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. Additionally, SHIP funds may not be applied to support coronavirus-related (COVID-19) activities or be used to supplement program activities under the COVID-SHIP grant.

The FY 2022 Allowable Investment Menu below outlines examples and suggested topic areas for training, by category, to assist eligible SHIP hospitals in planning and selecting activities. Hospitals should contact their State Office of Rural Health with questions regarding the appropriateness or fit of a certain activity, training, or hardware/software purchase.

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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.

SHIP Funding Updates and Recommendations

In an effort to relieve the reporting burden for critical access hospitals (CAHs) during the COVID-19 pandemic, the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) priority remains suspended in FY 2022 (June 1, 2022 - May 31, 2023); although the Federal Office of Rural Health Policy (FORHP) highly encourages continued reporting for CAHs. For additional details on the Medicare Beneficiary Quality Improvement Program (MBQIP) within the Flex Grant program, please refer to the MBQIP resources.

The ICD-10 coding priority also remains suspended for FY 2022. ICD-10 training and related activities were added under SHIP to assist hospitals' compliance with Centers for Medicare and Medicaid Services' (CMS) ICD-10 billing requirements which went into effect in October 2015. At this time, most hospitals have completed the conversion to the ICD-10 system for accurate billing so participating SHIP hospitals are not required to prioritize these activities before selecting any other investment options.

HCAHPS and ICD-10 related activities will remain on the Allowable Investment Menu and hospitals may continue to select activities within these categories. In lieu of a funding priority, FORHP recommends that hospitals utilize funding to support quality improvement and/or health care finance requirements such as, but not limited to:

  • Develop or implement training, hardware/software that supports the application and expansion of telehealth and/or telemedicine
  • Comply with CMS's Price Transparency rule by January 1, 2021, which requires hospitals operating in the United States to provide clear, accessible online pricing information on the hospital services.

The FY 2022 Allowable Investment Menu below is not intended to be a comprehensive list but rather to provide examples of allowable SHIP activities. For additional clarification, refer to the SHIP Allowable Investments Search Tool and Frequently Asked Questions (FAQ).

For more information or for additional support, please contact the SHIP Technical Assistance Team at

In This Toolkit

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.
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.
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.

This project is/was supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under grant number UB1RH24206, Information Services to Rural Hospital Flexibility Program Grantees, $1,100,000 (0% financed with nongovernmental sources). This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the U.S. Government.

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