Read the case. Answer the 3 Questions, Cover page, Reference page, Running head (Resolving Ethical Business Challenges), at least 2 double -spaced pages, at least 2 references,APA, textbook- Business Ethics, by Ferrell, Fraedrich, Ferrell, 2015
Dr. Robert Smith owned his family practice for over 20 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 cardio-thoracic 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 tie, however, his father became ill. Dr. Smith decided to return to his hometown of Zoar, 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 Zoar to 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 has 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 Zoar, Ohio, was considered low-level income and qualified for Medicaid, this was not the case for all patients. There were several elderly middle- – 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 65, 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 $75,000. “What happened to all that money?” Saul wondered. He also wondered how to handle the situation, He though 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.
1. Describe Saul’s ethical dilemma.
2. Why would Medicare fraud be a white- collar crime?
3. How should Saul approach the situation?
Resolving Ethical Business Challenges
An ethical dilemma is a complex situation which involves a perceived mental conflict between two options both of which bring negative results and require decision-making based on social norms as well as personal conviction (Ferrell & Fraedrich, 2015). It may also be described as a situation where a choice has to be made between two options neither of which solves the problem in an amicable way. Though complex and intricate, ethical dilemmas present a challenge in which a person has to select the less harmful alternative with respect to future consequences (Trevino, 1986). In business, ethical dilemmas can be solved after careful consideration of the presented alternatives in the selection of the option that leads to the least adverse effects for all the parties involved.
The ethical dilemma presented in this scenario involves Dr. Smith, a medical practitioner, and his brother Saul, an accountant. After being assigned to keep his books and carry out administrative affairs, Saul observes that his brother Dr. Smith, the resident physician in the town operating a family practice, has been making incorrect charges to Medicaid for several patients back, dating to the past five years. Dr. Smith has been using Medicaid for the elderly patients, such as Mr. and Mrs. Bennett, as opposed to using it for low-income patients only. These same patients paid cash or check to the doctor for the services received while Dr. Smith simultaneously billed Medicaid for their care. The total amount charged to Medicaid for the wrongful billing is $75,000. When Saul confronted his brother regarding this discrepancy, Dr. Smith shrugged it off as probably an accounting or administrative error. The ethical dilemma presented is whether Saul should report Dr. Smith and expose him to the risk of facing jail time or ignore the situation and dismiss it like his brother did and risk losing his accounting license once Medicaid unearths the crime.
A white collar crime is a money-oriented non-violent crime committed by professionals such as business persons and government officials (Weber, 1994). It is often difficult to prosecute because it mostly involves sophisticated systems and different players. The Medicare fraud presented in this scenario can be considered a white collar crime because it has been committed by a professional, in this case Dr. Smith. The crime is also money-oriented as Dr. Smith aims to get double earnings, that is, profit from patients’ cash and checks as well as reimbursements from Medicaid. The fraud also qualifies as a white collar crime because it is non-violent.
Saul should approach the situation by first identifying the ethical dilemma as comprehensively illustrated above. Next, Saul needs to reflect on and list down the key values and the principles he stands for. He needs to establish whether any of the two alternatives conflicts with any of his values and principles and if so go with the other alternative. This is an important step so as to ensure that the decision made is in line with Saul’s beliefs and what he holds dear. It also helps him rid himself of guilt arising from future consequences. Finally, Saul needs to develop an action for the preferred course of action and a detailed step-by-step plan on how to undertake all the activities involved in the chosen alternative (Tenbrunsel, 1998). Most importantly, amidst all the above consideration and criteria, Saul needs to keep in mind the outcome of his decision and its effect on Dr. Smith’s immediate and extended family.
In conclusion, ethical dilemmas present an individual with a challenge to select one option from a pair of fairly difficult choices, both of which have moral and social implications. The ethical dilemma presented above challenges Saul to choose between reporting his brother who would face possible prosecution and turning a blind eye to the situation. Both scenarios would have far-reaching consequences not only for Saul and Dr. Smith but also for their professions, their families and on the town as a whole. It is up to Saul to consider all possible alternatives as well as his values and principles to reach a sound decision and to end the ethical dilemma at hand.
Ferrell, O. C. & Fraedrich, J. (2015). Business ethics: Ethical decision making and cases. Boston, MA: Nelson Education.
Tenbrunsel, A. E. (1998). Misrepresentation and expectations of misrepresentation in an ethical dilemma: The role of incentives and temptation. Academy of Management Journal, 41(3), 330-339.
Trevino, L. K. (1986). Ethical decision making in organizations: A person-situation interactionist model. Academy of management Review, 11(3), 601-617.
Weber, J. (1994). Ethical Dilemmas in Business. Business and Society, 33(3), 329.
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