The federal government Thursday lowered a year’s worth ofMedicare payments to 751hospitals to penalize them for having the highest rates ofpatient injuries.

More than half also were punished last year through the penalty,which was created by the Affordable Care Act and began four yearsago. The program is designed as a financial incentive for hospitalsto avoid infections and other mishaps, such as blood clots andbedsores.

Get The Data: See All 751Hospitals Penalized

The penalties again fell heavily on teaching hospitals, althoughless than before. A third of them were punished this year, a KaiserHealth News analysis of the penalties found. Last year, the penalty was levied onnearly half of the nation’s teaching hospitals.

The 115 penalized academic medical centers this year includeDenver Health Medical Center, Grady Memorial Hospital in Atlanta,The Mount Sinai Hospital in New York City, Northwestern MemorialHospital in Chicago, Stanford Health Care hospitals in Californiaand the University of California-San Francisco (UCSF) MedicalCenter, according to federal records.

“Academic medical centers serve patients with more-complexconditions who are at greater risk of hospital-acquired infections(HAIs) compared to community health care providers,” StanfordHealth Care said in a written statement. “Hospitals with a highrate of immunocompromised patients will always seem to have higherHAIs.”

Hospitals that treat large proportions of low-income people alsowere fined more than hospitals with a more affluent patient base,the analysis found. About a third of those safety-net hospitalswere penalized, roughly the same as last year.

The penalties have been controversial from the beginning. Thehospital industry faults them as unfairly punishing hospitals thattreat sicker patients and those that do a better job of identifyinginfections and other patient complications. Patient advocates saythat, while not perfect, the penalties have been a valuable prod tomake hospital executives consider more than the bottom line.

“The program has been very instrumental in focusing hospitals onthe problems of patient safety and improved quality,” said Dr.Kevin Kavanagh, board chairman of Health Watch USA, a patientadvocacy group. However, he said, the financial uncertainty createdby the Republican efforts to revoke the Affordable Care Act has nothelped.

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Kaiser HealthNews (KHN) is a national health policy news service. It isan editorially independent program of the Henry J. Kaiser FamilyFoundation which is not affiliated with KaiserPermanente.

“Right now it’s hard for hospitals to improve patient safetywhen there’s been so much turmoil in the health care market,” hesaid. “The hospitals have the tools and knowledge to make itbetter, and they should do so.”

Dr. Atul Grover, executive vice president at the Association ofAmerican Medical Colleges, said that while teaching hospitals as agroup fared better than last year, “we are still disproportionatelyaffected.”

There were 336 hospitals that lost money a year ago but werespared this time, the analysis showed. They include Barnes JewishHospital in St. Louis, Brigham and Women’s Hospital in Boston,Cedars-Sinai Medical Center in Los Angeles, the Cleveland Clinic,Geisinger Medical Center in Danville, Pa., Hospital of theUniversity of Pennsylvania in Philadelphia, Intermountain MedicalCenter in Murray, Utah, and the University of Michigan HealthSystem in Ann Arbor.

Medicare penalized 425 hospitals that it also had punished lastyear. For all the penalized hospitals, the reductions willretroactively apply to Medicare payments from the beginning of thefederal fiscal year in October and through the end of September2018. Medicare will cut by 1 percent its payments for eachpatient’s stay as well as the amount of money hospitals get toteach medical residents and to care for low-income people. Thetotal amount for each hospital depends on how much they end upbilling Medicare.

The factors considered in the Hospital-Acquired ConditionReduction Program include rates of infections from hysterectomies, colonsurgeries, urinary tract catheters and central line tubes insertedinto veins. It also encompasses rates of methicillin-resistantStaphylococcus aureus, or MRSA, and Clostridiumdifficile, known as C-diff. Medicare also takes into accountthe frequency of 10 types of in-hospital injuries, including bedsores, hip fractures, blood clots, sepsis and post-surgical woundruptures. Together, these kinds of potentially avoidable events areknown as hospital-acquired conditions, or HACs.

Some hospitals have been targeting the infections that Medicarenot only penalizes but also publicizes on its Hospital Compare website. UCSF, for instance, said it hasbeen focused on reducing surgical site infections and C-diff cases.“We remain committed to continually decreasing infection rates toprovide the highest level of care for our patients,” UCSF said in astatement.

While the Centers for Medicare & Medicaid Services hadtweaked its methods for assessing payments, the hospital industryremained displeased with the core design of the penalty. Congressdecreed that Medicare penalize the worst-performing quarter ofgeneral hospitals each year, guaranteeing that more than about 750hospitals lose money every year even if they had improved theirsafety records.

In some cases, the difference between penalized hospitals andthose that escaped punishment was negligible, said Nancy Foster,vice president for quality and patient safety at the AmericanHospital Association. “It’s a ‘HACidental’ payment policy,” shesaid. “It’s frustrating that you know that many hospitals end upgetting a significant penalty when their performance is notdifferent from other hospitals.”

Several types of hospitals are excluded from being consideredfor penalties. They include hospitals that treat psychiatricpatients, veterans or children. Also exempted are hospitals withthe “critical access” designation for being the only provider in anarea. Maryland hospitals are excluded from the program becauseMedicare has a separate method of paying them.

Kaiser HealthNews (KHN) is a national health policy news service. It is aneditorially independent program of the Henry J. Kaiser Family Foundation whichis not affiliated with Kaiser Permanente.