SECTION 1. Notwithstanding any law or regulation to the contrary, the division of insurance shall conduct a study on the adequacy of reserves for both payers and providers. The study shall include the following: (1) current reserves held by payers, (2) current reserves held by providers, (3) a formula to calculate the minimum necessary reserves for payers based on their levels of risk, (4) a formula to calculate the minimum necessary reserves for providers based on their levels of risk, (5) a threshold of excess reserves, and (6) a methodology to calculate an appropriate transfer of reserves from payers to providers as providers take on increasing amounts of downside risk from payers. Minimum necessary reserves shall mean the amount of reserves required for a payer or provider to be fiscally solvent. The threshold of excess reserves shall represent an amount beyond what a payer or provider should reasonably hold above the necessary reserves amount. The level of risk shall mean the possible percentages of risk a provider or payer has in any risk sharing arrangement. Downside risk shall mean the risk taken on by a provider organization as part of an alternate payment contract with a carrier or other payer where the provider organization is responsible for either the full or partial costs of treating a group of patients that exceeds a contract's budgeted payment arrangements. 

Upon completion of this study, the division shall promulgate all necessary regulations to implement the findings of the study.

The division shall then issue a report on its findings to the senate and house committees on ways and means and the joint committee on health care financing by July 1, 2018.