Minimum Premium Program

To keep up with the changing healthcare dynamics and reduce the rising cost of employer sponsored health plans, the Administrative Services Only (ASO) service providers are constantly thriving to develop innovative pricing models. The ASO service providers are at the forefront designing alternative funding arrangements by amalgamating fully-insured and self-funded plans to trade-off some of the disadvantages of traditional models. The alternative funding arrangements make the self-funded plans more viable to small and medium size employers who traditionally go for the fully-insured plans.

A minimum premium program (MPP) is a self-funded plan that is partly self-insured where an employer is responsible to pay for claims up to a certain level and the remaining is covered by the ASO service provider. A premium is charged to the employer by the ASO service provider for undertaking the risk, processing the claims and for providing all other administrative services.

The following terminologies are used with respect to the minimum premium program:

  • Minimum Premium - A premium which is paid for the minimum premium program by the employer to the ASO service provider.

  • Capping Limit (i.e. MPP Limit) - The claim amount within the MPP limit is paid by the employer; whereas the amount exceeding the MPP limit is paid by the ASO service provider.

  • Minimum Attachment Point (MAP) - This is a guaranteed claim liability by an employer to safeguard the insurer from the financial risk if the enrollment is drastically declines.

  • Effective MPP Limit - The MPP limit and MAP value whichever is greater is considered as the effective MPP limit.

Oracle Revenue Management and Billing provides the ability to setup the minimum premium program pricing model. You can define a minimum premium program pricing rule at the parent customer and bill group levels. You can define minimum premium program pricing rules for parent customers and bill groups from the Customer 360° Information screen. You can define a minimum premium program pricing rule using a minimum premium program pricing rule type.

Note: You cannot create a minimum premium program pricing rule type and a minimum premium program pricing rule through an inbound message.

A minimum premium program pricing rule type is not a primary pricing rule type. You must include a minimum premium program pricing rule type as a related pricing rule type in the claim or ancillary pricing rule types which are used for calculating the claim amount or ancillary charges, respectively.

While creating a minimum premium program pricing rule type, you need to do the following:

  • Set the pricing rule type business object to Minimum Premium Program Pricing Rule Type

  • Set the pricing rule type category to Minimum Premium Program

  • Set the pricing rule business object to Minimum Premium Program Pricing Rule

  • Specify algorithms for the following system events:

    System Event Algorithm
    Accumulation Pre-Processing C1-MPPACPREP
    Account and Price Item Derivation C1_​ACCPRISL
    Bill After Date Determination C1_​BAFTDRV
    Bill Group Derivation C1_​TXNBGDRV
    Final Settlement Derivation C1-FSBCDV

  • Specify the price items (i.e. services related to minimum premium program) for which you want to define pricing using a minimum premium program pricing rule

  • Specify the rate options that you can use while defining pricing for a price item

  • Specify different types of accounts to which the price item should be billed based on the priority

    Note: Ideally, the price item parameters should not be specified in a minimum premium program pricing rule type. The price item parameters which are specified in the claim or ancillary pricing rule type are used for minimum premium program accumulation.

  • Specify additional information, such as:

    • Pricing rule type and price item to derive the pricing rule using which the enrollment based MPP limit is calculated

      Note: At present, we are not supporting flat MPP limit for the minimum premium program pricing model.

    • Off process request type using which the deficit should be roll forwarded during the policy renewal

    • MPP, surplus, and deficit billable charge line types using which you want to create the respective charges

    • Number of days before which you want to create a To Do for reminding the self-funded employer to renew the minimum premium program

  • Specify the details for the minimum attachment point arrangement:

    • Pricing rule type and price item using which the minimum attachment point pricing rule should be created

    • Specify default values for the following:

      • Minimum Attachment Point Arrangement Type - Used to specify the method using which minimum attachment point should be calculated. The system supports the following methods:

        • Enrollment Percentage of First Month - Here, the minimum attachment point is calculated using the enrollment based percentage of the first month's MPP limit. For example, If the enrollment based percentage of the first month's MPP limit is set to 75, the system sets the minimum attachment point to (75*First Month's MPP Limit)/100.

        • Enrollment Percentage of Previous Month - Here, the minimum attachment point is calculated using the enrollment based percentage of the previous month's MPP limit. For example, If the enrollment based percentage of the previous month's MPP limit is set to 90, the system sets the minimum attachment point to (90*Previous Month's MPP Limit)/100.

        • Flat Amount - Here, the minimum attachment point is set to a flat amount.

      • Default Arrangement Value - Used to specify default percentage or flat amount for minimum attachment point. You can change the value (if required) while defining a minimum premium program pricing rule using the respective pricing rule type.

  • Specify settlement rules, such:

    • How to settle any deficit or surplus when the customer decides to cancel or renew the policy

    • Whether the system should close out or roll forward the deficit or surplus on policy renewal

    • Whether the system should close out the deficit or surplus on policy cancelation

Once a minimum premium program pricing rule type is defined, you can create minimum premium program pricing rules using the minimum premium program pricing rule type. While defining a minimum premium program pricing rule for a parent customer, you need to specify the following:

  • Minimum premium program accumulation price item for which you want to define the pricing

  • Specific stop-loss pricing rule of the parent customer whose accumulation parameters you want to inherit for the minimum premium program. On selecting a specific stop-loss pricing rule, the minimum premium program pricing date range is set automatically. The minimum premium program pricing date range is same as the specific stop-loss pricing rule.

  • Rate option that you want to use while defining the minimum premium program pricing

  • Settlement frequency which helps to determine the bill after date. The valid values are:

    • Immediately - If you select this option from the list, the bill after date is not calculated. The minimum premium program settlement billable charge is billed immediately in the next bill cycle.

    • Manually (At Required Intervals) - If you select this option from the list, the bill after date which is specified in the Manual Settlement Bill After Date parameter while executing the C1-BCMPP batch is stamped on the minimum premium program settlement billable charge.

    • Monthly - If you select this option from the list, the bill after date is set as per the bill cycle.

    • Yearly - If you select this option from the list, the bill after date is set to the pricing end date in the minimum premium program settlement billable charge.

    • On Settlement - If you select this option from the list, the bill after date is set to the settlement date in the minimum premium program settlement billable charge.

    Note: The accumulation parameters, such as incurred start date, incurred end date, paid start date, paid end date, and settlement days are automatically inherited from the parent customer's specific stop-loss pricing rule. You cannot change any accumulation parameter except the settlement days.

  • Settlement days which helps to calculate the settlement date (which is pricing end date, incurred end date, or paid end date whichever is later + the settlement days)

  • Settlement account for which the minimum premium program settlement billable charge should be created

  • Minimum premium attachment point and its value using which the effective MPP limit is calculated

  • Whether the customer would like to renew or cancel the minimum premium program

However, while defining a minimum premium program pricing rule for a bill group, you need to specify the following:

  • The policy status in which the minimum premium program pricing rule is applicable.

  • Minimum premium program accumulation price item for which you want to define the pricing

  • Parent customer's minimum premium program pricing rule from which you want to inherit the accumulation parameters.

    Note: The pricing date range is derived from the parent customer's minimum premium program pricing rule because the minimum premium program pricing rules of parent customer and bill group should have the same date range.

  • Rate option that you want to use while defining the minimum premium program pricing

  • Accumulation criteria that indicates the price items whose charges can be accumulated against the minimum premium program accumulation price item so that it can be settled against the minimum premium program premium.

  • Whether the line items and markup or markdown in a particular claim pricing rule should be accumulated for minimum premium program.

    OR

    Whether the line items which are associated with the Minimum Premium Program pricing rule type category should be accumulated for minimum premium program.

  • Whether the charges created using the billable charge line types in a particular ancillary pricing rule should be accumulated for minimum premium program.

    OR

    Whether the charges created using the billable charge line types where the Pricing Rule Type Category characteristic is set to Ancillary should be accumulated for minimum premium program.

  • Whether the charges calculated using the retention type claim based or retention type enrollment based pricing for a price item should be accumulated for minimum premium program.

Once a minimum premium program pricing rule is defined for a bill group, the system creates a price assignment in a price list and assigns the price list to the bill group.

You must create an algorithm using the C1-ASOEXPOS algorithm type and attach it to the TFM - Rate Post-Processing algorithm spot of the division to which the bill group's account belongs. Otherwise, erroneous results might occur. For more information about the algorithm, refer to the application.

The following new batches are introduced in this release:

  • C1-ACMPP - This batch is used to accumulate the minimum premium program billable charges which are to be settled against the minimum premium program premium. It creates an accumulation record for an active accumulation group of an account whose bill cycle window is open. It calculates the following:

    • Minimum Attachment Point

    • MPP Limit (Enrollment X MPP Limit Rate)

    • Effective MPP Limit

    • Cumulative MPP Limit

    • Claims

    • Specific Stop Loss (Credit)/Debit Adjustments

    • Net Claims

    • Cumulative Net Claims

    • Max Claim Liability (Monthly Billed Claim)

    • Cumulative Billed Claims

    • Minimum Premium Adjustment Amount

    • Cumulative Surplus/Deficit

    • Roll Forward Charge

    This batch also invokes algorithms which are attached to the Accumulation Pre-Processing and Accumulation Post-Processing system events in the respective pricing rule type and accordingly updates the accumulation record.

  • C1-BCMPP - This batch is used to create a billable charge for a minimum premium program accumulation records. The charge contains the minimum premium adjustment amount which is calculated by the C1-ACMPP batch. This batch also creates the roll forward billable charge on the successive pricing rule, if applicable, based on the settlement configuration. It calculates and stamps the bill after date on the minimum premium program settlement billable charge.

    This batch also invokes algorithms which are attached to the Accumulation Billable Charge Pre-Processing and Accumulation Billable Charge Post-Processing system events in the respective pricing rule type and accordingly updates the minimum premium program settlement billable charge.

  • C1-CMMPP - This batch is used to do the following:

    • Update the MPP billable charge ID on the respective transaction legs in the CI_​TXN_​DTL_​PRITM table

    • Mark the transaction as COMP if it is in IGNR status in the CI_​TXN_​DETAIL table

    • Update the transaction aggregation criteria of the corresponding records in the CI_​TXN_​CALC table to RITA

You can opt to configure approval workflow for a minimum premium program pricing rule. The C1PRRLMPPN approval workflow group is shipped for the minimum premium program pricing rules. You need to create an appropriate approval workflow chain, approval workflow criterion type, approval workflow group chain linkage, and approval workflow settings for the C1PRRLMPPN approval workflow group. Once the approval workflow configuration is done, ensure that C1PRRLMPPN is specified in the Approval Workflow Group for MPP option type of the C1-ASOBLLNG feature configuration.