Casey Smitherman: A School Superintendent Commits Insurance Fraud to Help a Student (January 2019)

Smitherman was arrested in January by turning herself in.

Case Controversy

    A school superintendent from Elwood, Indiana resigned after she committed insurance fraud using her son's name on her insurance to get medication for an ill 15-year-old student. The school superintendent named Casey Smitherman was arrested on charges of insurance fraud, official misconduct, and identity deception. Smitherman had been helping this unidentified student for a while with things like cleaning his house and buying him clothes. One day, the student was absent from school and Smitherman went to seek his whereabouts. When she arrived at his home, she escorted him to a nearby clinic to have him prescribed medication. When Smitherman brought him, he was denied treatment because he was not covered by any insurance and she was not his guardian. She had taken the ill student to a doctor and paid for all his treatments using her son’s insurance which resulted in the previously stated charges. Once she was arrested on January 15th, she eventually was released on $500 bail later that day. During this time, Casey Smitherman was the superintendent of Elwood Community School Corporation.

    Following the charges that were placed on her, she had stated, “Unfortunately, my recent lapse in judgment has brought negative attention to the community and myself. I am very embarrassed for that, and I apologize to the board, the community and the teachers and students of Elwood Community Schools,” Smitherman said in a statement to the news station. “I sincerely hope this single lapse in judgment does not tarnish all of the good work I’ve done for students over the span of my career” (Wang 2019). The medical costs for the treatment were about $233. After the student was given the antibiotic amoxicillin to treat his strep throat, he had told a teacher about it and then the teacher went to the school nurse. After word got out about it, Smitherman thought the best thing to do was to be honest and admit herself in to the Elwood Police Department on her felony charges. The insurance that she had used for the student was Anthem Blue Cross. The story about what Smitherman had done spread like wildfire all over the Internet after local news outlets reported the insurance fraud. Many people took this situation and incorporated it into political debates on how to improve insurance coverage. Some people actually viewed Smitherman as a hero and commended her for her actions. According to CBS news, Smitherman had mentioned that she was embarrassed by what she called a “lapse in judgement” (CBS, 2019). Smitherman said she would enter a diversion program that will expunge her charges as long as she avoids further arrests in the coming year. Smitherman had good intentions, but unfortunately, she did the wrong thing by impulsively using her son’s insurance to get the student medication. When she acquired the prescription for antibiotics, she gave it to the student and then dropped him off at his house.

    Smitherman felt embarrassed after news got out about the crimes she committed. The school nurse said that the district is equipped to handle children that are in need of medical attention (Helsel 2019). Smitherman clearly regretted her decisions when she had turned herself in after word got out at school. Her main concern was the safety and well-being of the student. She even told ABC news that her intent was to help the child and she knows what she did was wrong, but she was just scared for him (Winsor 2019). According to ABC news, she has since returned to her job as superintendent of the Elwood Community Schools. Since Smitherman did this within a short period of time, it can be inferred that she was not thinking about the legal consequences from using her son's name on the insurance to obtain medication for the student.

Stakeholders

Steve Smitherman with his wife Casey Smitherman. 

    The stakeholders that were affected from this incident would be the student, Smitherman’s son, Casey Smitherman, The Elwood Community, and the Board of Elwood Community Schools. The 15-year-old student was the main stakeholder in this case because he had strep throat, which caused Smitherman to act out of impulse to make sure he received the proper treatment. Smitherman’s son was an inactive participant, but still considered a stakeholder because his name was used under the insurance for the student in need. Casey Smitherman was the main protagonist of the case. She was a stakeholder as well because her life and reputation were changed by this event. The Elwood Community was a stakeholder too due to public opinion throughout the community about what Smitherman did. Lastly, The Board of Elwood Community Schools can be considered a stakeholder because they worked alongside Smitherman and they still stood with her after the event.

The Theories

Individualism

    Individualism or the economic theory is all about maximizing profits within the constraints of the law. Milton Friedman was an individualist who believed that the main moral obligation of a business is to maximize profits for the owners within the rules of the law. He also believed that anything that takes away from one’s profit like giving to charities and employee benefits would be considered stealing or deceptive. Through an individualistic perspective, everything is seen with minimal morality, which is considered trust and reliability. Since the Elwood Community Schools are nonprofit, individualism would not apply to this case because there is no profit to maximize. Nonprofits are geared towards making enough money to stay afloat and to keep the business running. Since the school superintendent committed insurance fraud, it is not within the constraints of the law. Therefore, individualism would not agree with this case for those two reasons.

Utilitarianism

    Utilitarianism is about maximizing your overall happiness in yourself and others and minimizing the pain. John Stuart Mill popularized Utilitarianism by making it clear that happiness or pleasure are the only things of intrinsic value. Utilitarianism comes with shortcomings such as knowing that there is no way to measure happiness and individual freedom matters rather than overall happiness. In this case, Utilitarianism disagrees with Smitherman because she tried to maximize her overall happiness by ensuring the student was able to return to a healthy state after the antibiotics cleared up his throat in the short run. She also tried to maximize the student’s overall happiness by giving him the medication needed to make him feel better and recover from the strep throat. Smitherman also minimized the student's overall pain when she acted outside the constraints of the law to provide him with the necessary care. Although she did act ethically, it was only for the short-term benefits. In the long-term, Smitherman and the student were not happy at all because she ended up getting arrested and the student must feel guilty about the fact that he told a teacher about what Smitherman did for him. From a Utilitarian’s perspective, the ends do not justify the means like when Smitherman told the truth about the crimes she committed. Although, it does appear as if Smitherman did act ethically, but in fact she did not. Therefore, Utilitarianism does not agree with Smitherman’s actions due to the long-term effects on her and the student.

Kantianism

    Kantianism focuses heavily on informing the main stakeholder about any consequences or effects of the thing they are trying to purchase or use to maximize the potential for them to make the correct choice. A Kantian evaluation takes into consideration respecting someone’s individual autonomy and the need for one to make a rational decision. The basic principles of Kantianism are to act rationally and to be motivated by Good Will, which is doing what is right because it is right. To determine the right or rational decision, a Kantian would use the Categorical Imperative. The Categorical Imperative is the Law of Rationality that functions around maxims. A maxim is explained as doing one thing in order to achieve another thing. The Categorical Imperative is followed up with the Formula of Humanity and determining the right motivation in a particular instance. The Formula of Humanity says to act in the way you treat humans, whether in your own person or in another, always at the same time as an end and never as a means (Salazar 2019). The Formula of Universal Law is one of the laws of rationality. It uses the rule of consistency to eradicate maxims that are internally inconsistent or impossible to will. The Formula of Universal Law states to act according to your maxim to eventually turn it into a universal law that everybody follows or abides by. If someone took Smitherman as an example to provide healthcare for all, then eventually if more people started supporting the maxim of helping everyone to achieve stronger health in our society, it could turn into a universal law. If enough people backed it up, it may turn into a law over time. Kantianism would disagree with Smitherman’s actions because it was an act of deceit and she used the insurance as a means to acquire medication for the student. If Smitherman had taken more time to contemplate other options to help the student and make the correct choice instead of deceiving the clinic, then Kantianism would have been in her favor.

Virtue Theory

    Virtue theory is based on Aristotelian Functionalism. The Aristotelian Functionalism has to do with how well one flourishes in a business society. In this case, Smitherman acted according to the functionalism and therefore flourished as a result. She displayed rationality and exercised this in her attempt to aid the student with her best efforts. What is virtuous relies on what that thing is. Virtues are characteristics that allow things to function properly and they are referred to as ‘good-making features’ or ‘virtues’. They depend on the thing’s function and circumstances. The opposite of a virtue would be a vice. The four main virtues of someone’s character are courage, honesty, temperance, and justice. Virtue theory would interpret this case by saying Smitherman acted virtuously. Due to the circumstance that Smitherman was in and the information she received at the time, she acted virtuously because, she was courageous in the sense that she was willing to take a risk. Smitherman acted ethically because she showed sympathy for this student and cared about his future and his health. Even though she was not honest at first when she lied about the student being her son, she redeemed herself in the end because she acted rationally and was aware of her wrongdoings. Therefore, she acted honestly when she confessed to the police about what she had done. Smitherman also acted with temperance or self-control when she was assisting the student with his sickness, she had reasonable desires to help him in the process and she knew what to expect from her actions. The last virtue, justice, was evident in this case because Smitherman was an extremely hard worker throughout her community and she had good intentions the whole time. Although Smitherman had committed insurance fraud, she did not do anything viciously because she desired to help the student. Also, when she felt like he was not getting enough care from her perspective, she decided to step in and try to help the student to the best of her ability. In this case, virtue theory would agree with Smitherman’s actions because her circumstance was justifiable for all she wanted was to keep her community healthy and safe.

Justified Ethics Evaluation

    In my opinion, I believe that Smitherman should not be punished so much for committing insurance fraud because she did it with the intent to aid a student in need. I think the diversion program is fair enough for the situation she is in now. Even though most of the ethical theories do not agree with what Smitherman did, I think she deserves moral credit for facilitating the medication to the student. From a legal standpoint, I understand that she did commit insurance fraud and that is wrong. Nevertheless, this should serve as an example to find a way to allow healthcare for everyone. Everybody should be able to access a medical facility and get the right treatment in a time of need.

Action Plan

Elwood Community School Corporation

    Now, I will examine what she should or could have done to prevent going beyond the legal barrier in a step-by-step process. First, she could have called the student’s parents first to see exactly what the situation was. Then she should have tried to go to the school nurse to see if they were equipped to issue antibiotics to the student. If all else failed, she could of reached out to anyone to get advise on where the student could go to receive the proper treatment. The best thing for Smitherman would have been to look at this situation from a Kantian’s point of view. With a Kantian mindset, she would have been able to dissect the predicament she was in with the student and been able to make a more refined decision that would have caused the least harm legally to both parties involved. A mission statement for the company that I think is important to abide by is to think about all your actions beforehand and re-evaluate it from a rational standpoint. This mission statement is different from what Smitherman did because she acted out of impulse and did not think about how severe the consequences would be. The mission statement provided is an improvement to Smitherman’s case because she did not use rationality when making a quick decision by using her son’s insurance. A recommended set of core values that the Board of Elwood Community Schools should use is consideration, rationality, and altruism. To ensure ethical productivity and the monitoring of ethics in the community, I would arrange monthly meetings to collaborate with the board to come up with effective ways to give back to the community. Teachers can also be evaluated once a year through cameras and through interactions with someone from the state to ensure there is no unethical behavior in the classroom. Another thing that can ensure ethical productivity is by hosting public events where students work together in teams and earn prizes for their efforts. I think the most effective way to increase the ethical conduct throughout the community is by giving everyone the ability to access healthcare needs even if they cannot afford it. The procedures that would help the community flourish after this controversy would be to let Smitherman keep her job and transport her to another district or keep her in the same one.

    To keep the ethical conduct in the community, teachers and anyone involved in school-related activities should abide by ethics and if not, then they will be fired. To promote positivity and ethical behavior in the schools, they can introduce an ethics course and even give students prizes for their ethical activities. The Board of Elwood Community Schools does not need to remarket to show how ethical they are. According to Virtue Theory, Smitherman did act ethically when she helped the student. The only thing they can do to market ethics in the Elwood Community would be to understand the difference between ethics and law and to help students understand that even though something is ethical, it may be illegal. If you do something ethical that is within the constraints of the law, then that should be noticed in the community. Smitherman may have got some backlash from bad publicity, but she remains to be someone who is overly caring for her community. This plan will promote productivity and ensure good ethics because it will combine all of the core values to produce ethical conduct in the Elwood Community. It conforms to the core values by monitoring the students’ and the teachers’ behavior and conduct in school and taking notice of unethical conduct before it becomes a problem. Finally, I believe that the action plan that I have put forth will promote ethical conduct in the community and will strongly monitor ethics in future events.

- Dominic Romano

References

Bibbs, Rebecca R., and Herald Bulletin. “Smitherman: Administrators Have Been Working on Strategies for Several Students.” Herald Bulletin, 24 Jan. 2019, www.heraldbulletin.com/news/local_news/smitherman-administrators-have-been-working-on-strategies-for-several-students/article_6a39e40a-ebe2-557d-967f-b0dd3e080841.html.

Cbs/ap. “Indiana School Chief Who Used Her Insurance to Help Sick Student Quits, Cites ‘Lapse in Judgment.’” CBS News, CBS Interactive, 4 Feb. 2019, www.cbsnews.com/news/casey-smitherman-elwood-indiana-school-superintendent-quits-after-using-her-insurance-to-help-sick-student/.

Helsel, Phil. “Indiana School Superintendent Resigns after Insurance Fraud Charges.” NBCNews.com, NBC Universal News Group, www.nbcnews.com/news/us-news/indiana-school-superintendent-charged-insurance-fraud-after-helping-sick-student-n966216.

Salazar, Heather. “The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business.” Date Accessed March 27, 2019. https://kodiak.wne.edu/d2l/le/content/58869/viewContent/841518/View?ou=58869

Salazar, Heather. “Kantian Business Ethics”. Date Accessed March 27, 2019. https://kodiak.wne.edu/d2l/le/content/58869/viewContent/841519/View

Steer, George. “Indiana Superintendent Arrested for Using Her Insurance to Help Sick Student.” Time, Time, 24 Jan. 2019, time.com/5511975/indiana-superintendent-health-insurance-sick-student/.

Wang, Amy B, et al. “A Superintendent Used Her Son's Insurance to Help a Sick Student. She Just Resigned.” The Washington Post, WP Company, 4 Feb. 2019, www.washingtonpost.com/education/2019/02/04/superintendent-used-her-sons-insurance-help-sick-student-she-just-lost-her-job/?noredirect=on&utm_term=.54f0b876df58.

Winsor, Morgan. “Superintendent Faces Fraud Charges after Claiming Student as Son at Doctor's Office.” ABC News, ABC News Network, 24 Jan. 2019, abcnews.go.com/US/superintendent-faces-fraud-charges-claiming-student-son-doctors/story? id=60590416.