Data to assess the penalties have been collected and crunched, and Medicare has shared the results with individual hospitals. Medicare plans to post details online later in October, and people can look up how their community hospitals performed by using the Medicare's "Hospital Compare" website.
It adds up to a new way of doing business for hospitals, and they have scrambled to prepare for well over a year. They are working on ways to improve communication with rehabilitation centers and doctors who follow patients after they're released, as well as connecting individually with patients.
Still, industry officials say they have misgivings about being held liable for circumstances beyond their control. They also complain that facilities serving low-income people, including many major teaching hospitals, are much more likely to be fined, raising questions of fairness.
Consumer advocates say Medicare's nudge to hospitals is long overdue and not nearly stiff enough.
"It's modest, but it's a start," said John Santa, director of the Consumer Reports Health Ratings Center. "Should we be surprised that industry is objecting? You would expect them to object to anything that changes the status quo."
For the first year, the penalty is capped at 1 percent of a hospital's Medicare payments. Also, for now, hospitals are only being measured on three medical conditions: heart attacks, heart failure and pneumonia.