these relationships.
As
such, please tell us whether they met the criteria in paragraph 39
of
SFAS 141.  If they did, please tell us how you appear to have
determined that their fair value was zero.  In so doing, please
also
address your assertion that these acquisitions provided you with
additional volume that could be leveraged to maximize your
negotiating position with manufacturers and payors.

d. Based on your response, other than the one relationship with a
manufacturer of a PAH product acquired in the SPS transaction, it
appears that you did not acquire any payor or manufacturing
relationships that you did not already have.  Please specifically
confirm that this is correct.  Otherwise, please discuss these
other
relationships and tell us whether they met the criteria in
paragraph
39.  If they did, please tell us how you appear to have determined
that their fair value was zero.

e. We noted that the manufacturer relationship acquired in the SPS
transaction was non-exclusive, short-term in nature, and
cancelable
in the event of a change of control.  While these characteristics
may
have warranted consideration in estimating the fair value of the
relationship, it is not clear why amounts were not allocated to
the
relationship.  As such, please clarify how it did not meet the
criteria in paragraph 39.  If they did, please tell us how you
apparently determined their fair value to be zero.

f. We noted that you had stronger trade names than the ones you
acquired.  Apparently because of this, it appears that you
allocated
no amount to the trade names.  As such, please tell us whether
they
met the criteria in paragraph 39 of SFAS 141.  If they did, please
tell us how you appear to have determined that their fair value
was
zero.

g. Please confirm that you acquired no other intangible assets
(such
as service or supply contracts, customer lists or backlog) that
met
the criteria in paragraph 39.  In so doing, please fully consider
paragraphs A11 through A28.  If this is not true, please tell us
how
you appear to have determined that their fair value was zero.

h. Please clarify your use of "patient base" in your response and
in
your proposed disclosures, as it may be inferred to be comparable
with a "customer base".  Please note that, in paragraph B165, the
FASB noted that it views a "customer base" as a group of customers
that are not known or identifiable and concluded that it does not
meet the criteria for recognition apart from goodwill.


15. Contingencies, page F-23 - F-24

7. Based on the disclosure you proposed as a result of our comment
#10, it appears that no loss provision was accrued because you
believed that it was not reasonably possible that you would suffer
any "material out-of-pocket monetary loss".  Regarding "out-of-
pocket", it appears that your belief relies on insurance coverage
or
indemnification agreements.  In this regard, this reliance would
appear to be inappropriate, unless a right to offset the amounts
exists pursuant to FIN 39.  Regarding "monetary", paragraph 8 of
SFAS
5 would also appear to apply to non-monetary losses.  As such,
please
revise your proposed disclosures to clarify why an accrual of a
loss,
gross of insurance and indemnification, was not required by
paragraph
8 of SFAS 5.  In addition, please revise your proposed disclosures
to
give an estimate of the possible loss or range of possible loss
(both
before insurance and indemnification) or state that this estimate
cannot be made, per paragraph 10 of SFAS 5.


*    *    *    *


      You may contact Tabatha Akins, Staff Accountant, at (202)
824-
5547 or Oscar Young, Senior Accountant, at (202) 942-2902 if you
have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 942-1803.

								Sincerely,




								Jim B. Rosenberg
								Senior Assistant Chief
Accountant
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Mr. Joel R. Kimbrough
Accredo Health Inc.
Page 2