IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-60315

RIVER CITY CARE CENTER, 

 Petitioner

v.

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, 

 Respondent

Petition for Review from the United States

Department of Health and Human Services Appeals Board

(A-15-5)

Before DAVIS, SOUTHWICK, and COSTA, Circuit Judges.

PER CURIAM:*

River City Care Center petitions this Court to review an administrative 

law judge’s (ALJ) order sustaining civil money penalties for violating

numerous federal regulations in its treatment of a resident. Because 

substantial evidence supports the ALJ order, we DENY the petition for review.

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 28, 2016

Lyle W. Cayce

Clerk

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I.

River City is a nursing facility in San Antonio, Texas. On April 23 at 3:45 

a.m., one of its residents complained to the staff about shortness of breath and 

congestion. In response, a nurse administered oxygen to the Resident in an 

attempt to alleviate her symptoms. However, before giving the oxygen, the 

nurse did not contact a physician about the Resident’s complaint. At the time, 

the only physician’s order regarding shortness of breath was an instruction to 

provide nebulizer treatments to the Resident. The Resident had not needed 

oxygen previously, and so, no standing order for the resident to receive it 

existed.

Around 11:00 a.m. that same day, the Resident once again complained 

of shortness of breath to the River City staff. This time, the nurses contacted a 

physician who ordered a chest x-ray of the resident “stat.” The results of the xray arrived at roughly 1:30 and revealed that the Resident suffered from a mild 

pulmonary edema and congestive heart failure. The staff of River City called 

the physician’s office but did not reach him. Rather than try again, the staff 

left a note for the next shift of nurses to call the physician. They never called. 

Later in the afternoon on April 23, River City nurses took the Resident 

off oxygen to test her room air tolerance; her oxygen levels plummeted. The 

nurses then re-administered oxygen in an increased amount. They also 

withheld medication from the Resident, because she seemed lethargic and did 

not eat. The staff did not contact a physician about either of these changes in 

treatment.

Thereafter, River City decided that the Resident may need hospice 

services, hospice evaluated and accepted the resident, but River City did not 

tell the Resident’s family about this change – even though the staff knew that 

her sister was a family contact. The Resident’s sister only learned of the 

hospice evaluation when she called River City herself. Resident continued to 

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receive hospice care until April 27 when she was moved to a hospital by her 

sister.

The Texas Department of Aging and Disability investigated how River 

City treated the Resident and determined that it violated numerous federal 

regulations.1 CMS agreed with the Department’s findings and imposed money 

penalties against River City totaling $68,950. Specifically, CMS imposed an 

“immediate jeopardy” penalty of $4050 per day for each day between April 23, 

2013 and May 6, 2013.2 It also assessed a “less than immediate jeopardy” 

penalty of $250 per day between May 7, 2013 and June 24, 2013.

River City appealed these penalties to an ALJ who sustained them. The 

ALJ agreed that River City failed to substantially comply with numerous 

federal regulations. First, River City violated § 483.10(b)(11) when it failed to 

communicate the significant changes in Resident’s condition with her 

physician and family.3 Second, River City violated § 483.13(c) when it failed to 

implement its own policies that required physician and family consultation.4

River City violated § 483.20(k)(3)(i), because when it administered continuous 

 

1 A nursing facility is required to comply with federal regulations to participate in 

Medicare. The Centers for Medicare & Medicaid (CMS) use state agencies to investigate 

compliance with these regulations. Based on “surveys” from the state agency, CMS may 

impose money penalties for noncompliance. The penalty imposed by CMS depends on the 

seriousness of the facility’s noncompliance. The penalty against the facility will continue until 

it attains substantial compliance with the regulations. 42 C.F.R. 488 et seq. Here, the 

Department survey for noncompliance ranged from April 23 – when Resident’s health began 

its downturn – until May 6 – when the Department conducted its investigation. 

2 Immediate jeopardy is “a situation in which the provider’s noncompliance with one 

or more requirements of participation has caused, or is likely to cause, serious injury, harm, 

impairment or death to a resident.” 42 C.F.R. § 488.301. 

3 “A facility must immediately inform the resident; consult with the resident’s 

physician; and if known, notify the resident’s legal representative or an interested family 

member when there is. . .a significant change in the resident’s physical, mental, or 

psychosocial status.” 42 C.F.R. § 483.10(b)(11).

4 “The facility must develop and implement written policies and procedures that 

prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident 

property.” 42 C.F.R. § 483.13(c).

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oxygen without a physician’s order, it did not use the professional standard of 

care.5 Finally, River City violated § 483.25, because it did not provide services 

for the Resident to attain her highest practicable level of functioning.6

After the ALJ’s decision, River City appealed to the Appeals Board for 

the Department of Health and Human Services (DAB). DAB agreed with the 

ALJ findings and upheld the penalties levied against River City. Now, River 

City appeals the ALJ and DAB judgments to this Court.7

II.

We review a finding of fact by an administrative agency for substantial 

evidence.8 Substantial evidence is deferential to the agency, and it requires 

only “more than a mere scintilla” of evidence.9 Stated differently, it only 

requires sufficient evidence that “a reasonable mind might accept as adequate

to support a conclusion.”10

III.

River City’s argument is two-fold. First, it argues that the evidence does 

not support the ALJ finding that its treatment violated federal regulations. 

Second, even if it did violate the regulations, River City asserts that the 

penalties imposed for its violation are not reasonable. We disagree. 

 

5 “The services provided or arranged by the facility must. . .[m]eet professional 

standards of quality.” 42 C.F.R. § 483.20(k)(3)(i).

6 “Each resident must receive and the facility must provide the necessary care and 

services to attain or maintain the highest practicable physical, mental, and psychosocial wellbeing, in accordance with the comprehensive assessment and plan of care.” 42 C.F.R. 483.25.

7 See 42 U.S.C. § 1320a-7a(e) (“Any person adversely affected by a determination of 

the [ALJ or DAB] may obtain a review of such determination in the United States Court of 

Appeals for the circuit in which the person resides, or in which the claim was presented.”).

8 See 42 U.S.C. § 1320a-7a(e) (“The findings of the Secretary with respect to questions 

of fact, if supported by substantial evidence on the record considered as a whole, shall be 

conclusive.”). 

9 Lewis v. UNUM Life Ins. Co. of Am., 188 F. App’x 259, 263 (5th Cir. 2006).

10 Girling Health Care, Inc. v. Shalala, 85 F.3d 211, 215 (5th Cir. 1996).

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Substantial evidence supports the ALJ’s finding that River City was not 

in substantial compliance with federal regulations. Despite River City’s main 

argument that the Resident suffered no significant change in condition, she 

had extensive respiratory problems that previously did not exist. Before April 

23, Resident did not need oxygen; after April 23, she did. She had shortness of 

brief, no longer ate, and appeared lethargic. Moreover, the x-ray results 

revealed a new diagnosis that had not previously existed – congestive heart 

failure.

Despite the obvious change in Resident’s condition, the River City staff 

did not immediately notify her family. Similarly, the River City staff did not 

consult with a physician on the Resident’s symptoms and how they should be 

treated. Instead, the staff acted on its own to begin oxygen treatments and 

reduce her medications. Therefore, as articulated by the ALJ, River City’s 

actions did not conform to numerous federal regulations. 

Also, the penalties imposed on River City are not unreasonable. 

Reasonableness is assessed through statutory factors, including: seriousness 

of the offense, financial condition of the facility, the facility’s degree of 

culpability, and any history of non-compliance by the facility.11 River City 

offered little argument as to how the penalty was unreasonable other than to 

dispute the underlying factual basis for the federal regulatory violations. 

Moreover, given the extensive and pervasive failure of River City to consult 

with physicians and the Resident’s family on significant changes in her 

condition, the amount of the penalty was not unreasonable.

IV.

For these reasons, we DENY the petition to review the decision of the 

Appeals Board for the Department of Health and Human Services.

 

11 42 C.F.R. § 488.438(f)(1)-(4).

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