In January 2026, Holland & Knight’s Healthcare Blog summarized several notable healthcare-related proposals in New York Gov. Kathy Hochul’s fiscal year (FY) 2026-27 Executive Budget. These included expanded oversight of material healthcare transactions, transferring physician and physician assistant (PA) oversight from the State Education Department (SED) to the Department of Health (DOH), expanding PA independent practice authority and establishing a new joint licensing framework for integrated behavioral health services. None of these proposals were included in the final enacted budget.
Expansion of Disclosure of Material Transactions Law: Not Enacted
For the second consecutive year, Gov. Hochul’s proposed amendments to Public Health Law Article 45-A (Disclosure of Material Transactions) failed to advance. As we previously reported, the proposal would have introduced significant new requirements, including:
additional pre-closing disclosures regarding facility closures, service reductions and financing arrangements
five-year post-closing reporting on cost, quality, access, health equity and competition metrics
authority for DOH to conduct cost and market impact reviews (CMIR) for transactions valued at $100 million or more, potentially delaying closing by up to 180 days
authorization for DOH to use submitted information as evidence in investigations or attorney general actions
The continued failure of the proposal reflects the ongoing tension between the Hochul Administration’s stated goal of understanding how healthcare transactions affect cost, quality, access and competition, and concerns that the proposal would impose significant administrative burdens on buyers and sellers without establishing clear enforcement mechanisms. Notably, the proposed five-year post-closing reporting requirement could have provided DOH with longitudinal data to assess whether transactions, particularly those involving third-party practice management companies, produce the types of negative outcomes the law was designed to detect. Without that data, the current disclosure framework remains largely procedural: It requires notice of covered transactions but provides DOH with limited means to assess broader market trends or respond to them over time.
PA Practice Authority: Not Enacted
Gov. Hochul’s proposal to permanently codify COVID-era measures expanding PA practice authority also did not advance. The proposal would have allowed PAs to practice independently, without physician supervision, after completing more than 8,000 hours of practice in the same or substantially similar specialty. One likely factor was opposition from physician advocacy groups such as the Medical Society of the State of New York and the New York State Academy of Family Physicians, both of which argued that the PA profession (unlike the nurse practitioner profession) has historically been grounded in a team-based model tied to physician supervision.
Integrated Behavioral Health Services: Not Enacted
The proposed legislation to establish a new joint licensing framework for programs providing integrated mental health and substance use disorder treatment was not included in the final budget. Under the proposal, those programs would have been jointly overseen by the Office of Mental Health (OMH) and Office of Addiction Services and Supports (OASAS). The legislation would have created unified oversight, comprehensive regulatory standards, a single enforcement process and specific provider eligibility requirements for integrated behavioral health programs. Although OMH and OASAS appeared to support integrated care in principle, aligning their distinct regulatory frameworks may simply have proven too complex.
Transitioning Professions from SED to DOH: Not Enacted
The governor’s proposal to eliminate New York’s split regulatory framework, under which SED handles physician and PA licensure while DOH handles professional misconduct, also was not included in the final budget. The proposal would have transferred oversight of physicians, PAs and specialist assistants, including licensure, professional discipline and the formation of professional entities, from SED to DOH effective January 1, 2027.
Looking Ahead
The failure of these four proposals for a second or subsequent budget cycle suggests that significant structural changes to healthcare regulatory oversight in New York continue to face legislative headwinds. Whether the Hochul Administration renews these efforts in next year’s budget or through standalone legislation remains to be seen. Holland & Knight will continue to monitor developments and provide updates as New York’s healthcare regulatory landscape evolves.