Question 280455
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. 
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Ho: u <= 250
Ha: u > 250
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t(275.66) = (275.66-250)/[78.11/sqrt(25)] = 1.6426
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p-value = P(t > 1.6426 with df=24) = 0.0568
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Conclusion: Since the p-value is greater than 5%, fail
to reject Ho; the guidelines are being met.
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(b) Is this a close decision?
Yes, very close (see how close the p-value is to 5%)
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Cheers,
Stan H.
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