SHIP Allowable Investments


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Allowable Investment Categories

Clarification of Allowable and Unallowable Investments

The Small Rural Hospital Improvement Grant 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 Value-Based Purchasing, Accountable Care Organizations, and Payment Bundling (PB)/Prospective Payment System (PPS) subpages outline examples and suggested topic areas for trainings by category to assist eligible SHIP hospitals in planning and selecting activities.

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

There are updates this year to the priority items of HCAHPS and ICD-10. HCAHPS has been a priority in SHIP to support the Flex Medicare Beneficiary Quality Improvement Project work. However, with the impacts of COVID-19 FORHP aims to relieve reporting burden for CAHs during the COVID-19 pandemic, so while we highly encourage continued reporting for CAHs, we are suspending the HCAHPS priority for FY2021 SHIP

SHIP is also suspending the ICD-10 coding priority item for FY 2021 at this time. ICD-10 training and related activities was added a priority under SHIP to assist hospitals compliance with the Centers for Medicare and Medicaid (CMS) ICD-10 billing requirements 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 healthcare 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 hospital operating in the United States to provide clear, accessible online pricing information on the hospital services.

The FY 2021 Allowable Investment Menu is not a complete list and is only intended to provide examples of allowable SHIP activities. For additional clarifications, refer to the SHIP Allowable Investments Search Tool and Frequently Asked Questions (FAQs).

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.