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Value Based Purchasing (VBP)

Hospitals participating in the Small Rural Hospital Improvement Program (SHIP) are permitted to make investments in hardware, software, and training that help to improve quality data collection and reporting in meeting value-based payment and care goals. Centers for Medicare and Medicaid Services value-based programs reward health care providers with incentive payments for the quality of care they provide to Medicare beneficiaries.

The example activities listed below — from the

FY 2024 SHIP Allowable Investments (1.37 MB)

— 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 Value-Based Purchasing (VBP) Investment Activities


VBP Investment Activities

Examples of Allowable Activities

A. Quality reporting data collection/related training or software

CAHs should participate in the Medicare Beneficiary Quality Improvement Project (MBQIP).

MBQIP Resources:

Any activity to support process improvements that result in improved quality reporting and/or inpatient and outpatient measures for PPS acute care hospitals.

B. HCAHPS data collection process/related training

Activities to improve HCAHPS data collection, reporting, provider communications, and patient and family engagement that directly patient satisfaction scores. Hospitals may use funds to support an HCAHPS vendor to assist them in fully implementing HCAHPS and improved reporting.

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

Consider adopting Six Sigma, Lean, Plan-Do-Study-Act, or other such efficiency or quality improvement processes to address performance issues related to VBP initiatives, such as the following:

D. Provider-Based Clinic (Rural Health Clinic) quality measures education

Any activity that supports educational training for provider-based clinic quality improvement reporting and scores, including patient satisfaction survey scores.

SHIP State Learning Collaborative

E. Alternative Payment Model and Quality Payment Program training/education

Software or training to prepare staff and physicians for the Quality Payment Program (QPP), which determines payment based on quality, resource use, clinical practice improvement, and meaningful use of certified electronic health record (EHR) technology.

VBP Investments by SHIP Hospitals, FY 2018 - FY 2020

 VBP Investments by SHIP Hospitals FY 2018- FY 2020

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


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