Small Rural Hospital Improvement Program (SHIP)

Background
The Small Rural Hospital Improvement Program (SHIP) is authorized by Section 1820(g)(3) of the Social Security Act (42 U.S.C. 1395i-4). The program was first authorized by the Balanced Budget Act of 1997 to help small rural hospitals implement data systems required by the Medicare Prospective Payment System (PPS). The reauthorization of the program through the Patient Protection and Affordable Care Act expanded SHIP to support eligible hospitals in meeting value-based purchasing goals and to enable small rural hospitals to become or join a Medicare Shared Savings Program or ACOs and purchase health information technology, equipment, and/or training to comply with meaningful use, ICD-101 standards, and payment bundling.

Grant Details
The purpose of SHIP is to help small rural hospitals with 49 beds or fewer implement quality and operational improvement efforts to align with value-based care. The program supports eligible small rural hospitals in meeting value-based payment and care goals for their respective organizations through purchases of hardware, software, and training.
SHIP also assists such hospitals in participating in delivery system reforms such as becoming or joining a Medicare Shared Savings Program or Accountable Care Organizations (ACOs), participating in other shared saving programs, and purchasing health information technology, equipment, and/or training to comply with quality improvement activities such as advancing patient care information, promoting interoperability, and payment bundling.

Eligibility Requirements
Eligible hospitals within the territories that do not have access to a State Office of Rural Health (SORH) must apply to the SHIP program individually.
Eligible 'small rural hospital' is defined as a non-federal, short-term general acute care hospital that is located in a rural area as defined in 42 U.S.C. 1395ww(d) and has 49 available beds or fewer, as reported on the hospital’s most recently filed Medicare Cost Report.

Period of Performance
The period of performance for the grant is from June 1, 2023 through May 31, 2028 (5 years).

Grant Value
$20,734,674 is estimated to be available annually to fund approximately 1,600 hospitals consolidated under 46 state recipients with award amounts of approximately $13,011 per hospital per year. The actual amount available will not be determined until enactment of the final FY 2023 federal appropriation.

Place of Performance
The State Office of Rural Health (SORH) in each state will be the official award recipient of record and will act as fiscal intermediary for all eligible small rural hospitals within the state.