The Arizona Center for Rural Health (AzCRH) serves Arizona through its core mission to improve the health and wellness of Arizona’s rural and underserved populations. It houses programs including the State Office of Rural Health (AzSORH), the Rural Hospital Flexibility Program (AzFlex), the Small Rural Hospital Improvement Program (AzSHIP), Arizona First Responders Initiative (FR-CARA), Students Helping Arizona Register Everyone (SHARE), the Prescription Drug Misuse & Abuse Initiative, and the Rural Health Professions Program. The purpose of AzSHIP is to help small rural hospitals with 49 beds or less implement quality and operational improvement efforts to align with value-based care. The Federal Office of Rural Health Policy (FORHP) administers the SHIP award through the State Offices of Rural Health (SORH). Each SORH applies to FORHP on behalf of eligible hospital applicants in its state. The SORH is the official award recipient of record and serves as fiscal intermediary for all eligible hospitals within the state. AzSORH faculty and staff ensure that AzSHIP is coordinated with AzFlex and other AzCRH programs. For the FY 2019 funding year, AzSHIP received applications from 11 of 14 eligible rural hospitals, 10 of these are Critical Access Hospitals (CAHs). Critical Access Hospitals that applied to participate in the program are: Banner Page Hospital in Page, Arizona, Coconino County(Co.); Cobre Valley Regional Medical Center (Globe; Gila Co.); Copper Queen Community Hospital (Bisbee; Cochise Co.); Gila River Health Care (Sacaton, Pinal Co.); La Paz Regional Hospital (Parker, La Paz Co.); Little Colorado Medical Center (Winslow; Navajo Co.); Navajo Health Foundation Sage Memorial Hospital (Ganado, Apache Co.); Northern Cochise Community Hospital (Willcox, Cochise Cty); White Mountain Regional Medical Center (Springerville, Apache Co); and Wickenburg Community Hospital (Wickenburg, Maricopa Co.). One PL-638 Self Determination, small, rural non-CAH has applied to participate: San Carlos Apache Healthcare Corporation (Peridot, Gila Co.). The FY 2019 Federal investment in AzSHIP is based on an allocation of $12,000 per eligible hospital. About 59% of the proposed total SHIP funding for FY 2019 will support Value-based Purchasing investments; 27% will support Accountable Care Organization/Shared Savings; and 14% will support Payment Bundling/Prospective Payment Systems.