Federal health officials have announced they will take the rare step of cutting all Medicare and Medicaid funding to St. Joseph Medical Center on December 3, a potentially catastrophic blow to the downtown hospital.

The announcement comes after a federal inquiry into the case of an off-duty Houston Police Department officer who, while moonlighting as security at the hospital, shot a combative patient admitted to the hospital's mental health unit earlier this year. For more than a month the federal Centers for Medicare and Medicaid Services have threatened to defund St. Joseph unless hospital administrators could fix systemic issues that, according to the feds, put the hospital's patients in “immediate jeopardy" — issues that came to light because of the August 27 shooting of Alan Pean, a 26-year-old patient.

CMS investigators interviewed St. Joseph administrators in September, just days after the off-duty cop shot Pean, who had checked himself into the hospital amid severe panic attacks. According to CMS's 51-page report on the incident, Pean, who has a history of manic depressive and anxiety disorders, grew confused and repeatedly left his room naked after being admitted. When nurses couldn't get him to stay in his room, staff called for hospital security—which just so happened to be two off-duty HPD officers.

According to the federal report, Pean grew aggressive with the officers when they entered his hospital room unannounced. The officers tased Pean when he wouldn't calm down. At one point, according to the report, an officer was hit with a hospital tray table and responded by firing a bullet into Pean's chest (the bullet nearly hit a vital artery; Pean survived the shooting).

According to hospital staff interviewed by CMS investigators, the cops kept Pean on the ground, in handcuffs, even after he'd been shot; Pean, according to one nurse, was “hollering and screaming, talking gibberish.”

In their report, the feds state that hospital administrators initially blamed Pean, saying his behavior in the throes of a mental health crisis justified the shooting. According to their report, St. Joseph CEO Mark Bernard told investigators the off-duty officer entered “police mode” during the shooting and was justified in using lethal force against a combative patient.

“If it should happen today, they would not have done anything different,” Bernard told investigators. According to the report, other hospital administrators “stated the Police Officers were justified in tasing and shooting [Pean] because the patient's aggression towards the officers was a criminal offense.” According to CMS's report, HPD would not let hospital staff even question its officers following the shooting.

CMS had granted St. Joseph's officials numerous lifelines by extending the funding cut-off deadline. On Friday, the hospital's last deadline to comply with CMS's demands, the agency at last announced its determination in a letter to St. Joseph CEO Bernard: St. Joseph will lose Medicare and Medicaid funding on December 3 because of its “continued non-compliance with Medicare's basic health and safety regulations.”

“While this was not the anticipated outcome, this action is necessary to ensure that patients have access to care and treatment in a safe environment, as is expected in all Medicare-certified facilities,” said David Wright, CMS's regional administrator, in a statement to the Houston Press.

While St. Joseph won't be reimbursed for any Medicaid or Medicare patients as of December 3, the hospital has until January 13 to contest CMS's decision to pull funding. Such an appeal would go before an administrative law judge with the U.S. Department of Health and Human Services' appeals board.

Update 4:05 p.m.: St. Joseph Medical Center provided us this statement that CEO Mark Bernard sent to hospital staff earlier today:

