Tuesday, April 2, 2019

Elwood School District: Superintendent Health Insurance Fraud (2019)


Smitherman's school photo beside her 2019 mugshot
            In January 2019, a superintendent in Elwood, Indiana noticed a student’s repeated absences and took matters into her own hands. Casey Smitherman took the fifteen-year-old boy to an urgent care center under her son’s name so he could receive treatment using her insurance. When the boy returned to school, he confided in another teacher about the situation, causing word to spread and forcing Casey to turn herself in to the police and quit her job. An Individualist would not agree with her deceitful acts because she made a choice for someone else, took away the boy’s free will to decide what is best for him, and she violated laws. A Utilitarian perspective would also look down upon her choices because she maximized the boy’s happiness at first by offering him a solution, but the fact that the solution involved fraud caused more unrest than happiness in the long term. A Kantian values free choice, if all actions would be permissible by the stakeholders if they were informed, it is considered acceptable. A virtue theorist would agree with her decision because, although she had a lapse in judgement, the choice was made with good intentions and it portrayed her virtuous nature. The former superintendent was historically a hardworking member of the community, and she was honest in the end despite losing her job and reputation. Unfortunately, this was a case of a woman who thought she was ethical in helping a child who couldn’t help himself, but it landed her mugshot all over the news and internet for the world to see. The school district should make sure future employees feel comfortable pointing out any student who may need special attention without fear of the child being placed in the foster care system. 


School faculty members are carefully selected and have to undergo background checks to be sure they are stable, rational, and will present themselves as good role models for impressionable young minds. Casey Smitherman, of Indiana, was one of these trusted adults employed by the Elwood school district as the Superintendent. However, that title was soiled when she was arrested in January 2019 for attempting to obtain medical care for a sick student using her own insurance. Smitherman knew some of her students come from low income families that could not afford health insurance policies and regular doctor’s visits. So, when she noticed one of these students missed school for a few consecutive days, she went to his house, found out he was suffering from a severe sore throat, and attempted to get him help at an urgent care center. Casey told the fifteen-year-old to use her son’s name so his visit would be covered under her insurance policy. This worked and she was able to pick up a prescription for Amoxicillin to treat the student’s condition.
She brought the fifteen year old to an urgent care center in Indiana

After returning to school, the fifteen-year-old boy confided in another teacher about the incident, and word began to spread about the superintendent’s questionable judgment in the situation. Smitherman knew her actions were fraudulent and illegal, and that she would face punishments at work due to her significant role as superintendent.  Despite this, she voluntarily turned herself in to the Elwood Police Department on January 17 and resigned from her position with the district. After the story broke, she indicated that this was not the first instance of her helping this particular student. She had purchased clothes, food, and even cleaned his house before because she knew his home life was not stable and wanted to ensure the boy was living in safe conditions. Court records point out that Smitherman did not report the conditions of the child’s home life to the Department of Child and Family Services because she was afraid the student would get placed in foster care.

 She was apologetic and indicated that she thought she was doing the right thing because she did not think the student had any other options. It was reported that the family of the fifteen-year-old boy was not happy that the woman assisted him without consulting his parents, and they were prepared to take legal action against her. During the trial, other options Smitherman neglected to explore were brought up. Community members and relatives of the boy indicated that the Elwood District has access to health clinics and doctors through the schools. The consensus of the trial was to place the ex-superintendent into a diversion program, meaning charges will be dropped if she avoids arrest for an entire year. The school board appreciated her taking initiative to help the student and her kindness did not go unnoticed, but, as the following ethical theories will demonstrate, this type of fraud could not go unpunished. Although it was made with good intentions, her decision turned out to have many negative consequences, something Smitherman did not consider when she made the impulsive choice. 

The stakeholders directly affected by this case are the fifteen-year-old boy (name undisclosed), his parents who were unaware of or indifferent to his condition, and Casey Smitherman, the respected superintendent whose mistake ended her career. The current faculty and staff of Elwood schools were affected because they lost the leader of the school system and were faced with a close-to-home ethical dilemma. Finally, the public who would consider attending or sending their children to Elwood schools are stakeholders. This type of controversy ended up in news stories and articles across the country, tarnishing Elwood’s reputation. Many parents may think twice now before trusting the district with their child’s safety in the future. 


This tweet was published on January 23,
          the day Smitherman turned herself in
Individualism is an ethical theory coined by Milton Friedman, and its highest values lie the acknowledgment of every individual’s right to make his own decisions. It asserts that no person has the right to make other’s choices, and we should all respect this innate right so each person can live his life the way he wants to. Individualists believe that laws are created and agreed upon by the entire society, therefore following them prevents members of society from making decisions that could harm the greater good. An Individualist would consider Casey Smitherman’s choice wrong because she lied and made the teenage boy lie as well. She did not allow him his inherent right to choose what would be best for him. Additionally, she knowingly took advantage of her insurance company. According to the National Health Care Anti-Fraud Association, “Health care fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits or coverage… health care fraud increases the cost of providing insurance benefits to employees and, in turn, increases the overall cost of doing business” (nhcaa.org, 2019). This statement reflects the magnitude of consequences all people will be faced with if insurance fraud becomes widespread. If many people commit this type of offense, (which does happen because it is easy to do and not all people have a solid code of ethics) it could harm health care availability for all. Her decision had good intentions, but any Individualist would disagree with her choice to violate the law and take away the teenager’s freedom of choice.


Utilitarianism, started by Jeremy Bentham and popularized by John Stewart Mill, attempts to maximize happiness for oneself and others. This theory emphasizes making decisions that will benefit all stakeholders in the short and long term. Typically, a Utilitarian will weigh the costs and benefits of various actions and principles for all beings who will be affected by the actions, rather than just for his impact on one individual or company (Salazar, 19). In this case of health insurance fraud, the victim’s happiness was granted at first, but he clearly faced internal dissonance, resulting in his disclosure of the incident to another staff member. Smitherman’s happiness was also justified initially. She acted as a hero. She helped a student when nobody else noticed or cared to. However, the long-term effects of her seemingly good decision reveal that she could not sustain long term happiness for all stakeholders. Although the boy recovered from his physical illness, he found himself involved in a lawsuit, his parents were outraged by the deceitful acts, and, although it was not his fault, his superintendent who had helped him on multiple occasions had been fired. Smitherman’s actions in no way maximized her long-term happiness. She found herself without a job, on probation, and scorned by a large part of her community. A Utilitarian would note that Smitherman did not weigh the costs and benefits of the situation; or, if she did, she ignored the costs because she was aware of the dishonesty of her actions at the time.


Portrait of Immanuel Kant 
Kantianism values rational decision making, individual’s right to autonomy, and honesty and freedom for all (Salazar, 20). This theory emphasizes that it is wrong to use other people to one’s own advantage, and all actions should follow the formula of humanity. The formula of humanity states that no person should use another as a means to an end. Simply put, one should not manipulate others for his own wants. Although she directed her altruistic intentions toward another person, she used herself and her insurance company as a means to an end. “Treating someone as a mere means uses them or exploits them. It disregards their rationality and freedom and usually, it involves an attempt to manipulate them” (Salazar, 22). Kantianism argues that people should make choices based on goodwill and actions should have good intentions behind them. In this sense, “good” means the action does not exploit any other person or group. Kantians believe that if all components of an action would be permissible by all stakeholders that action effects, then it is a “good” choice. Smitherman did not provide the student with a fair chance to make his own decision. She acted irrationally because she did not consider other options like contacting the school medical professionals or the student’s parents. As previously stated, insurance fraud cases make it difficult for people to acquire healthcare and causes increased premiums, and Smitherman’s choice contributed to this. She used herself because she knew she could do something to help, and it gave her a sense of relief because she was able to alleviate another person’s illness. However, regardless of the origin of her intentions, a Kantian would disprove of her actions because she took the boy’s decision away, and if every stakeholder knew what was happening at the time, they would not have approved of it.


Virtue theory focuses on a person’s overall character. It values character traits that contribute positively to society and states that all decisions should be made with virtues in mind. The goal behind virtue theory is for the person to fulfill their purpose and maintain a positive overall character. An individual is considered virtuous if his actions are courageous, just, temperate, compassionate and honest. Conversely, the opposites of these traits are considered vices, such as selfishness, narcissism, greed, and dishonesty. Vices prevent people from fulfilling their purpose. Virtue theorists believe if people succumb to vice, they will be unable to maintain balance in their lives. Virtue theory focuses solely on the individual’s personality and capacity to do things with good reason, and Casey Smitherman’s decision to help a sick student was absolutely a virtuous one. This woman was courageous in the face of a difficult decision. She knew she was acting outside the boundaries of her position, helping this student at home, driving him around and suggesting he lie to medical professionals. Smitherman acted out of an abundance of compassion, helping the boy privately to avoid involving his family in a Department of Child and Family Services investigation. Finally, although she made a dishonest choice, she was historically an honorable member of the community. Admitting her mistake and accepting her punishment is evidence of her virtuous nature.


As a current business ethics student, I have been exposed to several controversial ethical dilemmas, but this one stood out to me the most. Casey Smitherman neglected to seek alternatives that would perhaps have been more ethical, however, her decision and actions were motivated with pure intentions and by goodwill. As the superintendent of the school district, Smitherman was a well venerated member of the community. She started as an English teacher and this allowed her to share her light with many students throughout her career. As the virtue theory analysis stated, Casey acted courageously and honestly in the end, which reflects who she is as a person regardless of the incident.  Her need to take action led her to make a decision that she knew was wrong, but she believed the student’s well-being was more important than the potential consequences she would face. There are not many teachers, much less superintendents, who would go as far as purchasing clothes, food, and cleaning one of their student’s houses. I tend to lean more towards the virtue theory when analyzing how I feel about other’s actions because I believe people’s entire make-up is more important than their mistakes. Everyone is human and may succumb to decisions that seem right in the moment without weighing possible consequences. Mistakes are part of life and embracing them is how we learn and grow into our highest self. Smitherman’s illustrious past and the way she handled the controversy show that she is a virtuous person who made a mistake and learned from it. This woman is an honorable, affable person in my opinion, and I believe her probation sentence was an appropriate punishment.

The disputable action in this case lies in the fraudulent act of an individual using her own health insurance to obtain medical care and a prescription for a student and convincing the fifteen-year-old to lie about his identity. His illness was treated, but word got out and the offender knew she would be better off turning herself in than waiting for the police to arrest her. Parents around the community and those of the victim were outraged with her dishonesty, neglect to contact any of the teen’s emergency contacts, and her failure to utilize the school system’s available medical care. Elwood’s current mission statement emphasizes providing students with an “education in a safe, supportive, and stimulating environment which will enhance the student’s intellectual, social, emotional and physical development. Parents, school personnel and community members cooperatively accept the responsibility for helping students to maximize their potential” (Elwood Community School Corporation, 2017). This broad mission statement includes an emphasis on student’s safety, but an open-door policy for staff and students to voice their concerns should be included. Perhaps the school could add something such as, “All faculty members and students are encouraged to express their comments, worries, or concerns about school operations, personal problems, or troubles regarding other students. The principal, vice principal, and counselors have an open-door policy and a confidentiality agreement that applies to students and staff so everyone can feel secure voicing their concerns, all in an effort to make the school a better, more prosperous place for all.” Some core values any school should include are safety, a positive learning environment that emphasizes fairness, active participation, a challenging yet insightful curriculum, and finally, relationships between faculty, students, and their families. In order to prevent a similar controversy from occurring again, the mission statement should be edited to include the open-door policy and made public. Smitherman’s motivation to lie was that she felt it was her only option, and she feared the boy’s home conditions would draw Child Service’s attention. With this new policy, the school will refocus itself on the success and safety of its students.

In the future, the school district should include a section of the interview process in which the potential employee is faced with a few hypothetical, yet realistic controversial cases and the interviewer can analyze their insights to get a better idea of how they would perform in a questionable situation. The school could release their renewed mission statement over the summer and into the beginning of the school year and assure the public that the incident was taken care of and it will not happen again because they are prepared to help any student who needs it.  This plan will promote a safe and welcoming environment within the school and will encourage students’ interest in learning and participating. When students and employees feel like their needs are being met and listened to, they will have a higher drive to succeed, and the school will be a prosperous public good that will benefit everyone who gets to experience it. 

By Meredith Dyckman


Allison, Henry E. “The Formula of Humanity (FH).” Oxford Scholarship, Oxford University Press, 6 Nov. 2014, www.oxfordscholarship.com/view/10.1093/acprof:oso/9780199691531.001.0001/acprof-9780199691531-chapter-9.

CNN Newsource. “School Superintendent Charged with Fraud after Using Her Insurance to Help Sick Student.” KEYE, 25 Jan. 2019, cbsaustin.com/news/nation-world/school-superintendent-charged-with-fraud-after-using-her-insurance-to-help-sick-student.

“Indiana School Superintendent Resigns after Insurance Fraud Charges.” NBCNews.com, NBCUniversal News Group, 2 Feb. 2019, www.nbcnews.com/news/us-news/indiana-school-superintendent-charged-insurance-fraud-after-helping-sick-student-n966216.

Johnson, Robert, and Adam Cureton. “Kant's Moral Philosophy.” Stanford Encyclopedia of Philosophy, Stanford University, 7 July 2016, plato.stanford.edu/entries/kant-moral/.
“MISSION AND VISION STATEMENT.” Mission and Vision Statement, Elwood Community School Corporation, 2017, www.elwood.k12.in.us/24-elwood-elementary-school-web-pages/elem-information/22-mission-and-vision-statement.
News, ABC, director. Superintendent Charged after Lying to Get Care for a Sick Student. YouTube, YouTube, 24 Jan. 2019, www.youtube.com/watch?v=JIcS_QOAhtU.

Salazar, Heather. “The Business Ethics Case Manuel: The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business,” Date Accessed: 28 March 2019
“The Challenge of Health Care Fraud.” The National Healthcare Antifraud Association, www.nhcaa.org/resources/health-care-anti-fraud-resources/the-challenge-of-health-care-fraud.aspx.
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=.7baa87b68e2d.
Van Wyk, Rich. “Family Says Elwood Superintendent Crossed the Line with Teenage Boy.” 13 WTHR Indianapolis, 15 Jan. 2019, www.wthr.com/article/family-says-elwood-superintendent-crossed-line-teenage-boy.

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