New York’s regulatory oversight of health care transactions is evolving rapidly. The Disclosure of Material Transactions Law (Article 45-A of the Public Health Law), which took effect August 1, 2023, introduced new pre-closing reporting obligations for health care entities. Now, Governor Kathy Hochul’s proposed amendments—introduced in her January 21, 2025 executive budget—aim to significantly expand that oversight. At the same time, the New York State Department of Health (DOH) has issued long-awaited guidance clarifying several ambiguities in the existing law. These developments are especially relevant for health care providers, management service organizations (MSOs) and private equity stakeholders contemplating new affiliations or investment activity in the state.
Background of Article 45-A as Enacted
Under the current Article 45-A, health care entities are required to report “material transactions” to the DOH at least 30 days before closing. The definition of a health care entity is broad, including traditional providers such as physician practices and health plans, as well as health care MSOs, dental practices, clinical laboratories, pharmacies and Accountable Care Organizations (ACOs)—entities previously outside the scope of New York’s Certificate of Need (CON) regime. The law defines a “material transaction” as any merger, acquisition, affiliation or partnership that results in a health care entity gaining $25 million or more in in-state revenue, de minimis transactions excluded.
DOH Guidance
In March 2025, the DOH released targeted FAQs to clarify certain ambiguities in Article 45-A, such as:
- The FAQs explain that even if a transaction includes components that fall under the existing CON regime, the non-CON components must still be reported under Article 45-A if they meet the statutory threshold.
- The FAQs also provide examples of the types of disclosures required, such as summaries of anticipated impacts on cost, quality and competition—information that under the proposed amendments, the DOH may subsequently use “as evidence” in any investigation, review or other action by DOH or the Office of the Attorney General (OAG).
- In relation to material transactions, the FAQs confirm that multiple related transactions within a 12-month period must be aggregated if they share at least one common party to meet the $25 million revenue threshold.
Proposed Amendments by Governor Hochul
If enacted, Governor Hochul’s proposed amendments would significantly expand both the scope and the regulatory impact of Article 45-A, representing a marked shift from the current notice-only regime and bringing New York closer to a formal transaction approval model. For example:
- The 30-day pre-closing reporting period requirement would increase to 60 days.
- Transaction parties would be required to disclose more detailed information, including any ownership interest in other health care entities that have recently closed or reduced services and any related real estate arrangements such as sale-leasebacks.
- The DOH would gain new powers to conduct cost and market impact reviews (CMIRs) in connection with certain transactions. These reviews could delay closing by up to 180 days following the completion of the CMIR.
One of the most significant changes for health care entities is the introduction of post-closing reporting obligations. Under the proposed amendments, parties would be required to submit annual reports to the DOH for five years following a covered transaction. These reports must include impact analyses based on metrics defined by the DOH, who would then have the authority to use the data in future investigations. In addition, the DOH may seek reimbursement for costs associated with conducting its reviews, creating an additional financial burden for parties involved in reportable transactions.
What This Means
For health care entities, the implications are clear: New York is taking a more aggressive approach to regulating consolidation and investment in the health care sector. Private equity-backed transactions and MSO affiliations, in particular, are likely to face closer scrutiny and longer timelines. The proposed amendments also expand compliance exposure by introducing new data disclosure obligations and empowering the DOH to review broader categories of deals.
While the proposed changes are not yet law, they signal a strong regulatory intent that all stakeholders should take seriously. Health care entities contemplating transactions in New York must act now to ensure that their deal structures and compliance strategies can withstand this shifting regulatory landscape.
New York’s material transaction law is no longer just about transparency—it is evolving into a more formal review and enforcement framework. For health care entities operating in the state, proactive compliance is now essential. By preparing early, revising transaction timelines and aligning internal diligence processes with the DOH’s expectations, stakeholders can minimize delays and regulatory friction while advancing their strategic goals.
Hall Render recommends that any party contemplating a health care transaction in New York consider the following:
- Monitor Legislative Developments: Closely track the progress of the executive budget and anticipate forthcoming DOH rulemaking to implement the amended statute.
- Conduct Early Transaction Assessments: Analyze whether proposed deals meet the $25 million materiality threshold, taking care to aggregate related transactions. Begin preparing impact summaries regarding cost, quality and competition.
- Plan for Longer Timelines: Build sufficient lead time into transaction planning to accommodate a potential 60-day notice period and, where applicable, a CMIR review lasting up to 180 days.
- Strengthen Diligence: Conduct enhanced diligence on ownership structures, quality outcomes and community impact to prepare for potential public scrutiny.
- Engage Legal Counsel Proactively: Legal teams should be involved early to navigate both the current disclosure rules and potential CMIR obligations, as well as assist with post-closing compliance.
- Use DOH Resources Effectively: Refer to the March 2025 DOH FAQs and direct questions to the designated email address (MaterialTransactionDisclosure@health.ny.gov) to ensure alignment with evolving interpretations.
Hall Render will continue to monitor these developments and will provide further guidance as the proposed amendments progress. In the meantime, if you have any questions on how these new requirements may affect your upcoming transaction, please contact:
- John Bowen at (317) 429-3629 or jbowen@hallrender.com;
- Song Faulkner at (303) 880-0680 or sfaulkner@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
