SHIP Program

The Small Rural Hospital Improvement Grant Program (SHIP) was first authorized by the Balanced Budget Refinement Act of 1999 of the Social Security Act. The original purpose of the SHIP grant was to help small rural hospitals meet the costs of implementing data systems required to meet requirements of the Medicare Prospective Payment System (PPS). Since that time, funding has also supported HIPAA compliance, programs to reduce medical errors and support quality improvement, and health information technology.

Currently, the SHIP grant supports activities in four eligible funding categories:

  • Prospective Payment System (PPS) implementation and updating;
  • Accountable Care Organization (ACO) concepts to improve quality outcomes;
  • Payment Bundling (Bundling) to build accountability across the continuum of care; and
  • Value-Based Purchasing (VBP) to improve data collection.

Alabama's SHIP grant is administered by the Alabama Department of Public Health (ADPH) through the Office of Primary Care and Rural Health (OPCRH). In 2018, thirty-four hospitals are eligible as non-Federal, short-term, general acute care facilities, with forty-nine staffed beds or less, located in rural Alabama.

The OPCRH supports SHIP hospitals by assisting their pursuit of financial viability and quality improvement, and as they serve as essential access points for Medicare, Medicaid, and uninsured patients. The OPCRH further supports SHIP hospitals by collecting and disseminating health information, coordinating rural resources, providing technical assistance, promoting recruitment to improve access to rural health care, and strengthening partnerships, all of which are goals of the State Office of Rural Health.

SHIP eligible hospitals must complete a grant application to receive grant funding.

To receive reimbursement for the activity/item purchased, the hospital must submit a Reimbursement Request complete with receipts, signatures, and payment documentation (copy of check or check number). Reimbursement cannot exceed the maximum grant funds awarded.

Any questions about an activity, reimbursement, or procedures should be directed to the SHIP Program Manager Karl Bryant at or (334) 206-5517.

Page last updated: November 20, 2019