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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 2023 SHIP Allowable Investments (178.3 KB)

— 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

Examples of Allowable Activities

A. ICD-11 software

  • Training to support coding and reimbursement to prepare for and implement ICD-11
  • Hardware/software investments that improve quality, efficiencies, and coding

B. ICD-11 training

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

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

D. S-10 Cost Reporting training

  • Debt and charity care training
  • Training to improve charity care processes and develop policy guidelines for S-10 Cost Reporting

E. Price transparency training

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

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