The U.S. government authorizes private contractors to audit bills paid by Medica

Question

The U.S. government authorizes private contractors to audit bills paid by Medicare and Medicaid. The contractor audits a random sample of paid claims and judges each claim to be either fully justified or an overpayment. One of the authors of your textbook served as a statistical consultant in connection with one audit. We cannot share the health care provider for reasons of confidentiality, but the results of the audit are detailed here. First, claims were categorized as either small or medium claims, then a simple random sample of 30 claims was selected from each group. Fourteen of the small claims and eight of the medium claims were determined to be over-payments. We will use these data to answer the question "Does the probability that a claim is judged to be an overpayment depend on the size of the claim?"

Explanation / Answer

D option

When we talk about proportion we always divide to see the relative

So,

(14/30)/(8/30) = 14/8

1.75

D is correct

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