SOLUTION: An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient biling above the reimbursed amount was $275.
Algebra.Com
Question 141594: An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient biling 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 hypothesis 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 biling 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 hypothesis and decision rule.
Ho: u <= 250
Ha: u > 250
---------------
test statistic: t(275.66) = (275.66-250)/[78.11/sqrt(45)] = 1.64256...
p-value: P(1.64256 < t < 10, with df=24) = 0.05676
------------
Conclusion: Since p-value is greater than 5%, fail to reject Ho.
---------------------
(b) Is this a close decision?
Yes, it is a rather close decision.
-----------
Cheers,
Stan H.
RELATED QUESTIONS
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)
9.64 An auditor reviewed 25 oral surgery insurance claims from a particular surgical... (answered by stanbon)
Not sure about this!
An auditor reviewed 25 oral surgery insurance claims from a... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office,... (answered by stanbon)