In our February 14, 2025, blog post, we detailed a proposed expansion of Article 45-A of New York’s Public Health Law (hereinafter, the Disclosure of Material Transactions Law) included in the proposed Fiscal Year 2026 New York State Executive Budget (FY 26 Executive Budget). The amendment was dropped from the final FY 26 Executive Budget’s Health and Mental Hygiene Article VII Legislation, which was signed into law by Governor Hochul on May 9, 2025. The Memorandum of Support accompanying the proposed legislation touted the amendment as a way to strengthen New York State Department of Health’s (DOH) oversight of material health care transactions, contending that it would allow DOH to gather more quantitative information to assess the transaction’s potential and actual post-closure impact. The legislation would have increased oversight by altering notice and disclosure requirements, permitting DOH to require a full cost and market impact review, and empowering DOH to delay the transaction’s closing to allow for a fulsome cost and market impact review. However, with the rejection of the amendment from the final FY 26 Executive Budget, the Disclosure of Material Transactions Law will remain in effect as it has been since August 1, 2023. 

Though the proposed amendment to Article 45-A did not make the cut, the first half of 2025 has certainly not been devoid of developments for the Disclosure of Material Transactions Law. In fact, DOH has taken proactive steps to guide stakeholders, their legal counsel, and the public toward deeper understanding of and compliance with the Disclosure of Material Transactions Law. First, nearly a year and a half after the Disclosure of Material Transactions Law took effect, DOH published long-awaited Public Health Law Article 54-A, Material Transactions Frequently Asked Questions. Just over a month later, DOH published an electronic Material Transactions Reporting Form to be used for submitting notice of a material health care transaction. Until publication of the Material Transactions Reporting Form, parties to a “material transaction” had submitted such notice via email to DOH. Now, according to the DOH website, email submissions will no longer be accepted, and effective immediately, all new notices must be reported using the Material Transactions Reporting Form at least 30 days prior to the proposed transaction’s closing.

The Material Transactions Reporting Form formalizes and expands the categories of information that health care entities involved in a “material transaction” are required to submit to DOH. Health care entities are strongly encouraged to download the cover sheet to the Material Transactions Reporting Form and the PDF of the Material Transactions Reporting Form Questions to further understand the requirements. Critically, DOH notes that the PDF of the Material Transactions Reporting Form Questions is intended as guidance only and that parties cannot complete the paper form and submit it to DOH in lieu of electronic submission. The Material Transactions Reporting Form requires submission of the following information, which we note is not a comprehensive summary of the form’s requirements:

• Parties to Material Transaction: The form requires disclosure of each party’s legal name, address, jurisdiction of incorporation, principal jurisdiction of business, and all other jurisdictions where the entity conducts business. Additionally, the form requires disclosure of any instance where an officer, director, manager, partner, owner, trustee, or member of a party has been (1) charged, pled guilty, or been convicted of a criminal offense, (b) party to a civil action involving dishonesty, breach of trust, or a financial dispute, or (c) charged with wrongdoing by any government agency or authority. 
• Pre-Closing Organizational Chart: The form requires identification of all persons known to control, to be controlled by, or under common control with, each party, and further must include voting percentages for each person listed. As detailed in our previous posts, “control” includes the right to direct or cause the direction of the management or administrative functions of a health care entity whether by voting rights or contract. 
• Post-Closing Organizational Chart: Parties must disclose a post-closing organizational chart demonstrating the surviving entity and its interrelationships after the closing of the material transaction. Information regarding the transaction and the surviving entity’s finances, including the purchase price and projected annual revenue for three years, as well as applicable prior material transaction history must also be disclosed.
• Financial Statements: Parties must submit financial statements for the last two fiscal years, including balance sheets, income statements, and cash flow statements, along with projected financial statements for the surviving entity dated one day after closing.
• Impact of Material Transaction: Parties must respond to several questions aimed at determining the material transaction’s impact on cost, quality, access, health equity, and competition in New York during the five years following the closing date. Further, DOH asks parties to provide statistics regarding current and anticipated service to Medicaid beneficiaries, uninsured patients, and “historically underserved populations or groups.”

NY's decision not to pursue the proposed amendment may signal a win for health care investors and other stakeholders, particularly in a time where other states are increasing their regulation of health care transactions, whether through notice or pre-closing approval requirements. While the abandonment of the proposed amendment to the Disclosure of Material Transactions Law reflects New York’s current reluctance to adopt a more comprehensive review and approval framework for health care transactions, the release of the Material Transactions Reporting Form underscores New York’s commitment to systematically capturing detailed information about material transactions within the state. DOH has only received 2 additional notices of material transactions in 2025, bringing the total number of notices received since the law’s enactment to 11. Parties contemplating entering a material transactions in New York should consider how it will provide all documentation and information required, particularly those documents that require future projections.