New Jersey: A Healthcare Overview

Recent Developments in the New York and New Jersey Healthcare Transaction Landscape

The New Jersey and greater New York City healthcare market is experiencing significant activity and structural change. The Federal Reserve’s rate cuts in the back half of 2025 lowered the cost of capital and reopened pathways for leveraged transactions. While interest rates remain structurally higher than pre-2022 levels, the improved rate environment is expected to continue supporting deal momentum through 2026. The federal “One Big Beautiful Bill Act,” signed into law in July 2025, introduced business-friendly tax incentives including restored bonus depreciation, further enhancing the after-tax economics of healthcare investments.

2026 has seen robust acquisition, consolidation and development activity across healthcare practices and facilities. Healthcare professionals and entrepreneurs are seeking stability amidst increasing regulatory and payor scrutiny and to capture referral sources as healthcare systems monopolize local markets. Many providers are consolidating into supergroups or affiliating with major hospital systems and “roll-up” aggregators, whether independent or private equity-backed. Others are opting out, maintaining strict out-of-network status or focusing on private-pay specialties. Payer contract negotiations have become increasingly difficult, with closure of panels, rising claim denials and tightening fee schedules straining cash flow across practices of all sizes.

Pharmacy transactions are rising as independents contend with declining reimbursements and predatory PBM practices. Governmental investigations by boards of pharmacy, Medicaid, the DEA and the DOJ continue to be spurred by PBM referrals, with some agencies criminalizing pharmacy structures that PBM-related pressures forced into existence.

The management services organization (MSO) model remains the primary vehicle for unlicensed investors to acquire practices. However, the model’s growing prevalence is attracting scrutiny, with states and payors examining whether MSOs circumvent CPOM laws through “friendly provider” arrangements where the MSO exercises de facto control over a nominally provider-owned practice.

Non-MD healthcare entrepreneurs remain active across urgent care, ASCs, home healthcare, imaging, pharmacy, medspas, laboratories and DME. Recent deal activity has included large-scale healthcare facility acquisitions encompassing both real estate and hospital assets. The ASC sector continues to grow. More than 80% of surgeries are now outpatient. The DME sector saw meaningful growth but also a CMS moratorium on new Medicare applications driven by fraud and abuse concerns.

Federal and state regulators are examining private equity consolidation of healthcare assets. The value-based care safe harbors that took effect in 2021 remain operative, but 2025 brought increased enforcement scrutiny over whether value-based enterprises serve a legitimate purpose or function as vehicles for productivity-based compensation. State-level transaction review and ownership transparency requirements are lengthening deal timelines.

Changes in the Regulatory Landscape

Post-COVID-19 pandemic, the regulatory picture is uneven. New York now permits controlled substance prescribing via telehealth without an in-person evaluation. New Jersey has gone in the other direction, restoring the requirement for an initial in-person examination for Schedule II CDS, even as the federal government maintains more permissive rules.

APN independence is expanding. Pending New York legislation may make permanent the pre-pandemic expansion to full practice authority for experienced APNs. New Jersey has eliminated selective restrictions for APNs in primary and behavioral healthcare, though restrictions remain for general obstetrics and elective cosmetic services.

Federal scrutiny of gray market peptides has intensified. The FDA has issued aggressive warning letters to compounders and clinics marketing peptide products for human use. The DOJ indicted a Utah osteopathic physician for selling misbranded peptides including tirzepatide and semaglutide to more than 200 patients. It was the first federal indictment of a prescribing physician for distributing unapproved peptides.

Medspas face mounting enforcement from state licensing boards over scope of practice. Treatment modalities such as lasers, injectables, microneedling and body sculpting have transformed the business, but many of these services are considered medical services that implicate licensing requirements and demand robust written protocols.

Increased Criminal and Civil Scrutiny for Healthcare Fraud Against Federally Reimbursed Providers

DOJ enforcement statistics tell a stark story. Civil healthcare-related FCA settlements and judgments jumped from USD1.67 billion in 2024 to USD5.7 billion in 2025, the highest annual total in FCA history. Criminal healthcare fraud prosecutions increased from 193 defendants in 2024 to 324 in 2025, and the alleged fraud and loss grew from USD2.75 billion to more than USD14.6 billion.

Enforcement has expanded beyond institutional providers to individual providers, DME providers and healthcare entrepreneurs. Prosecutors are focused on falsified prescriptions, controlled-substance prescribing without adequate patient encounters, DME orders lacking documentation, improper use of billing credentials, and business models where non-clinical operators are alleged to have influenced clinical decision-making. Across these cases, documentation, ordering authority, referral relationships and financial benefit are being examined together to determine whether claims reflect legitimate services.

Uptick in Healthcare Litigation

For many independent practices and facilities, litigation has become unavoidable. Large hospital systems, having acquired the lion’s share of independent practices, are compelling affiliated providers to capture referrals and instituting “closed unit” policies that effectively exclude independents from their own markets. Payors are weaponizing provider enrolment and engaging in improper claims settlement practices. Through patient steerage to affiliated providers, they have suppressed reimbursements while destroying the economic viability of non-system providers and erecting barriers between patients and their chosen physicians.

Antitrust enforcement remains highly active across the region. The FTC’s Chairman issued a March 2026 directive adopting “a coordinated, integrated approach to healthcare enforcement,” with particular focus on hospital mergers and private equity-backed roll-up strategies. The FTC’s challenge to US Anesthesia Partners and its private equity sponsor, Welsh Carson, exemplifies the government’s willingness to scrutinize serial acquisitions designed to consolidate provider markets. Regulators have likewise continued to closely examine transactions involving physician practices and home health providers.

State regulators have maintained an assertive posture. For example, both the NJOAG and the NYAG have participated in major multistate antitrust actions including litigation over generic drug price-fixing and the proposed UnitedHealth Group acquisition of Amedisys. The NYAG, alongside the Connecticut Attorney General’s Office, investigated the proposed affiliation between Northwell Health and Nuvance Health, ultimately negotiating conditions intended to preserve healthcare access and competition, including protections involving labor-and-delivery services and other operational commitments. This reflects the trend of state Attorneys General, including New York, imposing behavioral or structural conditions on healthcare system combinations. More broadly, New Jersey authorities have demonstrated continued interest in healthcare market concentration and the competitive effects of transactions involving insurers, hospital systems and provider networks.

Private antitrust litigation is advancing novel theories as well. In the MultiPlan litigation, providers alleged that insurers used a common reimbursement platform and pricing algorithms to suppress out-of-network rates, reflecting growing concern about “algorithmic price-fixing” and the role of technology platforms in facilitating coordinated conduct.

The NSA’s IDR process has become an important mechanism for resolving out-of-network disputes, yielding awards significantly exceeding historical reimbursement levels, and resulting in challenges by insurers through delayed payments and litigation. The absence of a clear enforcement mechanism for IDR awards means that disputes are extending well beyond the arbitration itself, and market participants are reassessing their strategies accordingly.