Just last week, we reported that the 2025/26 NYS Budget Bill did not include a provision that would have increased the requirements for seeking Department of Health (DOH) approval of a material healthcare transaction (which generally means one that increases revenues from healthcare services by at least $25 million) [here]. We have previously written about reporting requirements for these types of transactions in NYS that have existed since 2023, when Public Health Law (PHL) Article 45-A was enacted [here].
Last Thursday, the DOH introduced its new electronic Material Transactions Notice form, marking the official end of its email-based submission process and significantly increasing the scope of the reporting requirements, as outlined below. Healthcare entities must electronically sign and successfully submit this electronic form to the DOH at least 30 days before closing a material transaction.
The electronic form is accompanied by a supplemental PDF that outlines the questions included in the online submission to assist with preparation. The DOH has significantly expanded the scope of information it expects from healthcare entities involved in covered transactions. While the statute outlines a basic notice requirement, the electronic form calls for a much deeper understanding of the finances, structure, and ownership/leadership of parties.
- Parties to the Material Transaction
The form requires disclosure of each party’s legal name, address, jurisdiction of incorporation, principal place of business, and other jurisdictions where the entity conducts business.
Additionally (similar to Certificate of Need applications), a character and fitness assessment must be completed for each officer, director, manager, partner, owner, trustee, and member. Disclosures include any history of criminal charges or convictions, civil actions involving dishonesty, breach of trust, or a financial dispute, and investigations or enforcement actions by a governmental agency.
- Pre-Closing and Post-Closing Organizational Chart
The pre-closing organizational chart must identify all entities that control, are controlled by, or are under common control with a party to the transaction. The chart must also contain the voting percentage of each person or, if control is maintained other than by the ownership or control of voting securities, the basis for that control.
The post-closing organizational chart must depict the interrelationships among the new owners and surviving entities after the transaction is complete.
- Material Transaction Details
The form requests key financial and transactional data, including the purchase price, projected annual revenue over the next three years, and a summary of relevant transaction history for the past three years. Each prior transaction must include the parties involved, date of closing (if applicable), and size of consideration.
- Financial Statements
Entities must submit financial statements from the past two fiscal years, prepared in accordance with Generally Accepted Accounting Principles (GAAP) or other legally permissible accounting standards.
- Impacts of the Material Transaction
The DOH includes a series of questions aimed at evaluating the impact of the transaction. This includes questions concerning cost, quality, access, health equity, and competition in New York markets over the next five years.
Additional Documentation
In addition to the above, entities must upload copies of definitive transaction documents (e.g., asset purchase agreements), governance documents such as charters, bylaws, and operating or partnership agreements, financing agreements, and public notice information.
This expansion of requirements aligns with the broader trend towards increased regulatory scrutiny in healthcare transactions. Stakeholders involved in healthcare transactions in New York should review the new form closely to ensure that they are prepared for a more robust disclosure process. Entities should anticipate that further rulemaking or guidance may follow.
We will continue to monitor additional guidance and developments surrounding New York’s PHL Article 45-A and the new electronic submission process.
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