Several Capital Region hospitals are among 724 nationwide that will have their Medicare payments cut due to high rates of infection and other injuries, which may indicate errors in treatment.

Local hospitals affected by the 1 percent cut in payments include Ellis Hospital in Schenectady, Saratoga Hospital and Columbia Memorial Hospital in Hudson.

It is the first time the federal Medicare health insurance program has implemented such cuts. The penalties are part of an effort to reduce hospital-acquired conditions, mandated by the federal Affordable Care Act, known as Obamacare. Many of the law's changes seek to improve medical results and patient experiences while reducing costs.

Consumer advocates praised the fines as a method for improving the quality of hospital care. Hospital officials, however, argued that the data used to determine the penalties are old, and that the payment cuts will be a significant hindrance to enacting new quality initiatives.

"Infections and medical mistakes cost hospital patients dearly — both in terms of their health as well as their finances," said Blair Horner, legislative director of New York Public Interest Research Group. "Hopefully if hospitals start to feel some of that pain, they will work harder to reduce needless infections and mistakes."

"To be getting penalized as you're improving is a counterintuitive measure, and it certainly doesn't help you to continue to improve," said Bill VanSlyke, a spokesman for Columbia Memorial Hospital.

Officials from each of the three hospitals said they have put measures in place to reduce infections and injuries, and that their performance has improved since the data reviewed by federal officials was collected. The Center for Medicare and Medicaid Services looked at patient safety data that covered the period from July 2011 to June 2013, and two infection rate measures from January 2012 to December 2013, according to Dr. Richard Falivena, chief medical officer of Saratoga Hospital.

None of the hospital officials reached could say how much of their revenues come from Medicare, which primarily covers seniors and disabled Americans. But they all said Medicare is an important income source, especially as they operate on slim margins.

"Hospitals today are under enormous economic distress, and any reduction in revenues is significant," Falivena said.

Arthur Levin of the New York City-based Center for Medical Consumers said it remains to be seen whether the penalties have an impact.

"We'll have to see whether the fines are significant enough to make a difference," Levin said. "If penalties aren't large enough, then this can become a cost of doing business. That doesn't help patients."

The cuts are effective for services rendered since the beginning of the federal fiscal year, which is Oct. 1, 2014.

The penalties come on the heels of a report from the U.S. Department of Health and Human Services, released earlier this month, that found the frequency of medical mistakes dropped by 17 percent at hospitals nationwide between 2010 and 2013. A state Health Department report released a year ago also showed hospital infection rates dropping throughout New York.

Hospitals that received payment cuts from CMS were those whose scores put them among the worst 25 percent in the country for infection rates and injuries. That formula is troubling, said Kathleen Ciccone, vice president of the Quality Institute at the Healthcare Association of New York State, a hospital group. Hospitals can improve on all quality measures reviewed, but still remain in the worst 25 percent, if most other hospitals also do better. They might also be penalized for a score that would have placed them in the better-performing group in a previous year.

"I personally believe that hospitals and patients would get much better benefit from a positive program that promoted training," Ciccone said.

Also on the list of hospitals being penalized by CMS was Burdett Care Center in Troy, a specialized maternity hospital. A spokesman there said Burdett administrators were confused about their inclusion on the list. They rarely do procedures that result in the infections looked at — bloodstream infections caused by a central line and urinary tract infections caused by catheters. And virtually none of their patients is covered by Medicare.

CMS was not immediately able to provide information to clarify that issue on Friday.

chughes@timesunion.com • 518-454-5417 • @hughesclaire