Owings Mills, Md. In its latest filing with the U.S. Securities and Exchange Commission, embattled Integrated Health Services said it is under federal investigation for possible violations of the False Claims Act or Medicare regulations.

In light of the company's questionable financial position-it filed for Chapter 11 bankruptcy protection in February-"various agencies of the federal government accelerated efforts to reach a resolution of all outstanding claims and issues related to the company's alleged violation of health care statutes and related causes of action," the company said. While the claims have not been decided, the company said "an unfavorable outcome is probable" and has allocated $39.5 million toward a settlement. It also warned that the final settlement could "differ significantly from such provision."

Company officials did not return phone calls seeking comment.

The filing also included grim results for the fourth quarter of 1999 and the year. For the year ended Dec. 31, IHS reported a net loss of $2.2 billion, or $44.87 per share, compared with a net loss of $68 million, or $1.08 a share, for 1998. For the fourth quarter, the company recorded a net loss of $409 million, or $8.46 a share, compared with net earnings of $10.8 million, or 21 cents a share, for the same quarter in 1998.

The respiratory services company, which also deals in subacute and long-term care and which is the parent company of RoTech, has said its problems stem from the Balanced Budget Act of 1997.

"The dramatic impact of the Balanced Budget Act on our revenues and cash flow severely impacted our current capital structure," said Robert Elkins, chairman and chief executive officer, when the bankruptcy filing was announced.

IHS is being operated as a debtor-in-possession subject to U.S. Bankruptcy Court jurisdiction. It is attempting to restructure its debt obligations, officials said.