Because No One is Immune to the Law
May 25, 2023 - Announcements, Healthcare, Regulatory, United States

New York Enacts Material Healthcare Transactions Notice Requirements: Four Key Takeaways

Life Science

On May 3, 2023, New York Governor Kathy Hochul signed into law an amendment to the New York Public Health Law that will require certain healthcare entities to provide the State Department of Health (DOH) with written notice and supporting documentation of “material transactions” at least 30 days before closing. This new law will require healthcare entities, such as management service organizations, physician practices, and other similar entities, to submit notice and supporting documentation to DOH when engaging in mergers, acquisitions, and other transactions in New York. 

Here are four key points from the new law:

1. How does the enacted legislation differ from the initial proposal? The original proposed legislation gave DOH broad authority to both review and approve material transactions and allowed DOH to define what transactions are material. See our previous blog post here. The enacted legislation pulls back on this authority and does not grant DOH the ability to approve transactions and also excludes “de minimis” transactions from review. De minimis transactions in this context are those that result in a healthcare entity increasing its total gross in-state revenues by less than $25 million.[1]

2. Definition of “Material Transactions.” The law defines “material transactions” as any of the following:

(1) a merger with a healthcare entity

(2) an acquisition of one or more healthcare entities, including, but not limited to, the assignment, sale, or other conveyance of assets, voting securities, membership or partnership interest, or the transfer of control

(3) an affiliation agreement or contract formed between a healthcare entity and another person

(4) the formation of a partnership, joint venture, accountable care organization, parent organization, or management services organization for the purpose of administering contracts with health plans, third-party administrators, pharmacy benefit managers, or healthcare providers as prescribed by the commissioner by regulation.[2]

3. Exclusions from Review. In addition to de minimis transactions mentioned above, the law excludes the following transactions from review: clinical affiliations of healthcare entities formed with the intent to facilitate collaboration between the entities (i.e., collaboration on clinical trials), transactions already subject to the Certificate of Need (CON) process, or an insurance entity approval process under the New York Public Health or Insurance Laws.

4. Notice Requirements. The notice and review process will be further defined in regulations promulgated by DOH. Written notices must have information including, but not limited to, name and address of the transaction parties, copies of the definitive agreements, locations impacted by the transactions, closing date, and description of the purpose of the transaction, including anticipated impacts on cost, quality, and access in the impacted markets.[3] Upon receipt of a transaction notice, DOH will submit the notice to various bureaus of the Office of the New York Attorney General and post a summary of the proposed transaction on its website with an opportunity for public comment. 

5. Noncompliance Consequences. DOH may impose a civil penalty of $2,000 for each day that a transaction is out of compliance. This penalty may be increased up to $5,000 for subsequent violations that pose a “serious threat to the health and safety” of individuals.[4] Each day that the violation continues is a separate violation and the penalty may extend until and unless a notice is filed.


Although the law is less onerous than what had been originally proposed, it does impose obligations on a broad array of entities, including management services organizations, in an attempt to monitor investments and other activities in the healthcare industry. 

[1] NY Pub. Health L. § 4550(4)(b).

[2] NY Pub. Health L. § 4550(4)(a).

[3] NY Pub. Health L. § 4552(1).

[4] NY Pub. Health L. § 4552(4); NY Pub. Health L. § 12.