SHIP Allowable Investments

Allowable Investment Categories

Clarification of Allowable and Unallowable Investments

In general, SHIP allowable investments include activities to assist small rural hospitals with their quality improvement efforts and with their adaptation to changing payment systems through investments in hardware, software, and related training. This includes aiding with value and quality improvement.

Unallowable investments include, but are not limited to, travel costs, hospital services, hospital staff salaries, or general supplies. Hospitals should contact their State Office of Rural Health (SORH) with questions regarding the appropriateness or fit of a certain activity or hardware/software purchase. For additional clarifications, refer to Frequently Asked Questions (FAQs).

SHIP Funding Priorities

Hospitals must first meet SHIP funding priorities before using resources to support investments in other areas. SHIP funding priority areas include:

  • SHIP funded investments are prioritized based on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) reporting and ICD-10 coding.
  • Hospitals must utilize resources to fully implement ICD-10 coding and HCAHPS reporting to Hospital Compare before the facility can select any other investment options without exceptions.
  • Hospitals with low HCAHPS volume are still required to report HCAHPS to participate in the SHIP Program.

Hospitals that do not follow the purchasing priorities and/or purchase hardware and/or software or services that are not listed on the SHIP Purchasing Menu without prior approval may be subject to penalties including exclusion from the next SHIP funding opportunity.

If a hospital has already completed ALL investments listed on the SHIP purchasing menu, the hospital may identify an alternative piece of hardware and/or software and/or service ONLY IF: a) the purchase will optimally affect the hospital’s transformation into an accountable care organization, increase value-based purchasing objectives and/or assist with prospective payment system investment activities; and b) the hospital receives pre-approval from both the state SHIP Coordinator and the appropriate Federal Office of Rural Health Policy project officer.

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, $1,009,121 (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.