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

Hospitals participating in the Small Rural Hospital Improvement Program (SHIP) are permitted to make investments in hardware, software, and training to comply with quality improvement activities such as advancing patient care information, promoting interoperability, and payment bundling. According to the Centers for Medicare and Medicaid Services, the Bundled Payments for Care Improvement (BPCI) initiative links payments for the multiple services beneficiaries receive during an episode of care.  

The example activities listed below — from the FY 2022 SHIP Allowable Investments — are not intended to be a comprehensive list, but can assist eligible SHIP hospitals in planning and selecting appropriate investments.

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

Examples of Payment Bundling (PB) or Prospective Payment System (PPS) Investment Activities

PB or PPS Investment Activities

Allowable Investments

A. International Statistical Classification of Diseases and Related Health Problems Version 10 (ICD-10) software

  • Training that updates and computerizes hospital policies and procedures to comply with ICD-10*
  • Hardware/software investments that improve quality, efficiencies, and coding

B. ICD-10 training

C. Efficiency or quality improvement training in support of PB or PPS-related initiatives

Training that improves processes through the adoption of best practices and the transition to value-based payment strategies such as the following:

D. S-10 Cost Reporting training

E. Price transparency training

Training to support hospital compliance with price transparency rule. Funding cannot support consultants or vendors to build a price transparency software or website development time. SHIP funds can support staff training by a consultant.

Training on revenue cycle management* to improve processes that provide clear information about charges and costs to Medicare beneficiaries. Training examples:

* New or expanded activities and examples

PB/PPS-Specific Investment Activities by SHIP Hospitals, FY 2018 - FY 2020

SHIP Hospital Use of PB/PPS Funds FY2020

For more information or for additional support, please contact the SHIP Technical Assistance Team at ship-ta@ruralcenter.org   


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