In the 2026 New York State Executive Budget released on Jan. 21, New York Governor Kathy Hochul proposed the imposition of a cost market impact review for certain transactions involving healthcare entities in the state, according to a blog post by law firm McDermott Will & Emery.
If passed, the legislation would extend timeframes for closing certain large material transactions involving healthcare entities in New York and subject these transactions to heightened regulatory scrutiny.
Currently, New York requires healthcare entities to submit a written notice to the state's Department of Health, providing basic information about the transaction, at least 30 days before closing the deal. A healthcare entity is defined to include, with certain exceptions, physician practices, provider-sponsored organizations, health insurance plans or other types of healthcare facilities.
The governor's proposal would extend this timeframe to 60 days and allow the DOH to require additional documents and information from the parties involved in the transaction, as well as their parent and subsidiary entities.
Upon submission of the notice, the DOH would conduct a preliminary review to determine if a full cost and market impact review is necessary, potentially delaying the transaction for up to 180 days. Additionally, parties to material transactions would be required to annually report metrics related to cost, quality, access, health equity and competition. The DOH could request further information for evaluation as part of this process.
The proposed legislation includes provisions to protect submitted data from public disclosure, though it may be used in investigations or reviews. Furthermore, parties involved would bear all DOH costs associated with evaluating and reviewing these transactions.
The New York State Assembly and Senate will now review the legislation as part of the budget approval process. The state budget, reflecting any revisions to the governor’s executive budget approved by the State Senate and Assembly, must be signed into law by April 1.
"Although the proposed legislation would not grant DOH express authority to approve or disapprove proposed material transactions, DOH could significantly delay these transactions by declining to recognize a notice as complete without the production of the information and documents it requests," the report read.