Critical care at a hospital trust has been given the worst possible rating after "harm occurred" to patients because beds were not available.
South Tees Hospitals Trust's intensive care was rated inadequate following the inspection of Middlesbrough's James Cook University Hospital and Northallerton's Friarage Hospital.
Inspectors raised concerns over infection control and staff shortages.
The trust said many issues in the report had been addressed.
Critical care is for patients whose conditions are life-threatening and require constant monitoring, often in specialist units.
The Care Quality Commission (CQC), which regulates and inspects health and social care services in England, visited the hospitals in January and February.
It said: "Harm had occurred to patients from three serious incidents because critical care beds were not available.
"Staff were not reporting staffing shortages and their impact, and infection control breaches were due to the service not being able to isolate patients with an infection."
The CQC said its inspectors "found a lack of assurance that nurse staffing levels were appropriate to safely care for patients".
It added: "Whilst leaders were aware of some of the risks, issues and challenges they were not always acted upon in an effective or timely manner."
It has rated critical care in both hospitals as Inadequate, the lowest rating possible and downgraded the trust's overall rating to requires improvement, the Local Democracy Reporting Service said.
Although it did retain its credentials for being caring and responsive
Northallerton's Friarage Hospital A&E was temporarily suspended in March because of patient safety and staff shortages.
The chief inspector of hospitals, Prof Ted Baker, said action needed to be "taken quickly".
The trust said it noted the CQC's findings and had "already completed" a number of actions.
Siobhan McArdle, chief executive, added: "Within the next three weeks we will have finalised a comprehensive action plan to address all outstanding issues."