Subscription Tier Pricing Parameter
Oracle Revenue Management and Billing enables you to use the subscription tier as a pricing parameter while defining the tier based pricing rules. This feature facilitates you to offer different rates for a price item based on different subscription tier.
On creating the bill period timelines, the system executes the Derive Subscription Tier for Membership (C1-DERSUBTR) algorithm attached to the Account and Price Item Derivation Post-Processing system event in the respective tier based pricing rule type. This algorithms determines the subscription tier of the membership for each bill period timeline. While determining the subscription tier for a membership, the system derives subscription tier for the membership from a subscription tier structure. Note that while deriving the subscription tier of a membership for a bill period timeline, the system refers the proration rules defined on the respective policy plan and accordingly derives the subscription tier for the membership. The system invokes the C1-DERSUBTR algorithm in the C1-REPC1 batch.
You can define a subscription tier structure through a characteristic on the policy plan. While defining a subscription tier structure for a policy plan, you must use the characteristic type specified in the Subscription Tier Structure Characteristic Type attribute of a member relationship and subscription tier preference. The system considers the member relationship and subscription tier preference which is specified in the Relation Structure Code Field Mapping option type of the C1-ASOBLLNG feature configuration.
A subscription tier structure helps the system to determine the subscription tier to which the membership belongs. You can specify a list of subscription tiers in a subscription tier structure. A subscription tier is derived for a membership depending on the following:
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Whether the member person is a self, spouse, or dependent
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Number of spouses, dependents, and young adults in the membership in the respective bill period timeline
A relationship matrix indicates whether a member person with a particular relationship type should be considered as self, spouse, or dependent while deriving the subscription tier. In a subscription tier structure, a spouse is never considered as a dependent. Only children are considered as dependents.
Let us understand this with the help of an example.
| Subscription Tier | Self | Number of Spouses | Number of Dependents | Number of Young Adults |
|---|---|---|---|---|
| E | 1 | 0 | 0 | 0 |
| ES | 1 | 1 | 0 | 0 |
| ESC1 | 1 | 1 | 1 | 0 |
| ESC2 | 1 | 1 | 2 | 0 |
| EC1 | 1 | 0 | 1 | 0 |
| EC2 | 1 | 0 | 2 | 0 |
| EC3 | 1 | 0 | 3 | 0 |
| F | 1 | 9 | 9 | 9 |
In addition, you can create a relationship matrix for a subscription tier. Let us understand this with the help of an example.
| Relation | Relationship Type | Relationship |
|---|---|---|
| Main Subscriber | Owner | Self |
| Main Subscriber | Member | Self |
| Children | Child | Dependent |
| Spouse | Wife | Spouse |
| Spouse | Spouse | Spouse |
Once the subscription tier structure is derived from the policy plan, the system determines the subscription tier of the membership for the bill period timeline. While determining the subscription tier of a membership for the bill period timeline, the system derives the following characteristic types from the respective attributes of the member relationship and subscription tier preference:
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Age Calculation Date Basis
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Max Age Limit for Max Dependent Count
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Max Number of Dependents Order Priority
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Maximum Number of Dependents
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New Born Gift Days
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New Born Gift Days Applicability
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Young Adult Max Age Limit
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Young Adult Max Age Limit Applicability
The system then derives these characteristics from the policy plan. Let us understand this with the help of an example.
| Member Start Date | Member End Date | Person Name | Main Subscriber | Relationship Type | Member | Date of Birth |
|---|---|---|---|---|---|---|
| 1-Jan-20 | 31-Dec-20 | Mark | Yes | Self | Yes | 15-Jan-68 |
| 1-Jan-20 | 31-Dec-20 | Nancy | No | Wife | Yes | 20-Apr-72 |
| 1-Jan-20 | 31-Dec-20 | Roger | No | Child | Yes | 15-May-01 |
| 1-Jan-20 | 31-Dec-20 | Tom | No | Child | Yes | 16-May-04 |
Now, if the following characteristics are defined on the policy plan:
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Subscription Tier Structure - STEX1
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Age Calculation Date Basis - Enrollment Date
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Maximum Number of Dependents - 3
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Max Number of Dependents Order Priority - ELDEST
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Max Age Limit for Max Dependent Count - 21
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New Born Gift Days - 30
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New Born Gift Days Applicability - Y
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Young Adult Max Age Limit - 25
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Young Adult Max Age Limit Applicability - Y
The system considers the STEX1 subscription tier structure and derives the subscription tier of the membership for each bill period timeline. Let us understand this with the help of an example.
| Bill Period Timeline | Characteristic Type | Characteristic Value |
|---|---|---|
| 1-Jan-20 to 31-Jan-20 | Subscription Tier | ESC2 |
| 1-Feb-20 to 29-Feb-20 | Subscription Tier | ESC2 |
| 1-Mar-20 to 31-Mar-20 | Subscription Tier | ESC2 |
| 1-Apr-20 to 30-Apr-20 | Subscription Tier | ESC2 |
| 1-May-20 to 31-May-20 | Subscription Tier | ESC2 |
| 1-Jun-20 to 30-Jun-20 | Subscription Tier | ESC2 |
| 1-Jul-20 to 31-Jul-20 | Subscription Tier | ESC2 |
| 1-Aug-20 to 31-Aug-20 | Subscription Tier | ESC2 |
| 1-Sep-20 to 30-Sep-20 | Subscription Tier | ESC2 |
| 1-Oct-20 to 31-Oct-20 | Subscription Tier | ESC2 |
| 1-Nov-20 to 30-Nov-20 | Subscription Tier | ESC2 |
| 1-Dec-20 to 31-Dec-20 | Subscription Tier | ESC2 |
Because the characteristic value is same across all bill period timelines, the system will create one subscription tier characteristic with the effective date as 01-Jan-2020. Now, assume if one more member person named Harry with the date of birth as 05-11-08 and relationship type as Child is added to the membership on 05-Mar-20, then the system derives the subscription tier of the membership for each bill period timeline. Let us understand this with the help of an example.
| Bill Period Timeline | Characteristic Type | Characteristic Value |
|---|---|---|
| 5-Mar-20 to 31-Mar-20 | Subscription Tier | F |
| 1-Apr-20 to 30-Apr-20 | Subscription Tier | F |
| 1-May-20 to 31-May-20 | Subscription Tier | F |
| 1-Jun-20 to 30-Jun-20 | Subscription Tier | F |
| 1-Jul-20 to 31-Jul-20 | Subscription Tier | F |
| 1-Aug-20 to 31-Aug-20 | Subscription Tier | F |
| 1-Sep-20 to 30-Sep-20 | Subscription Tier | F |
| 1-Oct-20 to 31-Oct-20 | Subscription Tier | F |
| 1-Nov-20 to 30-Nov-20 | Subscription Tier | F |
| 1-Dec-20 to 31-Dec-20 | Subscription Tier | F |
In this case, the system will have two subscription tier characteristics for the membership - one with the effective date as 01-Jan-2020 where the characteristic value is set to ESC2 and another with the effective date as 05-Mar-2020 where the characteristic value is set to F.
If a new born is added to the membership, the effective date of the new subscription tier characteristic is calculated considering the gift days if applicable. If a member person is end dated, the system derives the subscription tier of the membership once again. If the subscription tier for the membership is different, the system creates a new characteristic to store the subscription tier for the membership. The effective date of the new characteristic is set according to the proration rule defined for the termination event. If a member person is inactivated, the system derives the subscription tier of the membership once again. In this case, if the subscription tier for the membership is different, the system updates the existing subscription tier characteristic of the membership.
To use the subscription tier as a pricing parameter, you need to define the Subscription Tier parameter where:
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Value Type is to Adhoc
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Source Entity is set to Membership
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Source Type is set to Characteristic
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Source Type Code is set to a characteristic type which is specified in the Subscription Tier Characteristic Type attribute of the member relationship and subscription tier preference
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Parameter Usage is set to Price Item and Pricing Eligibility Criteria
Once the Subscription Tier parameter is defined, you need to associate the parameter with the price items for which you want to define different rates in a pricing rule using the parameter. This helps to define different base fee for a price item based on the subscription tier.
A new screen named Member Relationship/Subscription Tier Structure is introduced in this release. It enables you to add, edit, copy, and delete the member relationship and subscription tier structures.
Parent Topic: Health Insurance Business Management