As part of the Deficit Reduction Act of 2005, Congress has imposed a requirement on providers making or receiving more than $5 million annually in Medicaid payments to implement an employee education program about the False Claims Act prohibitions and related whistleblower protections. CMS has provided additional guidance to state Medicaid programs. In addition to clarifying which providers are affected by this requirement, the CMS guidance also explains the impact of the Act’s employee education requirements on a provider’s contractors. Affected contractors would include not only those that perform billing and coding functions but any vendor that providers use to furnish Medicaid reimbursed goods or services. Not only must a provider implement compliance policies that are included in its employee handbook, but it must ensure that its policies are abided by its contractors and the contractors’ employees. While CMS indicates that current contracts between providers and their contractors need not be amended to comply with the Act, contractors must agree to abide by, i.e., adopt and enforce, provider policies on employee false claims education and policies and procedures for detecting and preventing fraud, waste and abuse. Although the CMS guidance was not released until March 22, 2007, the deadline for provider compliance was January 1, 2007. Enforcement of the Act’s employee education provisions, including whether noncompliance can lead to removal from a state’s Medicaid program, is left up to the states.