A stratified sampling plan to audit health insurance claims is offered. The
stratification is by dollar amount of the claim. The plan is representative in
the sense that with high probability for each stratum, the difference in the
average dollar amount of the claim in the sample and the average dollar amount
in the population, is ``small.'' Several notions of ``small'' are presented.
The plan then yields a relatively small total sample size with the property
that the overall average dollar amount in the sample is close to the average
dollar amount in the population. Three different estimators and corresponding
lower confidence bounds for over (under) payments are studied.Comment: Published at http://dx.doi.org/10.1214/074921707000000094 in the IMS
Lecture Notes Monograph Series
(http://www.imstat.org/publications/lecnotes.htm) by the Institute of
Mathematical Statistics (http://www.imstat.org