- May 5, 2023
- Alerts
New York Enacts Notice Requirement for Health Care Transactions
The final budget for fiscal year 2023-2024 passed this week by the New York State legislature requires certain health care entities to pre-notify the Department of Health (the “Department”) of “material transactions” that meet certain financial thresholds. As originally proposed earlier this year, such “material transactions” required approval of the Department. Now, only notice is required.
The definition of a “health care entity” includes physician practices, physician groups, and management services organizations, provider-sponsored organizations, health insurance plans, and any other kind of health care facility, organization, or plan providing health services in New York. The definition of “material transactions” includes most if not all M&A or M&A-type transactions, including joint ventures, but the law specifically excludes:
The notice must be provided at least 30 days before the transaction closing date. Once the parties submit the required information, the Department will post a public notice to its website regarding the transaction and provide the notice to the New York attorney general. Parties to the transaction must also notify the Department upon closing. Failure to notify the Department of a material transaction can result in penalties of at least $2,000 per day.
Information to be provided includes names and addresses of those involved, copies of agreements governing the material transaction, plans to reduce or eliminate services, a description of the nature and purpose of the transaction, and the closing date.
The Department is directed to further define the process and provide applicable forms. The law is scheduled to go into effect around August 1, 2023.
Should you have any questions regarding the above, please contact the authors, or your regular Garfunkel Wild contact or email us at info@garfunkelwild.com.
The definition of a “health care entity” includes physician practices, physician groups, and management services organizations, provider-sponsored organizations, health insurance plans, and any other kind of health care facility, organization, or plan providing health services in New York. The definition of “material transactions” includes most if not all M&A or M&A-type transactions, including joint ventures, but the law specifically excludes:
- clinical affiliations formed to collaborate on clinical trials or graduate medical education programs;
- transactions already subject to review under the Public Health Law; or
- de minimis transactions, which are transactions (or a series of related transactions) which result in a health care entity increasing its total gross in-state revenues by less than $25 million.
The notice must be provided at least 30 days before the transaction closing date. Once the parties submit the required information, the Department will post a public notice to its website regarding the transaction and provide the notice to the New York attorney general. Parties to the transaction must also notify the Department upon closing. Failure to notify the Department of a material transaction can result in penalties of at least $2,000 per day.
Information to be provided includes names and addresses of those involved, copies of agreements governing the material transaction, plans to reduce or eliminate services, a description of the nature and purpose of the transaction, and the closing date.
The Department is directed to further define the process and provide applicable forms. The law is scheduled to go into effect around August 1, 2023.
Should you have any questions regarding the above, please contact the authors, or your regular Garfunkel Wild contact or email us at info@garfunkelwild.com.