A bill introduced in the 2024 New York State Executive Budget would require regulatory review for certain physician practice and management service organization transactions.
According to a Feb. 8 article in JDSupra by law firm Holland & Knight, the bill is spurred by an increase in physician practices managed by investor-backed entities that could have a negative impact on healthcare costs and access. The bill targets private practice acquisitions and MSO- and private equity-backed transactions.
If passed, the state Department of Health would have the authority to review and approve MSO mergers, acquisitions, affiliations and investments involving physician practices.
MSOs would need to submit a written notice and application for consent to the department at least 30 days before the expected closing date. If the department does not act on the application within the 30-day period, the transaction would be deemed approved.
Applicants would also be required to disclose any plans to eliminate services in plan networks, identify the revenue generated at each practice and provide a description of the purpose of the transaction. Additionally, like many certificate-of-need policies, the bill allows for public comment.
If passed, the law is "bound to have a significant impact on healthcare transactions in New York," according to the article. "Physicians and management services organizations, whether or not private equity-backed, that have long enjoyed entering into business relationships without regulatory scrutiny will be obligated to undergo a detailed review process."
The bill is expected to face "formidable opposition," the article added.