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Allowable Investments

Small Rural Hospital Improvement Program allowable investments include activities that assist small rural hospitals with their value and quality improvement efforts and adaptation to changing payment systems through investments in hardware, software, and related training.

The Small Rural Hospital Improvement Program (SHIP) supports eligible hospitals in meeting value- based payment and care goals for their respective organizations, through purchases of hardware, software, and training. SHIP also enables small rural hospitals: to become or join accountable care organizations (ACOs); to participate in shared savings programs; and to purchase health information technology (hardware and software), equipment, and/or training to comply with quality improvement activities, such as advancing patient care information, promoting interoperability, and payment bundling.

Unallowable investments include but are not limited to, travel costs, hospital patient care services, hospital staff salaries, or general medical and office supplies. Hospitals should contact their State Office of Rural Health (SORH) with questions regarding the appropriateness or fit of a certain activity, training, or hardware/software purchase.

For additional clarification, refer to the SHIP Allowable Investments Search Tool or Frequently Asked Questions (FAQs).

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Looking for Allowable Investments?

State Office of Rural Health staff and hospital staff can search online to determine whether potential activities are allowable or unallowable under the SHIP Program.
Access the Allowable Investments Search Tool

SHIP Funding Priorities

Hospitals must first meet SHIP funding priorities before using resources to support investments in other areas.

SHIP funds should be prioritized by participating Critical Access Hospitals (CAH) in the following manner:

  1. Hospitals must meet MBQIP participation requirements in order to improve hospital quality outcomes. Non-federal tribal hospitals may use another culturally sensitive federally managed measure of hospital quality outcomes.

And

  1. ICD-11 coding readiness and/or implementation activities.

If a CAH has implemented both MBQIP and ICD-11 activities, then that hospital may select a different activity listed on the SHIP Allowable Investments contained within the hospital application.

SHIP funds for non-CAHs should be prioritized in the following manner:

1)    ICD-11 coding readiness and/or implementation activities

If a Prospective Payment System hospital has implemented ICD-11 activities then that hospital may select a different allowable activity.

If a CAH or non-CAH (PPS hospital) is currently using all hardware, software, equipment, and/or trainings listed on the SHIP Allowable Investments, the hospital may select alternative hardware, software, equipment, and/or training provided:

  1. The purchase will optimally affect the hospital’s ability to transform its practice and participate in a Medicare Shared Savings Program or an ACO, increase value based purchasing objectives, aid in the adoption of ICD-11, and/or support care transitions/coordination. Hospitals are encouraged to align SHIP purchases in ways that ensure the consistent and systematic fair, just, and impartial treatment of all patients by addressing Social Determinants of Health (SDOH) to improve the quality of healthcare provided; and
  1. The hospital receives permission from both its SORH SHIP Director if in a state and the state/territory’s SHIP Director’s FORHP Project Officer.

In This Toolkit

Toolkit

Accountable Care Organizations (ACO)

Provides examples of Accountable Care Organization investment activities and resources that align with the SHIP category to support SHIP-eligible hospitals with investments in training and improvement activities.
Toolkit

Value Based Purchasing (VBP)

Provides examples of Value-Based Purchasing investment activities and resources that align with the SHIP category to support SHIP-eligible hospitals with investments in training and improvement.
Toolkit

Payment Bundling (PB)/Prospective Payment System (PPS)

Provides examples of Payment Bundling/Prospective Payment System investment activities and resources that align with the SHIP category to support SHIP-eligible hospitals with investments in training and improvement activities.

The Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS) provided financial support for this Information Services to Rural Hospital Flexibility Project. The award provided 100% of total costs and totaled $1,200,000. The contents are those of the author. They may not reflect the policies of HRSA, HHS, or the U.S. Government.  

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