Tier Based Pricing

The standard tier based pricing structure contains different tiers, such as Employee Only (E), Employee + Spouse (ES), Family (F), Employee + Children (EC). A main subscriber can subscribe his/her dependents to a policy plan and may fall in one of the tier. The fee for a price item can vary based on the membership tier level and employee attributes (such as employee type, employee status, etc.). Oracle Revenue Management and Billing enables you to offer a tier based pricing to a fully-insured group customer. In the Tier Based pricing, the premium for the membership is derived based on tier level and employee attributes.

A tier based pricing can be defined using the tier based pricing rule. You can define a tier based pricing rule for a price item on the policy plan. If the tier based pricing rule is defined for a price item on a policy plan, all memberships which belong to the policy plan will inherit the tier based pricing from the policy plan. If the system does not find any effective pricing rule for a price item on the policy plan, it inherits the effective pricing rule for the price item from the parent customer level.

You can define a tier based pricing rule using a tier based pricing rule type. It is the tier based pricing rule type which helps the system to determine:

• Business object using which the tier based pricing rule should be created in the system.

• Algorithm which should be triggered for deriving the account and price item for a membership.

  Note: You must create an algorithm using the C1_​ACCPRIMEM algorithm type and attach it to the Account and Price Item Derivation system event.

• Algorithm which should be triggered for deriving the bill period for a membership.

  Note: You must create an algorithm using the C1-BILLPDRV algorithm type and attach it to the Account and Price Item Derivation Post-Processing system event.

• Algorithm which should be triggered for creating the bill period timeline (based on the derived bill period) for a membership.

  Note: You must create an algorithm using the C1-BILLRPCR algorithm type and attach it to the Account and Price Item Derivation Post-Processing system event.

• Algorithm which should be triggered for deriving the subscription tier for membership, based on the bill period configured on the account..

  Note: You must create an algorithm using the C1-DERSUBTR algorithm type and attach it to the Account and Price Item Derivation Post-Processing system event.
• Algorithm which should be triggered for deriving the bill group, parent customer, and policy for a membership.

  Note: You must create an algorithm using the C1_​MEMBGDRV algorithm type and attach it to the Bill Group Derivation system event.

• Algorithm which should be triggered for calculating the premium for membership.

  Note: You must create an algorithm using the C1_​TIERPREM algorithm type and attach it to the Pricing Rule Premium Calculation system event.

• Algorithm which should be triggered for creating the SQI based billable charges for each membership and price item combination.

  Note: You must create an algorithm using the C1-FICRETBC algorithm type and attach it to the Pricing Rule Billable Charge Creation system event.

• Algorithm which should be triggered for calculating the proration factor and amount for fully insured tier based pricing rule based on the policy plan configurations.

  Note: You must create an algorithm using the C1-TIERPRFC algorithm type and attach it to the Pricing Rule Proration Amount Calculation system event.

• Algorithm which should be triggered for distributing the total premium in the non-skip months of the coverage period.

  Note: You must create an algorithm using the C1-SKPMNTHPC algorithm type and attach it to the Skip Month Premium Calculation (in case you want to use the 9/10 Billing feature) system event.

• Price items for which you can define tier based pricing rules using the tier based pricing rule type.

• Rate options that you can use while defining the pricing for the respective price item.

• Type of account to which the respective price item should be billed based on the specified priority.

• Rule type which indicates the rules that should be executed to determine whether the price item is eligible for billing.

• Audit event types of the C1-Membership business object using which the audit event should be created whenever a membership is added, updated, or removed from the policy plan.

• Elements of the C1-Membership business object for which audit event should be created.

  Note: You must ensure that either the Update All option is selected or the elements listed in the tier based pricing rule type are already present in the respective audit event type. Otherwise, erroneous results might occur.

Once a tier based pricing rule type is defined, you can define tier based pricing rules using the tier based pricing rule type. Note that, at present, you can define tier based pricing rules only through a health care inbound message and not from the user interface. However, you can view the tier based pricing rules defined for a policy plan from the Customer 360° Information screen. While creating a tier based pricing rule through a health care inbound message, you need to specify the following information:

• Entity type (i.e. Policy Plan) and entity ID (i.e. policy plan ID) for which you want to define the tier based pricing rule

• Start and end dates of the tier based pricing rule

• Tier based pricing rule type using which you want to create the tier based pricing rule

• Price Item for which you want to define tier based pricing

• Rate option using which the price assignment should be created for the tier based pricing rule

  Note: If the rate option is not given in the pricing rule data, by default, it is set to a value specified in the Default Rate Option - Flat option type of the C1-ASOBLLNG feature configuration when the modifier method is set to FLAT or NULL.

• Tier level and employee attributes for which the fee is applicable

  Note: The tier level and employee attributes can be defined as the parameters in the system. These parameters can then be used to define eligibility criteria in the tier based pricing. Here, you can use only those parameters where the parameter usage is set to Pricing Eligibility.

Once the tier based pricing rule is defined for a policy plan, the system creates a price item pricing and price list and then assigns the price item pricing to the price list.

Related Topics

Parent Topic: Fully-Insured Pricing