Question
1. From time to time, unfortunately, Healthy Life employees have to deal with insurance fraud. Say, some people claim medical services that have never been
1.From time to time, unfortunately, Healthy Life employees have to deal with insurance fraud. Say, some people claim medical services that have never been provided or money they never paid. To that end, Healthy Life hired a number of investigators whose functions are not much different from those of police detectives.
Doctor N.N. has been under suspicion for some time for deceiving and overcharging his patients.Healthy Life approached the provincial authorities and they agreed to launch a formal investigation and open a case given a credible evidence of fraud is provided. The Healthy Life investigation department found a number of offences.These included "up-coding" or "upgrading," which involved billing for more expensive treatments than those actually provided; providing and subsequently billing for treatments that were not medically necessary; scheduling extra visits for patients; referring patients to another physician when no further treatment was actually necessary; "phantom billing," or billing for services not rendered; and "ganging," or billing for services to family members or other individuals who were accompanying the patient but who had not personally received any services.
Marina Petrenko took part in this investigation. At one point, she was asked to compare the amount doctor N.N. charged for a certain medical procedure with the province average. Marina randomly selected a sample of forty Ontario physicians of the same qualification and specialty in order to compare their fees with ones of doctor N.N. (see the Major Assignment Data file). Can we conclude at 0.5% significance level that the population average is significantly below $600 that N.N. charged for this procedure? After carefully reviewing the data Marina and her manager decided that variability in the population did not change over the last years so they assumed that the population standard deviation is still about $175 as it had been several years ago. Therefore Marina decided to use z-distribution. Please help Marina to test the claim. Use Z.TEST dialog box. (Please note that the test returns the one-tailed right P-value).
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