An increasing number of states have recently enacted healthcare transaction review laws (“TRLs”). These laws reflect a decisive shift in state health policy. Transactions that historically fell within the domains of corporate law, regulatory licensure transfer oversight, and federal antitrust enforcement are now subject to independent state-level review regimes that often require advance notice; extended waiting periods; and, in some jurisdictions, affirmative pre-closing approval.
These new TRL transaction approval processes, particularly the laws that require pre-closing approval, are more akin to historical certificate of need (“CON”) reviews with new additional review elements. The more intensive processes are designed to take a global view of the effect the transaction might have on the provision of healthcare in a particular state by assessing issues such as cost, quality, access, competition, and health equity.
While healthcare has long been highly regulated, the emergence of TRLs represents not merely incremental oversight, but a structural reconfiguration of regulatory authority over healthcare mergers and acquisitions. In effect, states with TRLs have positioned themselves as gatekeepers of healthcare consolidation, particularly where investor-backed entities, management services organizations (“MSOs”), and complex ownership structures are involved.
This article summarizes how TRLs are structured and examines the additional regulatory burden they impose on transacting parties.
Pre-Closing Notice or Approval as a New Burden
The most immediate and tangible burden imposed by TRLs is procedural, involving mandatory advance notice; prolonged waiting periods; and, in some states, pre-closing approval requirements. Several states—such as California,[1] Minnesota,[2] Massachusetts,[3] New Mexico,[4] New York,[5] Oregon,[6] Illinois, and Nevada[7]—have enacted laws requiring either pre-closing notice or pre-closing approval.
Other states, including Massachusetts, have enacted legislation introducing more rigorous measures that will lengthen the review process and potentially delay transactions, such as broadening the scope of the Health Policy Commission Cost and Market Impact Review (“CMIR”) process.[8] Additionally, Rhode Island has promulgated regulations establishing “lack of notification” penalties to ensure compliance.[9]
These new requirements are often in addition to existing processes related to changes of ownership for a CON, license, or provider number. In many cases, TRL processes represent a significant increase in regulatory burdens compared to existing CON or licensure requirements, extending review periods and necessitating more detailed disclosures. TRL processes also impose substantial additional costs on the buyer, including expenses for market studies, external legal counsel, and consultants, none of which may have otherwise been incurred.
Transactions that previously did not involve executory periods—such as certain mergers or acquisitions of physician groups or MSOs—now often do. Overall, in states with TRLs, the time frame from signing to closing has lengthened, in some cases substantially, ranging from 30 to 180 days for notice[10] and up to 215 days if a CMIR is initiated.[11]
Materiality and the Types of Transactions Subject to TRLs
TRLs generally apply to “material transactions” or “material changes,” which are broadly defined to capture transactions deemed significant enough to warrant regulatory oversight. This includes mergers, acquisitions, asset or ownership transfers, changes of control, revenue-sharing arrangements, the formation of new healthcare entities, and real-estate sale-leasebacks that affect healthcare operations. Many states also treat a series of related transactions occurring within a defined period—such as five years—as a single transaction subject to review.[12] Covered entities can include hospitals, hospital systems, group practices, MSOs, provider-sponsored organizations, health insurance plans, and other affiliated healthcare organizations.
In many states, specific financial thresholds determine which transactions trigger notice or review—for example, $10–$80 million in Minnesota[13] and $25 million in gross revenues in New York.[14] Special scrutiny is often given to private-equity-backed transactions, MSOs, and real estate investment trust (“REIT”) deals, with additional notice, approval, or operational requirements imposed when hedge funds, private equity firms, or similar investors are involved.[15]
At the same time, certain transactions are exempt from TRLs, including those below statutory financial thresholds: for example, California requires notice only for entities meeting specific revenue or asset thresholds,[16] and Connecticut requires notice only for “material changes” that significantly alter a group practice’s business or structure.[17] Routine contracts or internal restructurings are generally excluded, as in Minnesota, which exempts corporate restructurings, mortgages, secured loans, clinical trial affiliations, and employment contracts,[18] and Nevada, which excludes transactions between entities under common ownership or with preexisting relationships.[19] Other states, such as Indiana, exclude practitioner-owned providers majority-owned by licensed in-state practitioners,[20] and nonprofit relief exists in California under certain circumstances.[21]
Comprehensive Scope of Review
The Model Act for State Oversight of Proposed Health Care Mergers, developed by the National Academy for State Health Policy and updated in 2024, provides a harmonized framework for reviewing healthcare transactions.[22] Many states have incorporated its concepts, emphasizing transparency, corporate changes of control, service line closures, prohibitions of physician non-competes, and private equity oversight.
In general, most TRLs examine a wide range of factors aligned with public policy objectives, including market concentration and competition, transaction history, pricing and cost trends, service quality and patient experience, accessibility and equity, obligations to underserved or government-payer populations, provision of low-margin essential services, consumer protection, compliance with prior regulatory conditions, clinical workforce impacts, financial effects of real-estate arrangements, and the consequences of facility closures.[23]
As previously discussed, notice and pre-closing requirements vary by state, and disclosure obligations can be extensive, including ownership and control party identification, organizational charts, ownership structures, operational and financial data, transaction agreements, and supporting economic analyses.
Many TRLs provide for public participation through hearings, comment periods, and post-closing reporting to promote transparency—for example, Oregon may hold public hearings,[24] Indiana publishes ownership information annually,[25] and New York posts transaction summaries thirty days before closing.[26]
Enforcement mechanisms include civil penalties, investigations, injunctions, and, in some cases, the authority to block or unwind transactions, although most TRLs restrict enforcement to government authorities and do not confer private rights of action.
Practical Concerns and Conclusion
State healthcare TRLs mark a fundamental shift in the governance of healthcare markets. Through mandatory pre-closing notice or approval, expansive definitions of material transactions, scrutiny of control arrangements, extensive disclosure requirements, and post-closing oversight, states have assumed an intensified gatekeeping role over healthcare consolidation.
From a practical perspective, drags on transaction timing can further deal fatigue and result in additional issues between transacting parties and even busted deals. Beyond the procedural hurdles, these processes also impose additional costs on buyers, which might translate into valuation adjustments, purchase price reductions, or shifts in deal structure as buyers seek to reallocate the regulatory risk or to preserve expected returns. Moreover, the intrusiveness of required disclosures regarding ownership and control structures may discourage parties from pursuing transactions in TRL states altogether. The imposition of post-closing conditions or the possibility of such imposition can lead to additional pre-signing and pre-closing negotiations between the parties about the implications of such conditions. In certain cases, buyers may look to negotiate force majeure–type outs relating to the imposition of significant conditions due to a change in buyer expectations.
It’s clear that for transacting parties, these laws introduce substantial procedural and substantive burdens. For scholars and policymakers, they present a compelling case study in regulatory evolution—where state governments respond to perceived gaps in federal oversight by constructing parallel and sometimes broader regimes of transaction control.
Healthcare transactions in TRL states are no longer governed solely by corporate law, licensure and CON frameworks, and federal antitrust doctrine. There is now a broader, layered state regulatory architecture that reflects an increasingly interventionist conception of the public interest in healthcare markets.
Cal. Health & Safety Code § 127507(c)(2) (West 2025). ↑
Minn. Stat. § 145D.01, subdivs. 2(b)–(e), 5(a)–(c) (2025) (establishing a minimum sixty‑day notice period for material health-care transactions, allowing the attorney general to extend the review period by up to ninety days and authorizing the attorney general to seek injunctive or equitable relief, including modification or unwinding of a transaction that violates statutory requirements or threatens the public interest). ↑
Mass. Gen. Laws ch. 6D, § 13(a) (2025). ↑
Health Care Consolidation Oversight Act, N.M. Health Care Auth. (2025) (showing that once a complete notice of a proposed health-care transaction is filed, the authority has a 120‑day review deadline to act). ↑
N.Y. Pub. Health Law § 4552(1) (McKinney 2024) (§ 4552 requires notice to the Department of Health at least thirty days before closing of a material transaction and forwarding of the notice to the attorney general; it does not authorize pre‑closing approval). ↑
Or. Admin. R. 409‑070‑0030(2) (2025). ↑
Nev. Rev. Stat. § 598A.390 (2024); id. § 439A.126. ↑
Material Change Notices and Cost and Market Impact Reviews, Mass. Health Pol’y Comm’n (2025). ↑
R.I. Code R. § 110-30-00-5.5.6OK. ↑
Cal. Health & Safety Code § 127507(c)(2) (West 2025); Conn. Gen. Stat. § 19a‑486i(c) (2024); Or. Admin. R. 409‑070‑0030(2). ↑
Material Change Notices and Cost and Market Impact Reviews, supra note 8. ↑
Colo. Rev. Stat. § 6‑19‑102(1) (2024). ↑
Minn. Stat. § 145D.02, subdiv. 4(b) (2024). ↑
N.Y. Pub. Health Law § 4550(4)(b) (McKinney 2024). ↑
Cal. Assemb. 1415, § 4, 2025–2026 Reg. Sess. (amending Cal. Health & Safety Code § 127507(c)(2)(A), (h)); S.B. 1998, 104th Gen. Assemb., Reg. Sess. (Ill. 2025) (proposing to amend 740 Ill. Comp. Stat. 10/7.2a); Mass. Gen. Laws ch. 6D, § 11, amended by 2025 Mass. H.R. 5159; Or. Rev. Stat. § 441.510(2)(a), amended by 2025 Or. S. 951 (enrolled). ↑
Cal. Code Regs. tit. 22, § 97435(b)–(c) (2025) (material change transactions). ↑
Conn. Off. of Health Strategy, Notice of Material Change, CT.gov (last visited Dec. 16, 2025). ↑
Minn. Stat. § 145D.01, subdiv. 1(k) (2025). ↑
Nev. Rev. Stat. § 598A.370(2) (2025). ↑
Ind. Code § 25‑1‑8.5‑2 (2025), amended by Ind. H.R. 1666, § 9 (2025); see also Ind. H.R. 1666, § 9 (2025). ↑
Cal. Corp. Code § 5914(c) (West 2025). ↑
Nat’l Acad. for State Health Pol’y, Comprehensive Consolidation Model Addressing Transaction Oversight, Corporate Practice of Medicine and Transparency (Nov. 2021; updated July 26, 2024). ↑
Id. ↑
Or. Admin. R. § 415.501 (15) (2024). ↑
Ind. H.R. 1666, § 35(a)(2). ↑
N.Y. Pub. Health Law § 4552(2)(b) (McKinney 2024). ↑
