Small Rural Hospital Improvement Grant Program (SHIP)

Small Rural Hospital Improvement Grant Program (SHIP) is coordinated through the Health Resources and Services Administration's Federal Office of Rural Health Policy (FORHP). SHIP provides funding to more than 1,600 participating hospitals in 47 participating State Offices of Rural Health (SORH) to help small rural hospitals participate in various Affordable Care Act (ACA) delivery system reforms, such as value-based purchasing programs, accountable care organizations and payment bundling.

The three key focus areas of SHIP activities include the following:

  1. Value-Based Purchasing (VBP) investment activities that support improved data collection to facilitate quality reporting and improvement
  2. Accountable Care Organizations (ACO) or Shared Savings investment activities that support the development or basic tenets of ACOs or shared savings programs
  3. Prospective Payment System (PPS) or Payment Bundling (PB) investment activities that improve hospital financial processes

The Iowa program was established per Iowa Code 135M.4 and Iowa Administrative Rule (Chapter 109)  PDF


  • "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 can 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 refer to acute care beds only and does not include psyche unit beds.
  • "Rural" is defined as located outside a Metropolitan Statistical Area (MSA); or located in a rural census tract of a MSA as determined under the Goldsmith Modification or the Rural Urban Commuting Areas (RUCAs) and
  • "Hospital" is defined as non-federal, short-term, general acute care facility.
  • 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.

Web Resources


To learn more about the Iowa Small Rural Hospital Program contact:

Amanda Ramirez | SHIP Coordinator

Iowa Department of Public Health
321 E. 12th St., 4th fl. Lucas Bldg
Des Moines, IA 50319
Phone: (515) 314-6912 | Fax: ( 515) 242-6384
E-mail: Amanda.Ramirez@idph.iowa.gov