# SOLUTION: 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

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 Click here to see ALL problems on Probability-and-statistics Question 189500: 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(57424)   (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? Ho: u = 250 Ha: u is not equal to 250 --- Test statistic: t(275.66) = 25.66/[78.11/sqrt(25)] = 1.6426 p-value = P(t > 1.6426 with df=24) = 0.05675 Conclusion: Since the p-value is greater than 5%, fail to reject Ho. ---------------------------------------------------------------------- State your hypotheses and decision rule. (b) Is this a close decision? Pretty close. ============================================= Cheers, Stan H.