New York’s Expanded Health Care Transaction Oversight Bill Fails for the Second Consecutive Year

On May 28, 2026, New York State (NYS) Governor Kathy Hochul signed legislation enacting the State Fiscal Year (SFY) 2026–2027 budget into law. The final enacted budget did not include amendments to New York’s health care transaction law (the Material Transaction Law),¹ which Governor Hochul had previously proposed and which would have significantly expanded the NYS Department of Health’s (DOH) oversight of health care transactions in the state. This failure to expand the Material Transactions Law follows a similar attempt by Governor Hochul in last year’s enacted budget for SFY 2025-2026, as discussed in our prior Alert.

Governor Hochul introduced proposed amendments to the Material Transaction Law to “ensure that New Yorkers can continue to access affordable, high-quality and equitable care for the long term.”² The Material Transaction Law currently requires health care entities to submit 30-days’ advance notice to DOH of material transactions but does not provide DOH with express review or approval rights, making it the only state health care transaction law that does not grant the state any form of review and approval authority over transactions. The proposed amendments would have aligned New York’s Material Transaction Law more closely with transaction laws in other states (e.g., California, Massachusetts, and Oregon) that contain more prescriptive review and approval of material transactions. See HealthTrax Map.

To that end, the proposed amendments would have expanded the existing Material Transaction Law to provide the following:

1. Grant DOH authority to conduct a preliminary review of up to 30 days for all notices received and to determine whether to initiate a more comprehensive cost and market impact review of up to an additional 180 days,
2. Require transacting parties to include information in the notice about closures or substantial service reductions at health care entities owned by parties to the transaction in the preceding three years, as well as any sale-leaseback agreements or mortgage, lease, or real estate payments associated with the proposed transaction, and
3. Impose a five-year post-closing annual reporting obligation to assess a transaction’s impact on cost, quality, access, health equity, and competition.

While the proposed amendments were not ultimately included in the final budget legislation, Governor Hochul’s proposal demonstrates the state’s continued interest in expanding the scope of New York’s Material Transaction Law. It also offers a preview of potential changes that could be pursued outside the budget process, as New York has also sought to strengthen the reach of its health care transaction law through other avenues, such as the issuance of new regulations or sub-regulatory guidance, and a new, more expansive notice form.³ Given this continued interest in expanding regulatory oversight, health care entities and investors considering transactions in New York should continue to monitor developments in the state closely.