In January 2025, Governor Hochul included an expansion of Public Health Law Article 45-A, which would have imposed reporting requirements for each party in certain material health care transactions, in her proposed FY2026 Budget. Although the expansion of Article 45-A failed to make it into the enacted FY2026 Budget, which Governor Hochul signed into law on May 9, 2025, its introduction and intent signal continued state interest in monitoring health care transactions.
The Article 45-A provisions in the Governor's proposed FY2026 Budget sought to:
- Allow the New York State Department of Health (NYS DOH) to complete a Cost Market Impact Review (CMIR)
- Extend the length of pre-closing notification (requiring submission 60 days in advance rather than the current 30)
- Expand filing requirements
- Broaden the scope of what constitutes a "material transaction"
- Require reporting years after the transaction occurs
- Authorize NYS DOH to charge fees for the review
- Expand NYS DOH enforcement powers
The proposed changes faced firm opposition from health care providers, industry stakeholders, and investors who argued that the amendments would deter investment, stifle innovation, and potentially impact access to care.
Shortly after the Budget passed without the amendments to Article 45-A, the NYS DOH published the long-awaited electronic Material Transaction Notice Form (the form) and a fifteen-page instruction document. While submissions of material health care transactions have been mandated since New York State initially enacted Article 45-A in 2023NYS DOH now requires electronic material health care transaction submissions and aims to standardize the information that it receives in connection with those submissions.
What does this mean for health care entities?
The promulgation of the form and the current legal and political landscape indicate that New York State will continue to scrutinize health care transactions.
It is likely Governor Hochul will again include an expansion to New York Public Health Law Article 45-A in her proposed FY2027 Budget, given that health care transaction impact on care access and quality remain a key area of focus for policymakers and regulators. In fact, many states have adopted or proposed health care transaction oversight tools that are similar to Article 45-A. Moreover, concerns over health care transactions, access to care, and affordability have bipartisan support at the federal level. Under the Biden Administration, the Federal Trade Commission (FTC), U.S. Department of Justice (DOJ), and U.S. Department of Health and Human Services (HHS) completed a year-long investigation into private equity consolidation in health care, concluding that private equity poses new and unique risks to health care services, which include higher prices, layoffs, inadequate staffing, and diminished care quality. Similarly, the Trump Administration has made clear that it intends to prioritize robust enforcement in the health care sector by issuing EO 14221 to address health care price transparency, continuing to add to Trump's first term initiatives.
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.
