Required Reporting of Material Transactions

Overview

On May 3, 2023, Governor Kathy Hochul signed into law Article 45-A of the Public Health Law (PHL). This law, which took effect on August 1, 2023, requires health care entities in New York State to provide notice to the New York State Department of Health of material transactions at least 30 days prior to the closing of the transaction.

The following entities are considered a health care entity under Article 45-A of the PHL and are subject to the reporting requirements:

• A physician practice or group
• A management services organization (MSO) or similar entity that provides all or substantially all administrative or management services under contract with at least one physician practice
• A provider-sponsored organization
• A health insurance plan
• Any other kind of health care facility, organization, or plan that provides health care services in New York

Article 45-A does not apply to insurers or pharmacy benefit managers already subject to regulation by the New York State Department of Financial Services.

A material transaction includes any of the following that occur during a single transaction or in a series of related transactions within a rolling rolling 12-month period (please see FAQs Question #5) that result(s) in a health care entity increasing its total gross in-state revenues by $25 million or more:

• A merger of one or more health care entities.
• An acquisition of one or more health care entities, including the assignment, sale, or other conveyance of assets, voting securities, membership or partnership interests or the transfer of control, such as contracting for services commonly provided through a management or administrative services agreement between a practice and an MSO.
• An affiliation agreement or contract formed between a health-care entity and another person.
• The formation of a partnership, joint venture, accountable care organization, parent organization, or MSO for the purpose of administering contracts with health plans, third-party administrators, pharmacy benefit managers, or health-care providers.

The following transactions are not considered material and are exempt from Article 45-A's notice requirement:

• Clinical affiliation of health care entities formed for the purpose of collaborating on clinical trials or graduate medical education programs
• Any transactions already subject to the Department of Health's Certificate of Need process or an insurance-entity approval process under New York State Public Health Law Articles 28, 30, 36, 40, 44, 46, 46-A, or 46-B
• De minimis transactions, which for this purpose constitutes a transaction or series of transactions that result in a health care entity increasing its total gross in-state revenues by less than $25 million

Additionally, Article 45-A directs the New York State Department of Health to publish the proposed transaction on its website for notice and comment from the public. The website publication will include the following information:

• A summary of the proposed transaction.
• An explanation of the groups or individuals likely to be impacted by the proposed transaction.
• Information about services currently provided by the healthcare entity, commitments by the healthcare entity to continue such services, and any services that will be reduced or eliminated.

Health care entities that are party to a material transaction are also required to notify the Department upon closing of the transaction. Failure to notify the Department of a material transaction shall be subject to civil penalties. Each day in which the violation continues shall constitute a separate violation. New York State Department of Health has the ability, if deemed necessary, to notify the New York Attorney General's office of its findings regarding a transaction.

Reporting Instructions

To provide notice to the Department of a material transaction, parties must submit notice electronically using the Material Transaction Reporting Form.

A complete form must be electronically signed and successfully submitted to the Department at least 30 days prior to closing the transaction.

Please be advised: The reporting form requires detailed information from each party to the transaction. For example, parties will need to submit detailed transaction information on areas including but not limited to:

• Parties to the transaction, such as where they do business and any history of wrongdoing;
• Data related to the transaction's anticipated impact on cost, quality, access, health equity, and competition in any impacted New York markets;
• Financial statements from each party and transaction documents on behalf of all parties;
• Public notice to be posted for public comment by the Department.

The above is intended to illustrate the detail required in the form and not intended to capture all requirements.

The Department therefore strongly encourages parties and their legal counsel, if represented, to review the form questions in advance of the minimum 30-day notice required to ensure adequate time to review, exchange information among parties, and reach out to the Department with any questions concerning the form.

• Download the Material Transactions Form questions
• Download the cover page to the reporting form for further instructions

For questions about the form, please email MaterialTransactionDisclosure@health.ny.gov

Requirement to Notify the Department of Transaction Closing

Upon closing of the transaction, the health care entities must inform the Department via an email to: MaterialTransactionDisclosure@health.ny.gov

Public Comment

The Department will publish proposed transactions on this website for notice and public comment. If you would like to submit comments regarding a material transaction, please submit your comments to the Department by sending an email to: MaterialTransactionDisclosure@health.ny.gov. In the subject line you should indicate that you are submitting a public comment and provide the transaction notice you are submitting comment for (example: Public Comment - Physician Group XYZ).

Frequently Asked Questions (FAQs)

For guidance regarding the Material Transactions law and reporting requirements, please review the Frequently Asked Questions

Material Transaction Disclosures

• List of Material Transaction Disclosures