Question: For our experiential learning application, you will use your knowledge of sampling to run the following scenario. A research study reviewed the differences between two

For our experiential learning application, you will use your knowledge of sampling to run the following scenario. A research study reviewed the differences between two methods for verifying self-funded medical claims. The two methods reviewed were 1) verifying 100% of claim exceptions or errors that were identified from all 54,000 claims and 2) a random sampling of 300-400 claims. The claims data was collected from two Fortune 100 corporations. The researchers found that the second random sample method missed many of the claim errors that were identified through the 100% of claims review with the first method. Some of the missed errors contained $200,000- $750,000 in claim dollar values. To catch all the claim errors is an important goal for self-funded plans for ensuring lower expenditures. The process goal can follow a Six Sigma methodology, which is a quality improvement process, that ultimately seeks to obtain 0 defects or errors. The researchers applied a five-step protocol for the claims review. The steps are: 1) All paid claims were loaded into a data warehouse. 2) Eligibility data and benefits (such as covered services, co-pays, administrative agreements, and rules) are reviewed. 3) Industry standards from Centers for Medicare and Medicaid Services (CMS) and others are used to detect exceptions. 4) The data is compared against best practices and administrative processes. 5) An on-site review is conducted for any claims identified for validation (Sillup and Klimberg, 2011).

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