A Statistical Method for Monitoring a Change in the Rate of Nonacceptable Inpatient Claims

Marjorie Rosenberg

North American Actuarial Journal, 2001, vol. 5, issue 4, 74-83

Abstract: This paper is an extension of earlier work (Rosenberg 1998; Rosenberg, Andrews, and Lenk 1999; Rosenberg and Griffith 2000) that introduced a statistical control model to supplement current efforts inexpensively to help reduce unnecessary expenditures. The application of the study was to predict the rate of nonacceptable inpatient claims (NACs). In that work, a statistical model was proposed to link information obtained through an expensive audit with inexpensive information that is readily available to estimate the probability that a claim is a NAC. The premise was that a statistical system can be developed to supplement the expensive audit for additional control between audits.Estimates of the NAC rate obtained from the statistical model are used as input in a statistical monitor to assess whether the NAC rate had changed over time. The statistical monitor is the subject of this paper. The idea is that subgroups of claims can be analyzed inexpensively with the statistical monitor to determine whether any current intervention is required prior to the time of the next scheduled audit, or whether adjustments are needed in the determination of claims to be sampled for the audit. In this study, the estimate for the NAC rate at t0 is compared against the estimate of the NAC rate at some later time t1. A decision rule is proposed to assess whether a change in the NAC rate has occurred for that subgroup. The methodology is also applicable to other health care measurements.

Date: 2001
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DOI: 10.1080/10920277.2001.10596019

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