An auditor reviewed 25 oral surgery insurance claims from the particular surgical office, finding that the mean outofpocket patient billing above the reimbursed amount was $275.66 with the standard deviation of $78.11.
a) At the 5 percent level of significance, does this sample prove the violation of guideline that the average patient must pay no more than $250 outofpocket? State your hypotheses and decision rule.
b) Is this a close decision?
Hypotheses:

H0: _ = 250 vs. _ > 250

Level of Significance:

5%

Decision Rule

Reject the null hypothesis if pvalue < 0.05

Calculation:

Hypothesis Test: Mean vs. Hypothesized Value

Hypothesized value

250.0000

Mean Sample

275.6600

std. dev.

78.1100

std. error

15.6220

n

25

df

24

t

1.64

pvalue (onetailed, upper)

.0568
