Predicting Paid Amount For Claims Data

Introduction The context is the 2016 public use NH medical claims files obtained from NH CHIS (Comprehensive Health Care Information System). The dataset contains Commercial Insurance claims, and a small fraction of Medicaid and Medicare payments for dually eligible people. The primary purpose of this assignment is to test machine learning (ML) skills in a real case analysis setting. You are expected to clean and process data and then apply various ML techniques like Linear and no linear models like regularized regression, MARS, and Partitioning methods. You are expected to use at least two of R, Python and JMP software. Data details: Medical claims file for 2016 contains ~17 millions rows and ~60 columns of data, containing ~6.5 million individual medical claims. These claims are all commercial claims that were filed by healthcare providers in 2016 in the state of NH. These claims were ~88% for residents of NH and the remaining for out of state visitors who sought care in NH. Each claim consists of one or more line items, each indicating a procedure done during the doctor’s visit. Two columns indicating Billed amount and the Paid amount for the care provided, are of primary interest. The main objective is to predict “Paid amount per procedure” by mapping a plethora of features available in the dataset. It is also an expectation that you would create new features using the existing ones or external data sources. Objectives: Step 1: Take a random sample of 1 million unique claims, such that all line items related to each claim are included in the sample. This will result in a little less than 3 million rows of data. Step 2: Clean up the data, understand the distributions, and create new features if necessary. Step 3: Run predictive models using validation method of your choice. Step 4: Write a descriptive report (less than 10 pages) describing the process and your findings.