Sue Kolb has been associated with the Valley View Hospital in Highlands Ranch, a small town in Colorado. Sue is a CPA licensed in Colorado and handles the hospital’s financial affairs; eventually, she climbed the ladder to CFO after 10 years in the accounting department. In 2012, Valley View’s Board of Trustees hired Denverbased Bronco Resources, Inc. to manage the hospital’s operations. Bronco, formerly a division of Hospital Corporation of America (HCA), claimed that they could maximize the federal government’s reimbursement for hospital expenses. Kolb found out that Bronco was using a secret accounting system devised by HCA to cheat the government out of Medicare payments. Bronco, and similar companies around the country, had been keeping two sets of accounting records for reporting the healthcare costs of Medicare patients. One set inflated the costs that were charged to the federal government The other set, for internal use, listed the actual costs of hospital operations. Kolb questioned the company’s accounting methods and threatened not to go along with the fraud. She was told by the CEO that she would be fired if she followed through on the threat.

Questions

1. Who are the stakeholders in this case, and what are their interests?

2. What are Kolb’s ethical obligations with respect to the Medicare fraud and her reporting it within Valley View under the AICPA Code of Professional Conduct? 3. What would you do at this point if you were Sue Kolb, and why?

Answer rating: 100% (QA)

1Stakeholders are all individuals groups of people organizations or institutions that are interested in the activities of an organisation They are affected by the activities of that organisation and i... View the full answer