Determination of Sample Size for Auditing Medical Insurance Claims

In the case of sample audit of the medical insurance claims, a complex as well as serious problem arises with the reality of the population characteristics of population error. The present study examines whether sample claims (those the auditors consider by nature or classification) is random or not. The paper puts forward that the sample size varies with respect to identification of different stages of audit by the Trainee, Processor, and Sr. Processor. For the first place that is, a sample audit by the Trainee, a firm's dependence on sample audit procedure should be taken into an utmost care. The study determines sample size econometrically through the application of the concept in Poisson distribution. Apart from these, the study suggests some ad-hoc population ranges and sample size against these ranges.