Four high-flying NHS trusts have suffered a serious blow to their ambitions as a result of this year's star ratings.
Newcastle Hospitals NHS Trust lost its three star rating
Aintree Hospitals, Essex Rivers Healthcare, Newcastle upon Tyne Hospitals and Walsall Hospitals have all been downgraded to two stars.
That means they will miss out on the opportunity to join the first wave of foundation trusts in April next year.
They had already made the 29-strong shortlist. However, only trusts with three stars are eligible for foundation status.
Foundation trusts will have greater freedom from government control. They will also be able to raise extra money to fund patient services.
Managers at Newcastle upon Tyne Hospitals NHS Trust say they have been unfairly penalised for failing to meet just one main target - waiting times for outpatients.
"We are surprised. We did expect to retain our three star status. I think there has been something of a statistical quirk. We are rather dismayed," trust chief executive Len Fenwick told the BBC.
He said the trust lost its top rating because 127 outpatients waited longer than 26 weeks to be seen.
He said these represent just 0.07% of the 180,000 outpatients seen each year.
"We do tend to run a number of highly specialised services in Newcastle with something of an open ended commitment seeing patients from Scotland right down to the south of England.
"We will have to reconsider our position in respect of those services in the future if we are to satisfy the requirements set by CHI," said Mr Fenwick.
"I think this is something of a shabby show. We have excelled in everything we have done."
Professor Michael Griffen, a consultant surgeon at the trust, said: "Patients themselves are going to be disadvantaged by the withdrawal of a million pound grant that comes with three star status."
Aintree Hospitals NHS Trust appears to have lost its top rating for a number of reasons, including long waits in A&E, a poor complaints procedure and problems dealing with the MRSA superbug.
James Birrell, its chief executive, said staff were disappointed. But he added: "In relation to our application to become a foundation trust, we still hope to move forward as quickly as possible."
Essex Rivers Healthcare NHS Trust appears to have lost its top rating because of long waits for operations and high numbers of cancelled operations.
Chief executive Mike Pollard said: "Losing a star is a big disappointment. I feel particularly sorry for our staff who have worked so hard to cope with
rising demand and continuing cost pressures."
Mr Pollard said the rating would only delay temporarily the trust's
ambition to become a foundation hospital.
"Instead of being one of the first we shall now look to be in the second wave in October 2004, six months later than previously planned," he said.
A poor report from the Commission for Health Improvement is being blamed for Walsall Hospitals NHS Trust's poor showing.
John Rostell, its chief executive, criticised the trust's rating.
"We did robustly challenge the process and persuaded CHI to review our progress against an action plan last month," he said.
"Regrettably and incomprehensively, CHI have now determined that there has been insufficient progress to make any impact."
The trust is now hoping to join the second wave of foundation trusts.
The star ratings also included some notable winners.
Dartford and Gravesham NHS Trust and West Suffolk Hospitals NHS Trust both jumped up to the table this year.
Both trusts scored just one star last year. That has now been upgraded to three stars, making them eligible for foundation status.
Sue Jennings, chief executive of Dartford and Gravesham, said: "This outstanding result reflects the sheer determination and professionalism of the staff."
The trust's success is down to a number of key changes over the past year.
These include a new "see and treat" policy which has cut waits in A&E and a dedicated 23-hour surgery unit, which ensures 10 beds are always available for routine surgery cutting the number of cancelled operations.