SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549



                                      FORM 8-K 


                                    CURRENT REPORT


          Pursuant to  Section 13 or  15(d) of the Securities  and Exchange
          Act of 1934


                          Date of Report:  January 25, 1994 



                          CONTINENTAL MEDICAL SYSTEMS, INC.
                (Exact name of registrant as specified in its charter)



                   Delaware                51-0287965           0-15088

           (State of Incorporation)       (IRS Employer       (Commission
                                      Idenitification No.)   File Number)


                                   600 Wilson Lane
                                     P.O. Box 715
                               Mechanicsburg, PA  17055
                           Telephone Number (717) 790-8300
                         ___________________________________ 


          Item 4.  Changes in Registrant's Certifying Accountants

          Following completion  of the  Registrant's fiscal  1993 audit  by
          Price Waterhouse, the  Audit Committee of the  Registrant's Board
          of  Directors   decided  to  entertain  proposals   from  various
          accounting firms,  including Price  Waterhouse, to  serve as  the
          Registrant's  principal  accountant for  fiscal 1994.   Effective
          January 18, 1994, upon the recommendation of the Audit Committee,
          the Registrant's  Board of  Directors approved  the dismissal  of
          Price  Waterhouse and  the engagement  of  Ernst &  Young as  the
          Registrant's  principal   accountant  to   audit  its   financial
          statements for fiscal 1994.

          During each of the two fiscal years  ended June 30, 1993 and 1992
          and the  interim period through  January 18, 1994, there  were no
          disagreements with Price  Waterhouse on any matter  of accounting
          principles  or  practices,  financial  statement  disclosure,  or
          auditing  scope  or  procedures,  which  disagreements,  if   not
          resolved to  Price Waterhouse's  satisfaction, would  have caused
          them to make reference to  the subject matter of the disagreement
          in connection with their report as independent auditors.

          The  audit  reports  of  Price  Waterhouse  on  the  Registrant's
          consolidated financial statements  as of and for  the years ended
          June 30,  1993 and 1992,  did not  contain an adverse  opinion or
          disclaimer of opinion, nor were  they qualified or modified as to
          uncertainty, audit  scope or  accounting principles.   The  audit
          report for  the year end  June 30, 1993 contained  an explanatory
          paragraph  regarding  the  adoption  of  Statement  of  Financial
          Accounting Standards No. 115 "Accounting for  Certain Investments
          in Debt and  Equity Securities"  and a  change in  the method  of
          accounting for  development costs  from deferring  such costs  to
          expensing  such  costs  until  that  time  when  construction  is
          probable. 

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


                                        CONTINENTAL MEDICAL SYSTEMS, INC.


          Date:  January 25, 1994       By:   /S/  Dennis L. Lehman 
                                        Dennis  L.  Lehman,   Senior Vice
                                        President  -   Finance  and   Chief
                                        Financial Officer


                                        Signing on behalf of the registrant
                                        and as principal financial officer.