Small Rural Hospital Improvement Grant Program (SHIP)

The Small Rural Hospital Improvement Grant Program (SHIP) is coordinated through the Health Resources and Services Administration's (HRSA) Federal Office of Rural Health Policy (FORHP). SHIP provides funding to hospitals in 46 participating State Offices of Rural Health (SORH) to help small rural hospitals engage in various Affordable Care Act (ACA) delivery system reforms, such as value-based purchasing programs, accountable care organizations, prospective payment systems and payment bundling.

Key Focus Areas

Hospitals must first meet SHIP funding priorities before using resources to support investments in other areas. SHIP funding priority areas include implementation of Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) reporting and ICD-10 coding.

If these priorities are in place, hospitals may choose activities in three key focus areas. The three key focus areas of SHIP activities include the following:

See FY19 Allowable Investments for example activities and topic areas. This document is not a complete list and is only intended to provide examples for allowable SHIP activities.

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 aid in the adoption of ICD-10; and b) the hospital receives pre-approval from both the state SHIP coordinator and the appropriate Federal Office of Rural Health Policy project officer.

Eligibility

• "Small" is defined as 49 available beds or less, as reported on the hospital's most recently filed Medicare Cost Report, line 12.
• The average daily census or average staffed bed count may NOT be used to determine hospital eligibility.
• Hospitals reporting a licensed bed count greater than 49 on Line 12, but that staff 49 beds or fewer, may self-certify eligibility by submitting a written statement including: (1) the number of staffed beds at the time of the most recent cost report submission; (2) the cost reporting period of the most recently filed cost report; and (3) the signature of the certifying official.
• Regarding eligibility, the “49 beds or less” refers to acute care beds only and does not include psych unit beds.
• "Rural" is defined as either: (1) located outside of a Metropolitan Statistical Area (MSA); (2) located within a rural census tract of a MSA, as determined under the Goldsmith Modification or the Rural Urban Commuting Areas (RUCAs); or (3) is being treated as if located in a rural area pursuant to 42 U.S.C. 1395(d)(8)(E).
• "Hospital" is defined as non-federal, short-term, general acute care facility.

Resources

• SHIP Fact Sheet
• Small Rural Hospital Improvement Program
• State Office of Rural Health
• SHIP 101 Webinar Slides
• SHIP 101 Webinar Recording
• Frequently Asked Questions
• SHIP Hospital Resources
• Hospital Success Stories