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Maximizing Restitution for Erroneous Medical Payments When Auditing Samples

Author

Listed:
  • Karl W. Heiner

    (School of Management, Rensselaer Polytechnic Institute, Troy, New York 12181)

  • Owen Whitby

    (SwissRe Holding (N.A.) Inc., New York, New York 10017)

Abstract

In auditing of paid Medicaid claims, estimates of payments erroneously paid to providers are frequently based on statistical samples. When such procedures are used, hearing officers are often inclined to use the lower end of an interval estimate to determine restitution by a provider. In this paper, the advantages of estimating from large samples are weighed against the larger costs involved. A procedure for choosing a sample size that would maximize net recovery is proposed.

Suggested Citation

  • Karl W. Heiner & Owen Whitby, 1980. "Maximizing Restitution for Erroneous Medical Payments When Auditing Samples," Interfaces, INFORMS, vol. 10(4), pages 46-54, August.
    • Handle: RePEc:inm:orinte:v:10:y:1980:i:4:p:46-54
    DOI: 10.1287/inte.10.4.46
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    Keywords

    statistics: sampling; health care;

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