The New York State Department of Health (DOH) published on May 15, 2025, the long-awaited electronic Material Transaction Notice Form (the Form), which replaces its prior email submission process with a portal filing for material transaction notices. Importantly, as authorized by Article 45-A of the Public Health Law (PHL), DOH is requesting far more detailed information about the parties to the material transaction than is outlined in the statute, such as a pre- and post-closing organizational chart, financial statements, governance documents and questions related to the owners, officers and directors of the parties, as discussed in more detail below.
Statutory Requirements
As discussed in a prior blog post, healthcare entities (HCEs) are required to submit to DOH notice of a material transaction at least 30 days prior to the target closing date, together with supporting documentation "in the form and manner prescribed by the department." Section 4552 of the PHL specifically requires the notice to include:
- the names and addresses of the parties to the proposed material transaction
- copies of the definitive agreements
- list of all locations where healthcare services are currently provided
- any plans to reduce or eliminate services and/or network plan participation
- the closing date of the proposed material transaction
- a brief description of the nature and purpose of the proposed material transaction
- the anticipated impact of the material transaction on cost, quality, access, health equity and competition in the impacted markets
- any commitments by the HCE to address anticipated impacts
What's New?
The Form of notice requires parties to material transactions to submit the following documents:
- Pre-Closing Organizational Chart. For each party to the transaction, DOH is requesting a chart that shows each person or entity that controls, is controlled by or is under common control with the other party. In addition to identifying the entity type (e.g., corporation, LLC, etc.) and jurisdiction, the chart must include the voting percentages of each person listed or, if control is exercised through some other mechanism, the basis for that control.
- Post-Closing Organizational Chart. DOH is requesting a chart that shows the new owners and/or surviving entities and their interrelationships. The instructions do not expressly require this chart to include ownership percentages.
- Financial Statements. Each party must submit financial statements consistent with Generally Accepted Accounting Principles (GAAP) or other accounting principles as of the end of the last two fiscal years and projected financial statements for the surviving entity dated one day after closing.
- Finance-Related Documents. If applicable, DOH is requesting fairness opinions offering memoranda, private placement memoranda, investor disclosure statements and any other investor solicitation materials.
- Governing Documents. Each party must submit its charter, bylaws or operating agreement and any financing document.
In addition to the above documentation, the Form requests detailed information about the parties to and nature and impact of the transaction.
- The Form includes "character" questions familiar to anyone who has submitted a New York Certificate of Need application, such as whether the party or any of its owners, officers, members, managers or directors have been charged with or indicted for any criminal offense, been a party to any civil action involving dishonesty, breach of trust or a financial dispute, or been charged with any wrongdoing by a government agency.
- The Form also requests information on each party's transaction activity over the past three years. Nothing in the Form or in the instructions suggests that these transactions are limited to New York.
- The Form includes a series of questions intended to help DOH
assess the impact of the transaction on cost, quality, equity,
access and competition. These include:
- the average contracted commercial payer rate for each service line before and after closing
- whether any public stakeholders have expressed concerns about the transaction's impact on quality
- whether the transaction will result in reduction of appointment availability or longer wait times
- pre- and post-closing information about the number of Medicaid beneficiaries and uninsured patients served by each party
- changes to the volume of services provided in rural areas and other underserved populations
- The Form requires parties to disclose any efforts to engage and/or inform the public about the transaction, including by attaching direct communications with the press, local communities and other stakeholders.
Holland & Knight healthcare attorneys are available to answer your questions about the material transactions notice process and will continue to monitor the law and any regulations if and when they become available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
