On February 22, the Centers for Medicare & Medicaid Services (CMS) published a final rule that modifies Medicaid provider tax regulations. Among other things, the rule implements a provision of the Tax Relief and Health Care Act of 2006 (TRHCA) that reduces the limit on Medicaid provider taxes from 6 percent to 5.5 percent of net patient revenues, and make other clarifications to the standards for determining the permissibility of provider tax arrangements. CMS estimates that the rule will cut federal Medicaid outlays by $85 million in fiscal year (FY) 2008 and by $115 million per year in FYs 2009 through 2011. The rule is effective April 22, 2008, but CMS will not consider a state to be out of compliance with the revised definition of permissible classes of arrangements until October 1, 2009.