State Healthcare Transaction Notification Laws

New York

Disclosure of Material Transactions: PBH §§ 4550-52

Current Status: Effective since August 1, 2023.

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Key Takeaways

  • Requires parties to provide notice to the New York Department of Health (“NYDOH”) of certain transactions involving “health care entities”.
  • The parties must provide 30 days notice before closing to the NYDOH.
  • The statute provides time for the NYDOH to review transactions, but does not grant any additional powers to block or modify transactions beyond existing New York antitrust laws.

Applies to “health care entities”, which is defined broadly, including:

  • Physician practices or groups;
  • Management services organizations or similar entities providing all or substantially all of the administrative or management services under contract with one or more physician practices;
  • Provider-sponsored organizations;
  • Health insurance plans; or
  • Any other kind of health care facility, organization or plan providing health care services in New York.

The statute specifically exempts insurers and pharmacy benefit managers.

Parties must provide notice of certain health care transactions, or a series of transactions over a 12 month period, including:

  • Mergers with a health care entity;
  • Acquisitions of one or more health care entities, including a sale of assets, voting securities, or transfer of control; or
  • Formations 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, pharmaceutical benefit managers, or health care providers.

The Statute requires notification if a transaction (or series of related transactions) results in a health care entity “increasing its total gross in-state revenues” by at least $25 million.

Parties must provide a broad set of information to the NYDOH, including:

  • Names and current addresses of the parties to the material transaction;
  • Copies of any definitive agreements, including pre- and post-closing conditions;
  • Identification of all locations in New York where health care services are currently provided by each party and the amount of associated revenues;
  • Information on any plans to reduce or eliminate services and/or participation in specific plan networks;
  • The closing date; and
  • Description of the nature and purpose of the proposed material transaction, including:
    • The anticipated impact of the material transaction on cost, quality, access, health equity, and competition in the impacted markets, which may be supported by data and a formal market impact analysis; and
    • Any commitments by the health care entity to address anticipated impacts.

Prior to closing, the NYDOH must post on its website:

  • A summary of the proposed transaction;
  • An explanation of the group or individuals likely to be impacted by the transaction;
  • Information about services currently provided by the health care entity, commitments by the health care entity to continue such services, and any services that will be reduced or eliminated; and
  • Details about how to submit comments, in a format that is easy to find and easy to read.

Beyond the information published on the NYDOH website, the information included in the notice is not subject to disclosure or requests pursuant to the New York Freedom of Information Law.

Health care entities who fail to provide the required notice 30 days prior to the closing of a material transaction could be fined up to $2,000 per day.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.