CMS has issued guidance to State Medicaid Directors on the Medicaid prescription drug rebate provisions of the Patient Protection and Affordable Care Act (PPACA). Specifically, the letter addresses the increased rebate percentages for covered outpatient drugs dispensed to Medicaid patients, the extension of prescription drug rebates to covered outpatient drugs dispensed to enrollees of Medicaid managed care organizations, and the rebate offset associated with the increase in the rebate percentages (designed to ensure that savings resulting from the increases in the rebate percentages will flow to the federal government rather than the states). CMS also released an informational announcement on PPACA provisions impacting institutional providers. The announcement includes a brief overview of PPACA section 3401, which imposes a 0.25 percentage point reduction to the market basket updates for inpatient acute hospitals, long-term care hospitals (LTCHs), and inpatient rehabilitation facilities for fiscal year (FY) 2010, effective for discharges on or after April 1, 2010. The update also addresses PPACA sections 3137 and 10317, modifying certain hospital reclassification policies with October 1, 2009, and April 1, 2010 effective dates. While additional information will be forthcoming, CMS notes that providers will begin seeing payments under these provision in late April or early May. Finally, HHS has posted a fact sheet on the PPACA’s new temporary high risk pool program for individuals who are uninsured because of pre-existing conditions, including the estimated state allotments under this program.