SHIP Allowable Investments: Spending Categories

Allowable Investment Spending Categories

Hospitals participating in the Small Rural Hospital Improvement Program (SHIP) are permitted to make investments in one (or potentially more) of three areas as they seek to meet value-based payment and care goals:

Allowable purchases within these three categories are hardware, software, and training.

Unallowable investments include, but are not limited to:

  • Travel costs
  • Hospital patient care services
  • Hospital staff salaries
  • 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.

Examples of allowable SHIP activities can be found in the

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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.  

SHIP Funding Updates and Recommendations

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 allowable investments 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, and/or purchase 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 hospital services.

For more information or for addition support, please contact the SHIP TA team at


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