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Johnson Medical Services (JMS) processes and pays medical claims for insurance providers in a fourteen-state area. Claims are screened for correctness at seventy-two collection centres,
Johnson Medical Services (JMS) processes and pays medical claims for insurance providers in a fourteen-state area. Claims are screened for correctness at seventy-two collection centres, corrected by direct contact with the claimant, and then sent to the accounting division for payment. One or more errors of any kind in the claim identified in accounting requires the claim to be returned to the claimant at significant cost to JMS and inconvenience to the claimant. JMS management is dissatisfied with the current costs of erroneous claims and the level of expressed customer satisfaction with returned claims. JMS has awarded a contract to a management consulting firm to conduct an analysis of the situation and determine how many erroneous claims are slipping through the collection centre screening. The assigned project manager believes that collecting data on all errors from all collection centres will require time and money that far exceeds the available budget. She contacts a statistician who advises h
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