The Small Rural Hospital Improvement Grant Program (SHIP) supports eligible hospitals in meeting value-based payment and care goals through purchases of hardware, software, and training.
Donor Name: Minnesota Department of Health (MDH)
State: Minnesota
County: All Counties
Type of Grant: Grant
Deadline: 01/09/2026
Size of the Grant: $10,000 to $100,000
Grant Duration: 1 Year
Details:
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 (HRSA) Federal Office of Rural Health Policy (FORHP). Section 1820(g)(3) of the Social Security Act 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 improving health care quality and value.
Funding Priorities
The use of SHIP funds must be prioritized in the following areas:
- Critical Access Hospitals (CAHs)
- CAHs must meet Medicare Beneficiary Quality Improvement Project (MBQIP) participation requirements to improve hospital quality outcomes. The Flex Program will attest to MBQIP participation on behalf of the CAH. Please visit the Minnesota Critical Access Hospital Reporting and Improvement Assistance for technical assistance resources. Even with the available technical assistance CAHs are still eligible to use SHIP dollars for MBQIP quality improvement. Non-federal tribal hospitals may use another culturally sensitive federally managed measure of hospital quality outcomes.
- If a CAH has implemented MBQIP activities, that hospital may select a different activity from the SHIP Allowable Investments.
- If a hospital is currently using all hardware, software, equipment, or trainings listed on the SHIP Allowable Investments, the hospital may identify an alternative piece of equipment or service if:
- The purchase will optimally affect the hospital’s transformation into an accountable care organization, increase value-based purchasing objectives, or aid in the adoption of ICD-11; and
- The hospital receives pre-approval from both the state SHIP director and FORHP. Contact the MDH SHIP Program to begin this process
Funding Information
- For the 2026 program year the estimated maximum award for each hospital is $13,528.
- The 2026 grant program year is anticipated to start in June 2026 and end in May 2027.
Eligibility Criteria
Eligible small rural hospitals are non-federal, short-term general acute care facilities located in a rural area of the United States and the territories, including faith-based hospitals. They may be for-profit, not-for-profit or tribal organizations.
- “Eligible small rural hospital” is defined as a non-federal, short-term general acute hospital that: (i) is located in a rural area as defined in 42 U.S.C1395ww(d) and (ii) has 49 available beds or fewer, as reported on the hospital’s most recently filed Medicare Cost Report.
- “Rural area” is defined as: (1) located outside of a Metropolitan Statistical Area (MSA); or (2) located within a rural census tract of an MSA, as determined under the Goldsmith Modification or the Rural-Urban Commuting Areas (RUCAs); or (3) being treated as if being located in a rural area pursuant to 42 U.S.C. 1395(d)(8)(E).
- Eligible SHIP hospitals may be for-profit or not-for-profit, including faith-based. Hospitals in U.S. territories as well as tribally operated hospitals under Title I. and V. of P.L. 93-638 are eligible to the extent that such hospitals meet the above criteria.
- Critical Access Hospitals (CAHs) are rural by definition and qualify for SHIP.
For more information, visit MDH.
