CMS has issued guidance to state Medicaid directors on Section 6505 of the ACA, under which a state may not make payments for items or services provided under the state Medicaid plan or under a waiver to any financial institution or entity located outside of the United States. The provision is effective January 1, 2011, unless the Secretary determines that implementation requires state legislation other than funding legislation) to comply with this provision. According to the CMS guidance, certain tasks that support the administration of the Medicaid state plan (e.g., outsourcing enrollment or claims adjudication call centers) that may require payments to financial institutions or entities located outside of the U.S. are not prohibited by the statute. However, CMS states that payments for items or services provided under the state plan to financial institutions or entities (e.g., provider bank accounts or business agents) located outside of the U.S., Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa are prohibited. CMS also asserts that the ACA provision prohibits payments to telemedicine providers and pharmacies located outside of the U.S. or its territories. The impact on US-based telemedicine suppliers who employ or contract with physicians who provide services from outside the US via electronic means is unclear.