Allowable Investments Search Tool

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 trainings. 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).

This tool classifies a number of example investment activities as Allowable, Unallowable, or PO Pre-Approval. This is not a comprehensive list. It is only intended to provide examples of allowable SHIP activities.

Remote/Telepharmacy Services
Accountable Care Organization (ACO)

Updated May 2022: See definitions "Telehealth," "Training," "Hardware," and "Software." 

Training, hardware, and software that support the application and implementation of remote pharmacy (telepharmacy) services are allowable. 

Some examples of allowable expenses include but are not limited to: 

Telepharmacy software, telepharmacy software/apps to support after-hours pharmacy services, telepharmacy machines, telepharmacy machines that can dispense pre-packaged medication, printer and printing supplies used for telepharmacy operations (i.e., printing instructions with pre-packed medication), computers, and accompanying hardware to support telepharmacy operations. 

See also: telehealth, hardware, software, office supplies, training.

NOTE: The cost of personnel, medications, medication delivery, refilling pre-packaged medication, assistants, or hardware for direct patient care are unallowable. 

Medical Equipment and Supplies (Including EMS)

Updated May 2022 - See definition: "Supplies, Medical" and "Equipment, Medical" 

All medical equipment used for the treatment or diagnosis of a patient's illness or injury is unallowable. Medical equipment that serves as day-to-day operational equipment is unallowable.

Examples include but are not limited to: patient lifts, bed lifts, blood pressure cuffs, oxygen monitors, hand washing sinks, ventilation hoods, respirators, purifiers, crash carts, percussion beds, medical books or manuals (excluding books or manuals provided explicitly for training on an approved SHIP category), medical pamphlets, stethoscopes, refrigerators, medicine, dispensers, sanitizers, label printing, UV lights.

Note about Bluetooth equipment: Purchasing Bluetooth-enabled medical devices are unallowable (Blood pressure cuffs, stethoscopes, oxygen monitors, etc.).

Telehealth Application and Implementation
Accountable Care Organization (ACO)

Updated May 2022, See definitions: "Hardware," "Software," "Supplies," "Equipment," and "Telehealth." 

Training, hardware, and software supporting the application and implementation of telehealth services (telemedicine, remote healthcare, telepharmacy, etc.) are allowable expenses. 

Examples of allowable expenses may include but are not limited to: 

Computers, laptops, and tablets* that are used to allow patients to access a telehealth service; Telehealth software purchases (that connect the patient to the provider) including standard subscription services; Carts that allow for the free movement of telehealth hardware; Cameras, and microphones to support application and implementation of telehealth services; Wires, connections, and cables to support telehealth implementation. 

*iPads and Tablets used for other purposes are unallowable. Hospitals must use them for telehealth applications and implementation. 

Costs associated with diagnosis, treating, and stabilizing a patient through telehealth options are unallowable expenses. Example: The hospital can purchase a camera, but is not allowed to pay the tele-physician's fees for treatment.

See also: Medical Equipment and Supplies and Patient Use Equipment

Note: Telecommunication training, hardware, and software are unallowable. This is defined as supplies or equipment that provide communication aid but not patient care/efficiency. An example would be a Zoom subscription for staff meetings.


Direct Patient Care (Definition)

Direct patient care occurs when a facility, its providers, or staff, provide services (directly or indirectly) to diagnose, stabilize, treat, repair, maintain, or improve the health of a patient regardless of patient status (inpatient, outpatient, swing bed, SNF, etc.) or location (med/surgical, emergency room, waiting room, ambulatory, etc.,), and is an unallowable expense.

When using SHIP funds, the expenditure must not go towards training, objects, supplies, or materials that will directly treat a patient.

Example: Telehealth implementation is an approved SHIP expenditure. Purchasing software and training that will enable staff to receive readings from a Bluetooth-enabled blood pressure cuff is allowable under telehealth implementation, but the blood pressure cuff itself is unallowable. Training on how to use the blood pressure cuff is unallowable. 

Wellness Streaming Services
Accountable Care Organization (ACO)

Updated May 2022

Software and hardware SHIP infrastructure for wellness streaming services as a population health project is an allowable use of SHIP funds.

Staff Salaries and Payroll

Updated May 2022

Hospital staff salary, benefits, incentives, and bonuses, of any kind, are unallowable.  

See also: COVID

Transferring Unused SHIP Funds to Another Participating Hospital

Updated May 2022

Unused SHIP funds cannot be transferred to another participating hospital.

Indirect Costs

Updated May 2022

Indirect costs are deducted from the total award amount per state.

Indirect Cost Calculation - Grantee may request the lesser of 15 percent of the award total or their current federally negotiated indirect cost rate agreement. Indirect costs are deducted from the total award amount, not in addition to the total award amount. Grantees are not required to take indirect costs.

Training Travel and Lodging Expenses (Vendor)
Accountable Care Organization (ACO)

Updated May 2022, See definitions: "Training," "Contract," and "Consulting/Reviews"  

Travel and lodging costs for vendors, contractors, or a subject matter expert (SME) to travel to and from SHIP-approved training are allowable. The hospital or network should request an invoice with all related training costs (including time, travel, and lodging) bundled as one single deliverable.

NOTE: SHIP Guidance doesn't approve travel for hospitals and state offices.

See also: Training

Fees and Fines

Updated May 2022, See Definitions: "Fees" and "Costs." 

Fees and fines accrued in association with a service provided to the hospital, regardless of the SHIP-approval status, are not to be paid with SHIP funds. Note that some costs are referred to as "fees" and may be allowable (like ACO Fees), fees in this context are subsidiary costs, the recurring cost for use of services, or lack thereof. 

Examples of unallowable fees include but are not limited to: 

Bank services fees, Library Fees, Penalty Fees, or any fines accrued through the use of services to the hospital.

See also: ACO Fees, PCMH Status Application Fee

Recurring Payment (Definition)

A recurring payment is defined as a pre-determined payment given over a pre-set schedule to continue services or products previously received or continuously received. Recurring payments are unallowable. Payments that occur each SHIP fiscal year for a SHIP-approved category, such as yearly ICD training, are not considered recurring and should be recorded as individual purchases.

Note: The SHIP allowable investment definitions do not replace the Code of Federal Regulation definition for a term. The terms in the search tool help nuance your understanding of how expenses are determined. 

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, $1,560,000 (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.