Small Rural Hospital Improvement Program

The Small Rural Hospital Improvement Grant Program (SHIP) is supported by the U.S. Department of Health and Human Services, Health Resources and Services Administration's Federal Office of Rural Health Policy (FORHP). Section 1820(g)(3) of the Social Security Act (SSA) authorizes SHIP to assist eligible hospitals in meeting the costs of implementing data system requirements established under the Medicare Program, including using funds to assist hospitals in participating in improvements in value and quality to health care such as:

1.     Value-Based Purchasing Programs (VBP)

2.     Accountable Care Organizations (ACOs) 

3.     Payment Bundling (PB)

How does the Small Rural Hospital Improvement Program (SHIP) work?

Grant funds are distributed nationwide to the State Offices of Rural Health.  Eligible hospitals then receive grant funds, ranging between $11,000 and $13,000, to use toward the aforementioned activities.  The Maryland State Office of Rural Health (SORH) administers the SHIP funds in Maryland.


What are the eligibility criteria for SHIP grants?

Eligibility criteria include:

         Defined as a non-Federal, short-term, general acute care facility;

        Holding 49 available beds or less, as reported on the hospital's most recently filed Medicare Cost Report; and

         Located in a federally-designated rural area (outside a Metropolitan Statistical Area (MSA) or located in a rural census tract of a MSA as determined under the Goldsmith Modification


What impact has SHIP had in Maryland?

         In Fiscal Year 2020, implementation of an electronic surveillance and reporting system for pharmacy services led to nearly 9,000 pharmacy intervention activities being identified to improve service quality.  This investment resulted in an estimated $177,835 in savings ($8,550 in hard cost savings). 


        Grant funding enabled a small rural hospital to implement electronic patient surveys, saving days of staff time each year and increasing patient response rates.  Additional survey data allows for more robust analysis of patient opinions to guide quality improvement activities.  


          In 2020, the SHIP structure enabled federal funds to be directed quickly to small rural hospitals across the nation and in Maryland to support hospitals to prevent, prepare for, and respond to the coronavirus (COVID-19) public health emergency. Funds in Maryland allowed for maintenance of hospital operations. 


For more information, contact:

Sara Seitz

Maryland Department of Health 

Office of Population Health Improvement

201 West Preston Street

Baltimore, MD 21201​

Phone: 410-767-4667​