NY physician practice, MSO, and other health care transactions affected by new reporting rules

The New York legislature recently enacted new reporting requirements that will affect health care transactions across the state. Effective August 1, 2023, certain “material” mergers, acquisitions, affiliation agreements, and joint ventures involving “health care entities” must be reported to the New York Department of Health (NY DOH) at least thirty days prior to closing. NY DOH will also collect deal documents and other information and solicit public comment on summaries of these transactions. While NY DOH need not approve reported transactions (a notable change from an earlier version of the legislation), these new requirements may invite increased regulatory and public scrutiny, especially for management services organizations (MSOs) that support physician practices.

Transactions subject to the new reporting requirements

The new reporting requirements are codified in Article 45-A[1] to the New York Public Health Code, and obligate “health care entities” involved in a “material transaction” to provide information and documentation to NY DOH about each transaction. As noted, the new reporting requirements take effect starting on August 1, 2023.

  • Health care entities. “Health care entities” subject to the new reporting requirements are defined to include physician practice groups, provider-sponsored organization, MSOs or similar entities that contract with physician practices to provide all or substantially all of the administrative or management services for the practice, health insurance plans (unless licensed to do business in New York), and “any other kind of health care facility, organization[,] or plan providing health care services in this state[.]”[2]

  • Material transactions. Subject to revenue-based materiality thresholds and certain other exclusions, “material transactions” are defined to mean any of the following transactions (whether they occur during a single transaction or take place as a series of related transactions within a rolling twelve month period):

    • a merger with a health care entity;

    • an acquisition of one or more health care entities, including but not limited to the assignment, sale, or other conveyance of assets, voting securities, membership, or partnership interest or the transfer of control (and the law presumes there has been a change in control where 10% of a health care entity’s direct or indirect ownership changes hands);[3]

    • an affiliation agreement or contract formed between a health care entity and another person[4]; or

    • 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 as prescribed by the commissioner in regulation.[5]

  • Materiality thresholds. A transaction or series of transactions is considered material for purposes of triggering the new reporting requirements only if it will result in a health care entity increasing its total gross in-state revenues by at least $25 million.[6]

  • Other exclusions. Certain other transactions are also excluded from the new reporting requirements — including transactions that are otherwise already subject to DOH review.[7]

Scope of health care entity reporting obligations for material transactions

Health care entities involved in material transactions that trigger reporting under the new requirements must, as noted, provide written notice of the transaction to DOH at least 30 days prior to closing. The entity must then notify DOH when the transaction closes.[8] The new law also delineates certain additional requirements and processes associated with the new reporting regime.

  • Supporting documentation. The initial notice regarding the transaction must be accompanied with the following supporting documentation: (a) the names of the parties to the transaction; (b) “[c]opies of any definitive agreements governing the terms of the material transaction, including pre- and post-closing conditions”; (c) the locations where the parties to the transaction currently provide health care services in New York and the revenue generated from those locations; (d) “[a]ny plans to reduce or eliminate services and/or participation in specific plan networks” in connection with the transaction; (e) the proposed closing date; and (f) a brief description of the transaction that discusses its “anticipated impact” on “cost, quality, access, health equity,[9] and competition” and “any commitments to address anticipated impacts.”[10]

  • Non-DOH regulatory review. Immediately upon receipt of the initial notice and supporting documentation, DOH will forward the information “to the antitrust, health care[,] and charities bureaus of the office of the New York attorney general.”[11]

  • Public comment on transaction summary. In the 30-day period before the transaction closes, DOH will publish a summary of the proposed transaction that includes a description of the groups or individuals likely to be affected by the transaction and information about services that the health care entity currently provides, commitments by the health care entity to continue such services and any services that will be reduced or eliminated. NY DOH will then solicit public comments on the summary.[12]

  • Penalties for non-compliance with reporting requirements. Health care entities that fail to report will generally face civil penalties of at least $2,000 per day.[13]

The legislature has also delegated to NY DOH the task of establishing more detailed reporting requirements and specifying the form and manner for reporting and for public comment.

Key considerations

The legislature appears to have had particular interest in targeting MSOs that manage administrative functions for physician practices. That said, the scope of the new reporting requirements is very broad, such that numerous other health care transactions are likely to be swept into the scope of the new law.

With the passage of this statute, material health care transactions notably face several additional risks/costs: public and private perception, heightened potential for regulatory scrutiny, increased administrative burdens, and possible delayed closings/reduced transaction flexibility.

  • First, DOH will publicly release summary details about a transaction prior to it closing. DOH announcements could attract news coverage and raise questions from patients that health care entities must be ready to answer.                                                                               

  • Second, DOH will collect, among other things, “[c]opies of any definitive agreements governing the terms of the material transaction, including pre- and post-closing conditions”[14] and this will be transmitted to the Attorney General.[15] Health care entities should be prepared for the possibility of greater regulatory scrutiny of transaction terms, especially if a transaction touches particular policy concerns of DOH, such as broad non-compete agreements or arrangements that could implicate the corporate practice doctrine.  

  • Third, there are administrative burdens associated with providing mandated information, including the requirement to provide a discussion of the transaction’s “anticipated impact” on “cost, quality, access, health equity, and competition” and “any commitments to address anticipated impacts.”[16] It is an open question for now as to what will happen if the regulators are not satisfied with these descriptions but there is no corresponding clear violation of any applicable New York State law.

  • Fourth, parties must be prepared to report at least thirty days prior to a transaction closing.[17] In some cases where a transaction is on a very fast track, this requirement could delay a closing (although not typically, unless the State intervenes as the result of the mandated disclosure).

New York’s new reporting requirements follow similar pre-closing reporting requirements[18] adopted by Massachusetts,[19] Connecticut,[20] Washington,[21] Oregon,[22] and California.[23] Other states are also considering and may enact similar legislation.


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Hogan Lovells will continue to monitor DOH’s implementation of this new law, and will update clients upon DOH’s release of regulations or other relevant guidance. We will also continue to monitor developments in other states requiring reporting of health care transactions. If you have any questions about this law or other similar state laws, please contact any of the authors of this alert or the Hogan Lovells attorney with whom you work.


Authored by Jeffrey Schneider, James Huang, Jessica Hanna, and Joseph Liss


[1]See part M, here.

[2]N.Y. Pub. Health Law § 4550(2) (“Control” shall be presumed to exist if any person directly or indirectly owns, controls, or holds with the power to vote ten percent or more of the voting securities of a health care entity.).

[3]Id. § 4550(1).

[4] Not including a clinical affiliation of health care entities formed for collaborating on clinical trials or graduate medical education programs. Id. § 4550(4)(b). But note that since both physician practices and MSOs are “health care entities,” id. § 4550(2), contracts between them fall into the category of agreements that must be disclosed (subject to the materiality threshold and depending on the scope of management services provided).

[5]Id. § 4550(4)(a).

[6]Id. § 4550(4)(b). The statute does not address whether this is $25 million over the course of a year or some other time period, though DOH may clarify that point in regulation or guidance.

[7]Id., specifically transactions already subject to review under articles 28, 30, 36, 40, 44, 46, 46A or 46B of the Public Health Law.

[8] Id. at § 4552(3).

[9]Health equity is defined to mean “achieving the highest level of health for all people and shall entail focused efforts to address avoidable inequalities by equalizing those conditions for health for those that have experienced injustices, socioeconomic disadvantages, and systemic disadvantages.” Id. § 4550(3).

[10]Id. § 4552(1).


[12]Id. § 4552(2). Only the summary of the transaction is subject to public disclosure and comment, and not any underlying supporting documentation submitted by the health care entity.

[13]Id. § 4552(4) (referencing N.Y. Pub. Health Law § 12). Penalties could also be increased up to $5,000 for a subsequent violation within 12 months of the initial violation if it presents a serious threat to the health and safety of an individual or individuals (or up to $10,000 if the violation directly resulted in serious physical harm to any patient or patients).

[14]Id. § 4552(1)(b).

[15]Id. § 4552(1).

[16]Id. § 4552(1)(f).


[18] The contents of these states’ reporting requirements (and the role of the relevant agencies in transaction review) vary from state-to-state. Such reporting laws are also in addition to any change of ownership reporting that state licensing agencies may also require.

[19]Mass. Gen. L. ch. 6D, § 13.

[20]Conn. Gen. Stat. § 19a-486i; Notice of Physician Acquisition, Off. of Att’y Gen., link.

[21]Wash. Rev. Code § 19.390.010 et seq.; Healthcare Transactions Reporting Requirement, Off. of Att’y Gen., link.

[22]Ore. Rev. Stat. § 415.500 et seq. (permitting the Oregon Health Authority to impose conditions on transactions); Off. Health Pol’y, Health Care Market Oversight, Ore. Health Auth., link,

[23]Cal. Health & Saf. Code § 127507 et seq.; Frequently Asked Questions, at 9, Off. Health Care Affordability, link (describing impact reviews).


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