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Maximizing Restitution for Erroneous Medical Payments When Auditing Samples from More Than One Provider

Author

Listed:
  • Karl W. Heiner

    (Department of Statistical, Management and Information Sciences, and Program in Operations Research and Statistics, Rensselaer Polytechnic Institute, Troy, New York 12181)

  • Michael Kupferschmid

    (Alan M. Voorhees Computing Center, and Program in Operations Research and Statistics, Rensselaer Polytechnic Institute, Troy, New York 12181)

  • J. G. Ecker

    (Department of Mathematics, and Program in Operations Research and Statistics, Rensselaer Polytechnic Institute, Troy, New York 12181)

Abstract

When auditing payments for medical services by a third party, estimates of payments erroneously made are frequently based on statistical samples. When such procedures are used by government agencies to audit Medicaid payments, hearing officers often base provider restitution on the lower end of an interval estimate, which is a function of sample size. Several methods are tested for maximizing the total restitution obtained from multiple audits subject to a constraint on the total cost of the auditing.

Suggested Citation

  • Karl W. Heiner & Michael Kupferschmid & J. G. Ecker, 1983. "Maximizing Restitution for Erroneous Medical Payments When Auditing Samples from More Than One Provider," Interfaces, INFORMS, vol. 13(5), pages 12-17, October.
    • Handle: RePEc:inm:orinte:v:13:y:1983:i:5:p:12-17
    DOI: 10.1287/inte.13.5.12
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