Health Care Transactions

The first quarter of 2025 has been eventful for New York’s Disclosure of Material Transactions Law. As discussed in our recent blog post, the proposed Fiscal Year 2026 New York State Executive Budget (FY 26 Executive Budget) contains an amendment that would alter reporting parties’ notice requirements, extend waiting periods, and increase oversight of material health care transactions by the New York State Department of Health (DOH). Now, nearly a year and a half after the Disclosure of Material Transactions Law took effect, DOH has published Public Health Law Article 54-A, Material Transactions Frequently Asked Questions (FAQs) on its website. The law currently requires “health care entities” engaged in a “material transaction” to provide written notice of the transaction to DOH at least 30 days before the transaction closing as well as notice to DOH upon the transaction closing. With the FAQs, DOH seeks to “provide responses to common questions the Department has received to date” and clarify health care entities’ obligations under the Disclosure of Material Transactions Law. The FAQs expand on the statute’s language, providing guidance on what “health care entities” are subject to the law, what constitutes a “material transaction,” how a transaction’s impact will be assessed, and the ability to comment on a proposed transaction.

Governor Newsom signed over 1300 bills and vetoed almost 190 bills in 2024.  Consistent with prior years, in 2024, California enacted multiple laws significantly impacting the health care industry.  From artificial intelligence (AI) to providers to health plans, these new laws require proactive efforts to ensure on-going compliance.

We highlight below the most important of the heath care-focused bills passed during this year.  Unless otherwise noted, these new laws are effective January 1, 2025.

On September 28, 2024, California Governor Gavin Newsom vetoed California Assembly Bill 3129 (AB-3129) originally introduced by California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood and passed by the California legislature earlier in the month.  While the California legislature can override the Governor’s veto, legislators likely will not take this extraordinary step, which has not been taken in several decades.

Effective immediately, on August 22, 2024, the Office of Health Care Affordability (OHCA) adopted revisions to the cost and market impact review (CMIR) regulations (Revised Regulations), which govern California’s pre-closing health care transaction review process. As discussed in our prior post, certain health care entities must provide OHCA with notice of a transaction at least 90 days prior to closing. The Revised Regulations, among other things: (1) expand who must file a notice; (2) narrow the applicability of the health care professional shortage area threshold; (3) clarify calculation of California-derived revenue; (4) clarify confidentiality of expedited review request documents; and (5) add a required attestation.

States are increasingly exercising regulatory oversight of health care transactions by enacting laws requiring prior notice or approval of certain health care transactions. Currently, 15 states have enacted health care transaction review laws applicable to for-profit transactions. On Wednesday, March 20, 2024, Mintz members Daniel A. Cody, Deborah A. Daccord, and Karen S. Lovitch engaged in an insightful discussion with Lois Johnson, General Counsel of Massachusetts Health Policy Commission, to discuss the latest developments surrounding these laws and gain valuable insight from Ms. Johnson’s expertise, as Massachusetts was one of the first states to implement a health care transaction review process. The highlights of this informative conversation are summarized below, and the webinar can be viewed here.

On March 13, 2024, Indiana joined the ranks of states exercising greater oversight and regulation of health care transactions.  Senate Enrolled Act No. 9 (S.B. 9), which takes effect on July 1, 2024, requires written notice to the Indiana Attorney General (the AG) 90 days in advance of an acquisition or merger involving an Indiana “health care entity” that results in a change of control.  The law does not grant the AG authority to approve or deny a transaction, but the AG may evaluate any antitrust concerns and issue a civil investigative demand for additional information. 

On March 1, 2024, New Mexico joined a growing number of states in enacting legislation that increases oversight of certain health care transactions. Senate Bill 15 (S.B. 15), which adds a new section to the New Mexico Insurance Code (the Code) titled the “Health Care Consolidation Oversight Act” (the Act), takes effect on May 1, 2024.

Read about the FTC’s March 5, 2024 workshop on private equity (PE) investments in the health care industry and a joint request for information on the effects of PE transactions in the health care industry issued by the FTC, DOJ, and HHS.

California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood recently introduced legislation (AB-3129) that would authorize the AG to review private equity group and hedge fund health care transactions. The proposed legislation’s stated intention is to address price increases and lower quality of and decreased accessibility to services associated with private equity acquisitions of certain health care entities, including physician practices. This article provides an overview of the proposed bill, an analysis of the key issues raised by the proposed legislation, and suggestions for next steps for those potentially affected by the proposal. 

California’s health omnibus trailer bill SB-184 and the final cost and market impact review (CMIR) regulations (CMIR Regulations), which went into effect on December 18, 2023, have ushered in a significant change in California’s health care regulatory landscape with the creation of the Office of Health Care Affordability (OHCA). On January 2, 2024, OHCA began accepting notices of covered transactions through its notice of material change transaction submission portal.

California’s new Office of Health Care Affordability (OHCA) is set to start pre-closing regulatory review of certain health care transactions on January 1, 2024. As further explained in our previous post, subject to certain exceptions, a broad range of health care entities (collectively, Health Care Entities) soon will be subject to potential pre-closing transaction review.

California’s new Office of Health Care Affordability (OHCA) is set to begin advance regulatory review of certain health care transactions beginning January 1, 2024. As further explained in our previous post, subject to certain exceptions, a broad range of health care entities (collectively, Health Care Entities) will soon be subject to potential prospective transaction review. OHCA initially published proposed regulations for the new transaction review process in early August (for more details, see our prior post and podcast).  As further discussed in our previous post, these proposed regulations were revised in October and made available on the OHCA website, with a comment period that ended on October 17, 2023. In response to October’s public comments, OHCA has further revised the proposed regulations (Revised Regulations), which are available here. This time however, OHCA has also provided notice of proposed emergency regulatory action, indicating that this version of the regulations will be submitted to the California Office of Administrative Law (OAL) for approval. Once submitted, the public will have five days to provide comments to the OAL. If the OAL approves the regulations, it will file them with the California Secretary of State and the regulations will become effective as emergency regulations for five years as of the filing date. During this period, OHCA will proceed with regular rulemaking action addressing prospective health care transaction review.

Governor Newsom signed 890 bills and vetoed 156 bills in 2023. Every year, California passes multiple laws that impact health care practitioners and health facilities and, as further described below, 2023 is no exception. From physician assistant supervision to nursing facility informed consent requirements, these laws will present various new compliance considerations for health care practitioners and health facilities as soon as January 1, 2024.

California’s new Office of Health Care Affordability (OHCA) is set to begin advance regulatory review of certain health care transactions beginning January 1, 2024. As further explained in our previous post, subject to certain exceptions, third party payers and administrators, hospitals, hospital systems, fully integrated delivery systems, pharmacy benefit managers, physician organizations, and other providers (collectively, Health Care Entities) will soon be subject to potential prospective transaction review. OHCA initially published proposed regulations for the new transaction review process in early August (for more details, see our prior post and our podcast). Multiple stakeholders expressed concerns with the proposed regulations during the public comment period, which ended August 31, 2023. In response to these comments, OHCA has published revised proposed regulations (Revised Regulations) allowing for an abbreviated comment period that ends October 17, 2023. The Revised Regulations are available here.

Many health care entities with assets or operations in California will face advance regulatory review of transactions by the state’s new Office of Health Care Affordability early next year. Mintz Members Lara Compton, Daniel Cody, and Kathryn Edgerton discuss the emergency rulemaking process, proposed regulations requiring pre-closing notice of deals, and key considerations for health organizations.

Listen to our team discuss key takeaways from the weeklong summit and how industry trends are impacting business practices.

Health regulatory diligence has the ability to make or break a deal. Listen to hear about our team’s firsthand experience in the importance of conducting health regulatory diligence and best practices in preparing for a sell-side transaction.

2021 was a busy year for Mintz ’s Health Law team, as they helped clients navigate complex health care transactions.

On September 15, 2021, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a favorable Advisory Opinion regarding a hospital’s proposal to implement a program through which patients who experience complications after specific joint replacement procedures can receive free items and services to treat the complications. The OIG likened the program to a warranty for joint replacement procedures.