On February 5, 2026, the Massachusetts Health Policy Commission (the “HPC”) released its long-awaited amended regulation to 958 CMR 7.00 (the “Proposed Amended Regulation”) to align the existing regulation with the changes enacted pursuant to Chapter 343 of the Acts of 2024, An Act Enhancing the Market Review Process, (the “Act”). As discussed in our prior Alert, the Act expands the HPC’s existing oversight of for-profit investments in health care, and the Proposed Amended Regulation would further clarify the scope of transactions subject to such oversight.
The Proposed Amended Regulation clarifies the scope of entities and transactions subject to review by the HPC and specifically defines a monetary threshold for transactions triggering a change of control, codifying current HPC guidance. Stakeholders involved in health care transactions in Massachusetts should carefully review the Proposed Amended Regulation (available here) and consider its potential implications for deal structuring and timelines.
We highlight the key proposed changes and implications of such changes below. Terms not otherwise defined refer to the definitions in the Proposed Amended Regulation.
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1. Clarification of Scope of Covered Transactions. The Proposed Amended Regulation revises the categories of transactions triggering a material change notice (“MCN”) consistent with the Act. Additionally, the Proposed Amended Regulation includes a few changes that are not specifically contemplated by the Act but that codify prior HPC guidance.
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Transactions Involving Significant Equity Investors: The Act expanded the definition of material change to include transactions involving a Significant Equity Investor that result in a change of control of a Provider or Provider Organization. The Act did not define “Control,” and while the HPC previously stated in guidance that “control” related to “significant control,” the Proposed Amended Regulation clarifies that such transactions may be “partial or complete” changes of ownership or control, and includes changes of ownership or control of Management Services Organizations (“MSO”).
Specifically, “Control” is defined to include possession, direct or indirect, of the power (partial or complete) to direct or cause the direction of the management, administrative functions, assets, or policies of an entity, whether through the ownership of voting securities or rights, the power to appoint or remove board members or directors, or control by contract. Control is deemed to exist if any person or entity directly or indirectly owns, has rights over, or holds with the power to vote ten percent (10%) or more of the voting securities of an entity. If adopted, the HPC approach to “control” would be more expansive than some other state health care transaction laws, such as California or Oregon.1
- Transactions Involving MSOs. More generally, the Proposed Amended Regulation codifies prior HPC guidance regarding MSOs (see prior Alert regarding such guidance) to specifically reference MSOs in the types of transactions triggering notification requirements, including contract affiliations for establishing contracts with a carrier or third-party administrator, employment of health care professionals, or formation of MSOs. Currently, MSOs are captured under the law only to the extent an MSO falls within the definition of Provider Organization.
- Clinical Affiliations. The Proposed Amended Regulation codifies the HPC’s guidance regarding the types of clinical affiliations that trigger notice to include transactions that involve co-branding; co-located services; complete or substantial staffing of an acute hospital service line; the provision of funds to establish or enhance electronic health record interconnectivity; establishment of a preferred provider relationship; regular and ongoing provision of telemedicine services; and establishment of a discount arrangement.
- Pharmacy Transactions. The Proposed Amended Regulation adds “pharmacy services” to the definition of “Health Care Services.” Under the existing regulations, the definition of Health Care Services includes various medical, behavioral health, hospital, and other clinical services, but does not expressly reference pharmacy. The addition of pharmacy services expands the type of transactions subject to review to include pharmacy transactions.
- Transactions Involving Out-of-State Entities. The Proposed Amended Regulation clarifies existing guidance and expands the scope of covered transactions to expressly include affiliations involving Providers and Provider Organizations and entities representing out-of-state health care Providers. Under the proposed changes, acquisitions, mergers, corporate affiliations, contracting affiliations for establishing contracts with a carrier or third-party administrator, or employment of health care professionals would trigger notice requirements if such affiliation involves an entity that represents out-of-state Providers and results in an increase in annual net patient service revenue equal to or greater than the revenue increase threshold (defined as $10 million as of April 16, 2026, but subject to annual adjustments). This change clarifies that entities operating across state lines may be subject to HPC oversight even if the out-of-state entity is not itself licensed in Massachusetts.
2. Cost and Market Impact Reviews. Consistent with the current process, the Proposed Amended Regulation codifies the grounds for conducting a cost and market impact review (“CMIR”) by specifying that a CMIR could be ordered if the HPC finds that the material change is likely to have a significant impact on the Commonwealth’s ability to meet the health care cost growth benchmark or on the competitive market. In addition, the HPC would have the ability to conduct a CMIR on any Provider Organization whose percentage change in total health care expenditures exceeded the health care cost growth benchmark in the previous calendar year, as determined by the Centers for Health Information and Analysis.
The Proposed Amended Regulation also provides for new factors that the HPC may consider when conducting a CMIR, including:
- The size and market share of any Corporate Affiliates or Significant Equity Investors of the Provider or Provider Organization;
- The inventory of health care resources maintained by the Department of Public Health; and
- Any related data or reports from the Office of Health Resource Planning.
3. Technical and Procedural Updates. The Proposed Amended Regulation also contemplates various technical updates, such as:
- Clarifying that MCN filings are not deemed complete if any party to the transaction is out of compliance with the Registration of Provider Organizations filing requirements under 958 CMR 6.00.
- Establishing that the MCN Filing Threshold is $25 million, and the Revenue Increase Threshold is $10 million as of April 16, 2026, with annual adjustments for health care inflation. This is a shift from the current process, which is a static threshold.
- Providing that the HPC may refer parties to the Attorney General for failing to file an MCN.
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The Proposed Amended Regulation was discussed at the HPC’s meeting on February 5, 2026; meeting presentation materials can be found here. The HPC will host a virtual public hearing to discuss the Proposed Amended Regulation on Thursday, March 12, and public comments will be accepted through Friday, March 20. Following the public comment period, the HPC will vote on adopting the final regulations at its April 16 board meeting. Stakeholders should closely monitor the rulemaking process as the HPC considers feedback and finalizes the Proposed Amended Regulation. Parties contemplating transactions in Massachusetts should work closely with counsel to evaluate whether the Proposed Amended Regulation may affect deal structure, timelines, or regulatory strategy.
