SOLUTION: 9.64 An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining
that the mean out-of-pocket patient billing above the reimbursed amount wa
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Question 131419: 9.64 An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining
that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with a
standard deviation of $78.11. (a) At the 5 percent level of significance, does this sample prove a
violation of the guideline that the average patient should pay no more than $250 out-of-pocket?
State your hypotheses and decision rule. (b) Is this a close decision?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with a standard deviation of $78.11.
(a) At the 5 percent level of significance, does this sample prove a
violation of the guideline that the average patient should pay no more than $250 out-of-pocket?
State your hypotheses and decision rule.
------------
Ho: mu <= 250
Ha: mu > 250
t(275.66) = (275.66-250)/[78.11/sqrt(25)] = 25.66*5/78.11 = 1.64255...
p-value = P(1.64255< t < 10 and df=24) = 0.0567
Since p-value is greater than 5%, Fail to reject Ho.
------------------------------------
(b) Is this a close decision?
Very close.
================
Cheers,
Stan H.
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