On August 22, 2008, HHS proposed new code sets to be used by the public and private sectors for reporting diagnoses and inpatient procedures in health care transactions under the Health Insurance Portability and Accountability Act (HIPAA) effective October 1, 2011. Specifically, the proposed rule would adopt the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD–10–CM) for diagnosis coding, and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD–10–PCS) for inpatient hospital procedure coding. These new codes would replace the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD–9–CM) Volumes 1 and 2, and the International Classification of Diseases, Ninth Revision, Clinical Modification (CM) Volume 3 for diagnosis and procedure codes, respectively. HHS believes the adoption of the ICD-10 code set will: support value-based purchasing by accurately defining services and providing specific diagnosis and treatment information; support comprehensive reporting of quality data; ensure more accurate payments for new procedures; result in fewer rejected and improper claims; and facilitate comparisons to international data. While HHS expects the transition to the new codes to save billions of dollars in the long-term, short-term implementation costs (training, productivity losses, and systems changes) could reach hundreds of millions of dollars. HHS will accept comments on the proposed rule, including the cost/benefit assumptions, until October 21, 2008.