OBJECTIVES: Before January 1, 2010 there was no procedural code for pulmonary rehabilitation (PR). The Department of Health and Human Services (DHHS) hypothesizes that Current Procedural Terminology (CPT) codes for cardiovascular rehabilitation (93797, 93798) and Healthcare Common Procedure Coding System (HCPCS) codes for respiratory therapy (G0237, G0238) may be utilized to reimburse for PR services, since the services are similar in labor and resource utilization. A budget impact model was developed to compare the previous PR reimbursement cost with the proposed reimbursement cost using new HCPCS code (GXX30) effective from January 1, 2010. METHODS: A budget impact model was built using Microsoft Excel (1-year time horizon). A 10% sample from IMS Life Link Health Plans Claims was used to identify patients who were recipient of PR services as well as cost data for the model inputs. A major assumption was that a patient will receive an average of 2.5 PR sessions/week based on DHHS. Primary and secondary outcomes were savings Per Member Per Month (PMPM) and savings per Treated PMPM, respectively. One-way sensitivity analyses were conducted to test the robustness of study results and assumptions. RESULTS: A total of 69 patients were identified as recipients of PR services. The PR services were reimbursed at a weighted average of $32.24/claim for an average of 15.33 minutes/claim. The new HCPCS code (GXX30) will reimburse $22.20 for a minimum of 60 minutes. A PR program lasting 6 weeks(average of 2.5 sessions/ week), results in a cost savings of $0.86 PMPM based on the new HCPCS code for PR. CONCLUSIONS: The changes in coding and reimbursement proposed by DHHS for 2010 will likely result in a cost savings for Managed Care Organizations to provide reimbursement for PR services; however, generation of HCPCS code GXX30 may drive utilization for PR services.