SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                            ------------------------

                                    FORM 8-K


                            ------------------------


                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported)           December 31, 1997
                                                 ---------------------------


                        INTEGRATED HEALTH SERVICES, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


         Delaware                   1-12306                23-2428312
----------------------------      -----------           -----------------
(State or Other Jurisdiction      (Commission             (IRS Employer
     of Incorporation)            File Number)          Identification No.)



 10065 Red Run Boulevard, Owings Mills, Maryland                     21117
--------------------------------------------------                 ----------
(Address of Principal Executive Offices)                           (Zip Code)



Registrant's telephone number, including area code:       (410) 998-8400
                                                   -----------------------------


                                 Not Applicable
--------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)



<PAGE>



ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

          On  December  31,  1997,  Integrated  Health  Services,  Inc.  ("IHS")
acquired  from  HEALTHSOUTH  Corporation  ("HEALTHSOUTH")  139 owned,  leased or
managed long-term care facilities,  12 specialty  hospitals,  a contract therapy
business  having over 1,000  contracts and an  institutional  pharmacy  business
serving  approximately  38,000 beds. The businesses  acquired,  which had annual
revenues of approximately  $925 million for the 12 months ended August 31, 1997,
were acquired by HEALTHSOUTH in its recent acquisition of Horizon/CMS Healthcare
Corporation.

         Under the terms of the acquisition agreement, IHS paid $1.15 billion in
cash and assumed  approximately  $100  million in debt.  IHS funded the purchase
price with  available  cash from term loan  borrowings  under its $2.15  billion
revolving  credit  and term  loan  facility  and the  sale of its 9 1/4%  Senior
Subordinated Notes due 2008 and borrowings under the revolving credit portion of
the new  credit  facility.  On a pro  forma  basis  after  giving  effect to the
acquisition of these  business from  HEALTHSOUTH  and the  acquisition of RoTech
Medical Corporation and the lithotripsy division of Coram Healthcare Corporation
in October  1997,  IHS' total debt,  including  current  portion,  accounted for
approximately  74% of its total pro forma  capitalization  as of  September  30,
1997. The transaction will be treated as a purchase for accounting and financial
reporting purposes.

          Donaldson Lufkin & Jenrette Securities  Corporation and Morgan Stanley
Dean  Witter  Discover  &  Co.  acted  as  financial  advisors  to  IHS  in  the
transaction.


ITEM 5.  OTHER EVENTS

         In connection with the  acquisition of the businesses from  HEALTHSOUTH
described in Item 2 above IHS and the lenders  under IHS'  revolving  credit and
term loan  facility  (the  "Credit  Facility")  amended  the Credit  Facility to
provide for an additional $400 million term loan facility (the  "Additional Term
Facility") to finance a portion of the purchase price for the acquisition and to
amend  certain  covenants to permit the  consummation  of the  acquisition.  The
Additional Term Facility,  which was borrowed at the closing of the acquisition,
will mature on December 31, 2005, and will be amortized  beginning  December 31,
1998 as follows:  1998 -- $4 million; each of 1999, 2000, 2001, 2002 and 2003 --
$4 million  (payable  in equal  quarterly  installments);  2004 -- $176  million
(payable in equal quarterly installments);  and 2005 -- $200 million (payable in
equal quarterly installments).  The Additional Term Facility bears interest at a
rate equal to, at the option of IHS, either (i) in the case of Eurodollar loans,
the  sum of  (x)  two  and  one-quarter  percent  or two  and  one-half  percent
(depending  on the ratio of IHS' Debt (as  defined  in the Credit  Facility)  to
earnings before interest, taxes, depreciation,  amortization and rent, pro forma
for  any  acquisitions  or  divestitures  during  the  measurement  period  (the
"Debt/EBITDAR  Ratio")) and (y) the interest rate in the London interbank market
for loans in an amount  substantially  equal to the amount of borrowing  and for
the period of borrowing selected by IHS or (ii) the sum

                                      -2-

<PAGE>


of (a) the higher of (1) Citibank,  N.A.'s base rate or (2) one percent plus the
latest overnight  federal funds rate plus (b) a margin of one percent or one and
one-quarter  percent (depending on the Debt/EBITDAR  Ratio). The Additional Term
Facility can be prepaid at any time in whole or in part without penalty.


ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

         (a)      FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

                  It is impracticable for IHS to provide the required  financial
                  statements on the date this report is being filed. IHS intends
                  to file the required financial  statements under cover of Form
                  8-K/A as soon as practicable, but not later than 60 days after
                  the date this report must have been filed.

         (b)      PRO FORMA FINANCIAL INFORMATION.

                  It is impracticable  for IHS to provide the required pro forma
                  financial  information on the date this report is being filed.
                  IHS intends to file the required  financial  information under
                  cover of Form 8-K/A as soon as practicable, but not later than
                  60 days after the date this report must have been filed.

         (c)  EXHIBITS.

                  2. Purchase and Sale Agreement, entered into as of November 3,
                  1997, between HEALTHSOUTH Corporation,  Horizon/CMS Healthcare
                  Corporation and Integrated Health Services, Inc. (incorporated
                  herein by reference to Exhibit 2 to Current Report on Form 8-K
                  dated November 3, 1997 of Integrated Health Services, Inc.).

                  10.  Amendment  No. 1 dated as of  December  1,  1997,  to the
                  Revolving  Credit  and Term Loan  Agreement  among  Integrated
                  Health  Services,  Inc.,  the  lenders  parties  to the Credit
                  Agreement and Citibank,  N.A., as administrative agent for the
                  lenders.

                                      -3-

<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                    INTEGRATED HEALTH SERVICES, INC.



Date: January 14, 1998              By: /s/ Taylor Pickett
                                       ------------------
                                       Name: Taylor Pickett
                                       Title: Executive Vice President--Chief
                                               Financial Officer


                                      -4-

<PAGE>



                                  Exhibit Index

          2. Purchase and Sale  Agreement,  entered into as of November 3, 1997,
          between HEALTHSOUTH  Corporation,  Horizon/CMS  Healthcare Corporation
          and Integrated Health Services, Inc. (incorporated herein by reference
          to Exhibit 2 to Current  Report on Form 8-K dated  November 3, 1997 of
          Integrated Health Services, Inc.).

          10.  Amendment  No. 1 dated as of December 1, 1997,  to the  Revolving
          Credit and Term Loan Agreement among Integrated Health Services, Inc.,
          the lenders  parties to the Credit  Agreement and  Citibank,  N.A., as
          administrative agent for the lenders.

                                      -5-
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{"company-data": {"conformed-name": "INTEGRATED HEALTH SERVICES INC", "cik": "0000785814", "assigned-sic": "8051", "irs-number": "232428312", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12306", "film-number": "98506945"}, "business-address": {"street1": "10065 RED RUN BLVD", "city": "OWINGS MILLS", "state": "MD", "zip": "21117", "phone": "4109988400"}, "mail-address": {"street1": "100065 RED RUN BLVD", "city": "OWINGS MILLS", "state": "MD", "zip": "21117"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                    FORM 8-K

                            ------------------------

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)           December 31, 1997
                                                 ---------------------------

                        INTEGRATED HEALTH SERVICES, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

         Delaware                   1-12306                23-2428312
----------------------------      -----------           -----------------
(State or Other Jurisdiction      (Commission             (IRS Employer
     of Incorporation)            File Number)          Identification No.)

 10065 Red Run Boulevard, Owings Mills, Maryland                     21117
--------------------------------------------------                 ----------
(Address of Principal Executive Offices)                           (Zip Code)

Registrant's telephone number, including area code:       (410) 998-8400
                                                   -----------------------------

                                 Not Applicable
--------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

          On  December  31,  1997,  Integrated  Health  Services,  Inc.  ("IHS")
acquired  from  HEALTHSOUTH  Corporation  ("HEALTHSOUTH")  139 owned,  leased or
managed long-term care facilities,  12 specialty  hospitals,  a contract therapy
business  having over 1,000  contracts and an  institutional  pharmacy  business
serving  approximately  38,000 beds. The businesses  acquired,  which had annual
revenues of approximately  $925 million for the 12 months ended August 31, 1997,
were acquired by HEALTHSOUTH in its recent acquisition of Horizon/CMS Healthcare
Corporation.

         Under the terms of the acquisition agreement, IHS paid $1.15 billion in
cash and assumed  approximately  $100  million in debt.  IHS funded the purchase
price with  available  cash from term loan  borrowings  under its $2.15  billion
revolving  credit  and term  loan  facility  and the  sale of its 9 1/4%  Senior
Subordinated Notes due 2008 and borrowings under the revolving credit portion of
the new  credit  facility.  On a pro  forma  basis  after  giving  effect to the
acquisition of these  business from  HEALTHSOUTH  and the  acquisition of RoTech
Medical Corporation and the lithotripsy division of Coram Healthcare Corporation
in October  1997,  IHS' total debt,  including  current  portion,  accounted for
approximately  74% of its total pro forma  capitalization  as of  September  30,
1997. The transaction will be treated as a purchase for accounting and financial
reporting purposes.

          Donaldson Lufkin & Jenrette Securities  Corporation and Morgan Stanley
Dean  Witter  Discover  &  Co.  acted  as  financial  advisors  to  IHS  in  the
transaction.

ITEM 5.  OTHER EVENTS

         In connection with the  acquisition of the businesses from  HEALTHSOUTH
described in Item 2 above IHS and the lenders  under IHS'  revolving  credit and
term loan  facility  (the  "Credit  Facility")  amended  the Credit  Facility to
provide for an additional $400 million term loan facility (the  "Additional Term
Facility") to finance a portion of the purchase price for the acquisition and to
amend  certain  covenants to permit the  consummation  of the  acquisition.  The
Additional Term Facility,  which was borrowed at the closing of the acquisition,
will mature on December 31, 2005, and will be amortized  beginning  December 31,
1998 as follows:  1998 -- $4 million; each of 1999, 2000, 2001, 2002 and 2003 --
$4 million  (payable  in equal  quarterly  installments);  2004 -- $176  million
(payable in equal quarterly installments);  and 2005 -- $200 million (payable in
equal quarterly installments).  The Additional Term Facility bears interest at a
rate equal to, at the option of IHS, either (i) in the case of Eurodollar loans,
the  sum of  (x)  two  and  one-quarter  percent  or two  and  one-half  percent
(depending  on the ratio of IHS' Debt (as  defined  in the Credit  Facility)  to
earnings before interest, taxes, depreciation,  amortization and rent, pro forma
for  any  acquisitions  or  divestitures  during  the  measurement  period  (the
"Debt/EBITDAR  Ratio")) and (y) the interest rate in the London interbank market
for loans in an amount  substantially  equal to the amount of borrowing  and for
the period of borrowing selected by IHS or (ii) the sum

                                      -2-
of (a) the higher of (1) Citibank,  N.A.'s base rate or (2) one percent plus the
latest overnight  federal funds rate plus (b) a margin of one percent or one and
one-quarter  percent (depending on the Debt/EBITDAR  Ratio). The Additional Term
Facility can be prepaid at any time in whole or in part without penalty.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

         (a)      FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

                  It is impracticable for IHS to provide the required  financial
                  statements on the date this report is being filed. IHS intends
                  to file the required financial  statements under cover of Form
                  8-K/A as soon as practicable, but not later than 60 days after
                  the date this report must have been filed.

         (b)      PRO FORMA FINANCIAL INFORMATION.

                  It is impracticable  for IHS to provide the required pro forma
                  financial  information on the date this report is being filed.
                  IHS intends to file the required  financial  information under
                  cover of Form 8-K/A as soon as practicable, but not later than
                  60 days after the date this report must have been filed.

         (c)  EXHIBITS.

                  2. Purchase and Sale Agreement, entered into as of November 3,
                  1997, between HEALTHSOUTH Corporation,  Horizon/CMS Healthcare
                  Corporation and Integrated Health Services, Inc. (incorporated
                  herein by reference to Exhibit 2 to Current Report on Form 8-K
                  dated November 3, 1997 of Integrated Health Services, Inc.).

                  10.  Amendment  No. 1 dated as of  December  1,  1997,  to the
                  Revolving  Credit  and Term Loan  Agreement  among  Integrated
                  Health  Services,  Inc.,  the  lenders  parties  to the Credit
                  Agreement and Citibank,  N.A., as administrative agent for the
                  lenders.

                                      -3-
SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    INTEGRATED HEALTH SERVICES, INC.

Date: January 14, 1998              By: /s/ Taylor Pickett
                                       ------------------
                                       Name: Taylor Pickett
                                       Title: Executive Vice President--Chief
                                               Financial Officer

                                      -4-
Exhibit Index

          2. Purchase and Sale  Agreement,  entered into as of November 3, 1997,
          between HEALTHSOUTH  Corporation,  Horizon/CMS  Healthcare Corporation
          and Integrated Health Services, Inc. (incorporated herein by reference
          to Exhibit 2 to Current  Report on Form 8-K dated  November 3, 1997 of
          Integrated Health Services, Inc.).

          10.  Amendment  No. 1 dated as of December 1, 1997,  to the  Revolving
          Credit and Term Loan Agreement among Integrated Health Services, Inc.,
          the lenders  parties to the Credit  Agreement and  Citibank,  N.A., as
          administrative agent for the lenders.

                                      -5-