Read the below case study and answer the three questions below.
Case Study: Dr. Robert Smith owned his family practice for over years. He came from a family of success. His
father was a brain surgeon and his mother a well-known author. His younger brother, Saul, owned his own
accounting firm for several years, but came to work with Dr. Smith after he sold it for a modest amount. After
graduating at the top of his class from Johns Hopkins University, Dr. Smith was awarded a cardiothoracic
surgery fellowship in New York. He spent a few years there and was well on his way to fulfilling his dream of
becoming a heart surgeon. During this time, however, his father became ill. Dr. Smith decided to return to his
hometown of Zora, Ohio, to take care of him. Under Dr. Smith’s care, his father started showing signs of
improvement. He was glad not only for his father, but that he could go back and continue his pursuit of
becoming a heart surgeon. On the day he was set to leave, his mother became ill and died a few days later
from a rare form of cancer that showed no symptoms. The devastation hit the family hard. Saul was still in
college, and Dr. Smith’s father needed someone to be with him at all times. Dr. Smith decided to stay in Zora to
take care of his father. He opened up a family practice in the town, thus putting his dream of becoming a heart
surgeon on hold indefinitely. Over the years, Dr. Smith sometimes felt regret that he never achieved his dream,
but his job as the town doctor had been fulfilling. Now Saul was working with him, helping with the business.
This made things significantly easier for Dr. Smith, who haphazardly kept his own books and patient files. One
day, as Saul organized Dr. Smith’s piles of paperwork, he noticed there were charges to Medicaid that must be
a mistake. While most of the population of Zora, Ohio, was considered low-level income and qualified for
Medicaid, this was not the case for all patients. There were several elderly middles- and higher income families
who regularly visited the office and usually paid with a check or cash. Saul assumed his brother’s
administrative office skills were poor and aimed to fix it. However, as Saul organized the paperwork and
checked files, these charges to Medicaid appeared to increase, dating back at least five years. Saul
approached his brother. “Robert, are you aware you charged Medicaid for Mr. and Mrs. Bennett’s visits?”
“Hmmm. Let me see the paperwork,” Dr. Smith asked. Saul handed it to him. Dr. Smith glanced at the
document and said, “Yes, they are over age, so I made a bill for Medicaid.” “But we have records they paid you
with cash,” Saul replied. He handed Dr. Smith an old receipt. “And there are similar instances with some of
your other patients. Besides, Medicaid is for low-income patients, not the elderly. Mr. and Mrs. Bennett are
clearly not low-income.” Looking a little bit flustered, Dr. Smith replied, “Saul, you know how I am with details.
I’m no good at it. That’s why I hired you. Thanks for catching my mistake.” Dr. Smith walked back into his office
and shut the door, leaving Saul standing in the hallway with a stack of files. Saul knew what his brother gave
up for their family and the good he did for the families in this small town, but he was convinced these charges
were not accidental. There were too many of them and the amount of money charged exceeded $. “What
happened to all that money?” Saul wondered. He also wondered how to handle the situation. He thought to
himself, “How can I report this without sending Robert to jail? If I don’t report it and Medicaid finds out, I could
go to jail and lose my accounting license. This is such a small town. If anybody finds out, we’ll never live it
down.” At that moment, the phone rang, and Saul was the only one there to answer it.
Questions | Exercises
• Describe Saul’s ethical dilemma.
• Why would Medicare fraud be a white-collar crime?
• How should Saul approach the situation?