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Dr. Robert Smith owned his family practice for over 20years. He came from a family of success. His father was a brain surgeon and hismother a well-known author. His younger brother, Saul, owned his own accountingfirm for several years, but came to work with Dr. Smith after he sold it for amodest amount.

After graduating at the top ofhis class from Johns Hopkins University, Dr. Smith was awarded a cardiothoracicsurgery fellowship in New York. He spent a few years there and was well on hisway 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 ofZoar, Ohio, to take care of him. Under Dr. Smith’s care, his father startedshowing signs of improvement. He was glad not only for his father, but that hecould go back and continue his pursuit of becoming a heart surgeon. On the dayhe was set to leave, his mother became ill and died a few days later from arare form of cancer that showed no symptoms. The devastation hit the familyhard. Saul was still in college, and Dr. Smith’s father needed someone to bewith him at all times. Dr. Smith decided to stay in Zoar to take care of hisfather. He opened up a family practice in the town, thus putting his dream ofbecoming a heart surgeon on hold indefinitely.

Over the years, Dr. Smithsometimes felt regret that he never achieved his dream, but his job as the towndoctor had been fulfilling. Now Saul was working with him, helping with thebusiness. This made things significantly easier for Dr. Smith, who haphazardlykept his own books and patient files. One day, as Saul organized Dr. Smith’spiles of paperwork, he noticed there were charges to Medicaid that must be amistake. While most of the population of Zoar, Ohio, was considered low-levelincome and qualified for Medicaid, this was not the case for all patients.There were several elderly middle- and higher-income families who regularlyvisited the office and usually paid with a check or cash. Saul assumed hisbrother’s administrative office skills were poor and aimed to fix it. However,as Saul organized the paperwork and checked files, these charges to Medicaidappeared 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 andsaid, “Yes, they are over age 65, so I made a bill for Medicaid.”

“But we have records they paidyou with cash,” Saul replied. He handed Dr. Smith an old receipt. “And thereare similar instances with some of your other patients. Besides, Medicaid isfor low-income patients, not the elderly. Mr. and Mrs. Bennett are clearly notlow-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 backinto his office and shut the door, leaving Saul standing in the hallway with astack of files.

Saul knew what his brother gaveup 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 ofthem and the amount of money charged exceeded $ 75,000.

“What happened to all thatmoney?” Saul wondered. He also wondered how to handle the situation. He thoughtto himself, “How can I report this without sending Robert to jail? If I don’treport it and Medicaid finds out, I could go to jail and lose my accountinglicense. This is such a small town. If anybody finds out, we’ll never live itdown.” At that moment, the phone rang, and Saul was the only one there toanswer it.


DescribeSaul’s ethical dilemma.

2.Whywould Medicare fraud be a white-collar crime?

3.Howshould Saul approach the situation?

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