Healthcare Transaction Review Laws
As government oversight over the U.S. healthcare industry continues to grow, healthcare transaction review laws at the state level have become an increasingly popular tool to regulate the health care market. Over the last few years, numerous states have implemented healthcare transaction review laws that typically require healthcare entities and, in many cases, private equity, insurers, and upstream owners, to provide pre-closing notice regarding “material” healthcare transactions to government agencies. These laws differ from the typical change of control processes that often apply to licensed healthcare facilities and providers. For example, they generally apply broadly to “healthcare entities” regardless of licensure, and therefore apply to organizations such as physician practices that often do not require separate licensure. Furthermore, the reviews are more substantive in nature, often focusing the impact of proposed transactions on factors such as cost, quality, access, equity, and competition. The Sidley Healthcare team has closely tracked these laws as enacted, and we anticipate that more states will follow suit.
Healthcare transaction review law requirements vary significantly between states. Some require notice, while others may require a cost and market impact review (“CMIR”). Several of the laws require disclosure of upstream and indirect ownership interests to government agencies. As these healthcare transaction review laws may affect the structure and timing of proposed transactions, we have developed the resource below to highlight key features of the current landscape.
This webpage serves as an informational resource only, and does not constitute legal advice. Please contact the Sidley Healthcare team or the Sidley lawyer with whom you usually work for the most up to date information and analysis regarding these state healthcare transaction review laws.
Notice with CMIR
Overview
Effective through December 31, 2025: Any impacted health care entity in California must notify the Office of Health Care Affordability (OHCA) of a “material change transaction” at least 90 days before closing.
Effective January 1, 2026: Any impacted health care entity in California must notify the Office of Health Care Affordability (OHCA) of a “material change transaction” at least 90 days before closing. Noticing entities are required to report a subset of transactions.
Health Care Entities
Effective through December 31, 2025: Includes payors, providers, physician organizations, service plans, third-party administrators, and PBMs
Effective January 1, 2026: Includes payors, providers, physician organizations, service plans, third-party administrators, PBMs, and “noticing entities”, which are (1) hedge funds, (2) private equity funds, (3) MSOs, (4) new business entities “created for the purpose of entering into agreements or transactions with a health care entity,” and (5) entities that own, operate, or control a healthcare provider.
Insurers
Applies to health insurers (but transactions subject to the review of the California Department of Insurance or California Department of Managed Health Care are exempt)
Upstream Owners
Effective through December 31, 2025: Includes upstream owners of health care entities
Effective January 1, 2026: Includes upstream owners of health care entities and entities that own MSOs
One-Sided or Two-Sided
Only one party must be a health care entity.
Impacted Transactions
Mergers, acquisitions, and agreements transferring assets
Materiality Threshold
Eight different circumstances qualify as “material” changes, including (i) the purchase price is at least $25M or more; (ii) the transaction involves a 25% or more change of control of the health care entity; or (iii) the transaction involves a change of governance of the health care entity. There also must be an impact on the provision of health care services in California.
Cost and Market Impact Review
Yes. State may find that a cost and market impact review (“CMIR”) is needed.
Timing
Generally a 90-day pre-closing notice requirement, which may be extended if the state agency conducts a CMIR.
Public Disclosure
Information such as the entities’ governance and ownership structures will be publicly disclosed.
Notice Only
Overview
Any impacted health care entity in Connecticut must notify the state Attorney General of a material change transaction at least 30 days before closing
Health Care Entities
Group practices, hospitals, and hospital systems
Insurers
Does not apply to health insurers
Upstream Owners
Does not include upstream owners of health care entities
One-Sided or Two-Sided
Both parties in the transaction must be an health care entity
Impacted Transactions
Mergers, acquisitions, and employment of all or substantially all physicians in a group practice
Materiality Threshold
None
Cost and Market Impact Review
No
Timing
30-day pre-closing notice requirement
Public Disclosure
Filings posted to Office of Health Strategy website within 30 days post-closing
Notice Only
Overview
Any impacted health care entity in Illinois must notify the state Attorney General’s Office of any merger, acquisition, or contracting affiliation at least 30 days prior to closing.
Health Care Entities
Healthcare facilities and provider organizations
Insurers
Does not apply to health insurers
Upstream Owners
Does not include upstream owners of these entities
One-Sided or Two-Sided
Both parties in the transaction must be health care entities
Impacted Transactions
Covers mergers, acquisitions, and contracting affiliations
Materiality Threshold
There are no revenue thresholds unless the health care entity is out-of-state. Then the transaction must generate at least $10M in annual revenue from IL patients.
Cost and Market Impact Review
No
Timing
30-day pre-closing notice requirement; state agency may request additional information within 30 days of receiving notice and the transaction may not proceed during this time.
Public Disclosure
No public disclosure requirement
Notice Only
Overview
Any impacted health care entity in Indiana must notify the Office of the Attorney General of any merger or acquisition at least 90 days prior to closing.
Health Care Entities
Include medical, surgical, dental, and rehabilitative service providers, insurers, administrators, PBMs, and private equity partnerships
Insurers
Applies to health insurers that issue certain types of accident and health insurance policies
Upstream Owners
Notice required for indirect acquisitions of health care entities, with one being an Indiana health care entity
One-Sided or Two-Sided
Both parties in the transaction must be health care entities.
Impacted Transactions
Mergers and acquisitions
Materiality Threshold
At least one entity must be an IN entity and entities must have a combined $10M+ in assets, including assets located outside of IN
Cost and Market Impact Review
No. But, the Office of the Attorney General may issue a civil investigative demand (“CID”) for additional information and may prepare a written analysis of any antitrust concerns with the transaction.
Timing
90-day pre-closing notice requirement, which may be extended if the state agency issues a CID
Public Disclosure
Information submitted to the state agency will be kept confidential.
Notice with CMIR
Overview
Any impacted health care entity in Massachusetts must notify the state Attorney General, the Center for Health Information and Analysis, and the Health Policy Commission of any material change transaction at least 60 days prior to closing.
Health Care Entities
Applies to hospitals, and providers of healthcare services including medical, behavioral health, dental, rehabilitative, and geriatric services
Insurers
Applies to transactions involving a provider or provider organization and an insurer
Upstream Owners
Notice required for indirect changes of control of health care entities, and State may request documents directly from upstream owners
One-Sided or Two-Sided
Only one party must be an health care entity for certain transactions
Impacted Transactions
Covers mergers, acquisitions, affiliations, and formations of partnerships and joint ventures that would result in a health care entity having a dominant market share, significant capacity expansions, changes of control of a health care entity involving private equity or significant equity investors, real estate sale lease-back arrangements, and conversions from a non-profit entity to a for-profit entity
Materiality Threshold
At least one entity has $25M+ in annual revenue from patient care
Cost and Market Impact Review
Yes. State may find that a cost and market impact review (“CMIR”) is needed. State may also require post-transaction document submissions for a period of 5 years post-closing.
Timing
60-day pre-closing notice requirement, which may be extended if the state agency determines a cost and market impact review is needed
Public Disclosure
Notices posted to the state agency website
Notice Only
Overview
Any impacted health care entity in Minnesota must notify the state Attorney General’s Office and Commissioner of Health of any covered transactions at least 30 or 60 days prior to closing depending on the size of the parties.
Health Care Entities
Hospitals, provider group practices, professional entities, and medical foundations
Insurers
Does not apply to health insurers
Upstream Owners
Includes upstream and downstream owners of health care entities
One-Sided or Two-Sided
Only one party in the transaction must be an health care entity
Impacted Transactions
Covers mergers, acquisitions, and other transfers of control
Materiality Threshold
Over $10M in average annual revenue
Cost and Market Impact Review
No
Timing
60-day pre-closing notice if the entity has $80M+ in average annual revenue and 30-day reporting requirement if the entity has between $10-$80M in average annual revenue
Public Disclosure
No public disclosure requirement
Notice Only
Overview
Any impacted health care entity in Nevada must notify the state Attorney General of any covered transactions at least 30 days prior to closing .
Health Care Entities
Group practices and insurers
Insurers
Applies to health insurers
Upstream Owners
Notice required for indirect changes in control of health care entities
One-Sided or Two-Sided
Only one party in the transaction must be an health care entity for certain transactions
Impacted Transactions
Mergers, acquisitions, and affiliations
Materiality Threshold
Transaction results in the group practice or insurer to provide 50% or more of any health care service or specialty within a geographic market. Notice requirement satisfied if an HSR filing was submitted for the transaction and a copy is filed with the state Attorney General.
Cost and Market Impact Review
No. But, the Office of the Attorney General may issue a civil investigative demand (“CID”) for additional information.
Timing
30-day pre-closing notice requirement
Public Disclosure
All information regarding the transaction will be kept private.
Notice and Approval
Overview
Any impacted health care entity in New Mexico must notify the state Health Care Authority of any transaction impacting a health care entity at least 120 days prior to closing.
Health Care Entities
Applies to hospitals and provider entities that contract with health insurers for payment for health care services in New Mexico and are owned by or affiliated with a health insurer
Insurers
Applies to health insurers (notice must be submitted as an addendum to any filing required under the New Mexico Insurance Code)
Upstream Owners
Notice required for indirect acquisitions, affiliations, and changes in control
One-Sided or Two-Sided
Only one party must be a health care entity
Impacted Transactions
Mergers of a hospital with a hospital or entity controlling a hospital, acquisitions of a hospital or entity controlling a hospital, changes in control of a hospital and/or real estate upon which a hospital is located, acquisitions of provider entities by health insurer-owned or affiliated provider entities
Materiality Threshold
None
Cost and Market Impact Review
No. However, the state may also require post-transaction document submissions annually for a period of 3 years post-closing.
Timing
120-day pre-closing notice and approval requirement, with the potential to be completed in 30 days if only preliminary review is determined to be required
Public Disclosure
Certain information regarding the proposed transaction will be publicly disclosed.
Notice Only
Overview
Any impacted health care entity in New York must notify the New York Department of Health of any covered transactions at least 30 days prior to closing.
Health Care Entities
Includes physicians, healthcare facilities, and MSOs
Insurers
Does not apply
Upstream Owners
Notice required for indirect changes in control of health care entities
One-Sided or Two-Sided
Only one party must be an health care entity for certain transactions
Impacted Transactions
Mergers, acquisitions, and formations of partnerships and joint ventures
Materiality Threshold
A health care entity must provide notice if it engages in a transaction that would increase its total gross in-state revenues by $25M+.
Cost and Market Impact Review
No
Timing
30-day pre-closing notice requirement
Public Disclosure
Certain Information regarding the proposed transaction will be publicly disclosed.
Notice with CMIR
Overview
Any impacted health care entity in Oregon must notify the Oregon Health Authority of material health care transactions at least 30 days prior to closing.
Health Care Entities
Includes providers, hospitals, insurers, coordinated care organizations, and other entities that provide healthcare items or services
Insurers
Applies to health insurers (that issue health benefit plans), HMOs and Medicare Advantage plans
Upstream Owners
Includes upstream owners of health care entities
One-Sided or Two-Sided
Only one party must be an health care entity for certain transactions
Impacted Transactions
Mergers, acquisitions, affiliations, and formations of partnerships and joint ventures
Materiality Threshold
One party must have $25M+ in average annual revenue and the other party had or is projected to have $10M+ in average annual revenue.
Cost and Market Impact Review
Yes. State may find that a comprehensive market review of the transaction is needed.
Timing
180-day pre-closing notice requirement, with the potential to be completed in 30 days if only preliminary review is determined to be required
Public Disclosure
Information such as transaction notices and reviews will be publicly disclosed.
Notice Only
Overview
Any impacted health care entity in Washington must notify the state Attorney General of material transactions at least 60 days prior to closing.
Health Care Entities
Hospitals and provider organizations
Insurers
Does not apply to health insurers
Upstream Owners
Includes upstream owners of health care entities
One-Sided or Two-Sided
Both parties in the transaction must be health care entities
Impacted Transactions
Mergers, acquisitions, and contracting affiliations
Materiality Threshold
There are no revenue thresholds unless the transaction involves an out-of-state entity. Then the transaction must generate $10M+ million in revenue from WA patients.
Cost and Market Impact Review
No
Timing
60-day pre-closing notice requirement, state agency may request additional information within 30 days of receiving notice
Public Disclosure
No public disclosure requirement
