New York Fails to Pass Expanded Health Care Transaction Notice Requirements Bill

On May 9, 2025, New York State (“NYS”) Governor Kathy Hochul signed legislation enacting the State Fiscal Year 2025-26 budget into law.¹ Notably omitted from the final budget legislation was Part S of the Health and Mental Hygiene Article VII legislation, as proposed in Governor Hochul’s executive budget, which corresponded to an initiative that would have substantially broadened NYS’s existing health care transaction law.

Enacted in April 2023, New York’s current health care transaction law requires only notice to the NYS Department of Health (“DOH”), without DOH’s express review or approval rights.² Given the limitations under the current law, Governor Hochul’s original executive budget legislation proposed to strengthen NYS’s ability to collect and perform in-depth market analyses of transactions,³ which would have aligned the law more closely with the broader health care transaction laws in California, Massachusetts, and Oregon.

To that end, the proposed amendments sought to (i) extend notice from 30 to 60 days prior to the proposed transaction’s closing date, (ii) grant DOH authority to conduct a preliminary review, and the ability to initiate a more intensive cost and market impact review, (iii) require transacting parties to include information in the notice about their financial and operational owners and real estate arrangements, and (iv) impose a five-year post-closing annual reporting obligation.

During the legislative process, these proposed changes faced significant opposition from various physician, dental and other health care groups, which argued that the amendment’s additional administrative burdens on health care entities would have a detrimental effect on the health care system by discouraging health care investments in the state and, more broadly, stifling innovation.

While these changes to New York’s health care transaction law did not pass, Governor Hochul’s effort is significant for a few reasons:

1. It reflects a potential belief by policymakers that the current law should go farther, in both reviewing and approving material health care transactions in NYS;
2. This potential belief is reinforced by the relatively few health care transactions that have been reported since the current law’s enactment in 2023;⁴ and
3. It previews potential changes that could be considered outside of the budget process because, as discussed in our prior Alert, NYS has also been exploring other avenues to strengthen the reach of its health care transaction law, including through the issuance of new guidance.

Accordingly, health care entities and investors considering transactions in New York should continue to closely monitor developments in NYS.

1. See Assembly Bill A3005, Senate Bill S3006, Senate Bill S3007 (which enacts into law the health and mental hygiene budget legislation), Senate Bill S3008, and Assembly Bill A3009.
2. N.Y. Pub. Health Law § 4550 eq seq. and DOH’s website for additional information.
3. In the State of the State Policy Book, Governor Kathy Hochul stated her interest in strengthening the state’s ability to “collect and perform in-depth market analysis of [] transactions . . . to ensure that all healthcare mergers and acquisitions serve the best interests of patients and communities.”
4. Only 11 transactions have been reported to DOH since the law became effective in August 2023. See “List of Material Transaction Disclosures,https://www.health.ny.gov/facilities/material_transactions/transactions.htm.