The Small Rural Hospital Improvement Program (SHIP), overseen by the Minnesota Department of Health, aims to assist small rural hospitals in implementing value-based payment systems and improving health care quality. The program is supported by the U.S. Department of Health and Human Services through the Federal Office of Rural Health Policy. SHIP funding focuses on enabling hospitals to comply with Medicare program requirements, improve health care quality, and achieve financial sustainability. For the 2025 program year, the estimated maximum grant award for eligible hospitals is $13,832, distributed equally based on state allocations. The grant does not require matching funds and operates on an annual funding cycle, with the 2025 program year running from June 2025 to May 2026.

The program supports non-federal, short-term general acute care hospitals with 49 or fewer beds, located in rural areas. Eligible entities include for-profit, nonprofit, and faith-based organizations, as well as tribal hospitals. Critical Access Hospitals automatically qualify under their rural designation. Applicants must disclose potential organizational changes, such as mergers, during the application process. Collaboration is encouraged, and hospitals may apply as networks or consortia.

SHIP funding can be used for a variety of purposes, including purchasing hardware and software, providing training, and supporting efforts related to value-based purchasing, accountable care organizations, and payment bundling. Examples include implementing electronic health records, conducting quality improvement training, and enhancing interoperability systems. Certain expenses are ineligible, such as staff salaries, contractor fees without training components, and supplies for patient satisfaction.

Applications must be submitted online via the Minnesota Department of Health’s Grants Portal by January 10, 2025, at 4:30 p.m. Central Time. Required materials include a completed application form, budget allocation, project descriptions, and disclosures. Current SHIP grantees must reapply to receive funding for the new cycle. An informational webinar will be held on December 17, 2024, to assist applicants, with materials available afterward.

Selection criteria include compliance with submission requirements, alignment with SHIP goals, and detailed descriptions of planned activities. Grantees are required to submit mid-year and final reports to ensure accountability and secure payments. The state reserves the right to conduct monitoring visits and financial reconciliations for grants exceeding $50,000. Technical assistance is available from the Minnesota Department of Health.

The program emphasizes compliance with affirmative action, nondiscrimination laws, and conflict-of-interest disclosures. Applications become public after the evaluation process, except for designated trade secrets. The program timeline includes specific deadlines for reporting and invoicing, with the final report due by July 2026. Grantees must ensure their projects align with the state and federal requirements outlined in the program guidelines.