Kaiser Health News writes: The Centers for Medicare & Medicaid Services on Wednesday identified 786 hospitals that will receive lower payments for a year under the Hospital-Acquired Condition (HAC) Reduction Program, a creation of the Affordable Care Act. The penalties are designed to encourage better care without taking the extreme step of tossing a hospital out of the Medicare and Medicaid programs, which would drive most hospitals out of business. Now in their sixth year, the HAC penalties, remain awash in criticism from all sides. Hospitals say they are arbitrary and unfair, and some patient advocates believe they are too small to make a difference. Research has shown that while hospital infections are decreasing overall, it is hard to attribute that trend to the penalties. This year, Medicare penalized seven of the 21 hospitals on U.S. News’ Best Hospitals Honor Roll, an annual ranking often used as a proxy for identifying the most prestigious facilities.