NPI: More Than Just a Number

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Billing and Reimbursement are dependent on the taxonomy code designation and detail


By Susan Theuns, PA-C, CPC, CHC

“Taxonomy codes and other elements of NPI registration directly affect a provider’s ability to submit claims, order services, and receive reimbursement.”

Back when the National Provider Identifier (NPI) was implemented in 2005 as part of the Health Insurance Portability and Accountability Act (HIPAA), a new identifier accompanied it: the taxonomy code. With that, the Centers for Medicare & Medicaid Services (CMS) developed the National Plan and Provider Enumeration System (NPPES) to officially assign these unique identifiers of the provider. These codes were created to improve the efficiencies and effectiveness of electronic medical claims submission and electronic health information.

What’s in a Name?

When registering for an NPI, one of the elements that also needs to be completed is the selection of a taxonomy code. Taxonomy codes are nationally standardized 10-character codes that are alphanumeric. The definitions range from prosthesis case managers to transplant surgeons. When healthcare providers initially applied for an NPI number, little importance was associated with selection of the taxonomy codes. However, now payers, including Medicare and Medicaid, are rejecting claims based on inconsistency of services provided and taxonomy codes. Now it matters.

The Healthcare Provider Taxonomy Code Set is available from the Washington Publishing Company (WPC) at Taxonomy codes are maintained by the National Uniform Claim Committee,, and update twice yearly with effective dates for changes April first and October first. Information included with the hierarchical classifications include descriptions and definitions as well as the codes themselves. The codes can be a primary (level I classification) or subclassifications (level II and III). The more detailed a classification, the more specialized the description. These are the codes that determine a provider’s area of concentration within their discipline, so being generic is not as effectual as drilling down to the most specific code. Think of this as an unspecified versus a specified code.

Depending on the underlying area of expertise, there may be more than one taxonomy code to choose from. For example, a “hand surgeon” may be subclassified under orthopaedics or plastic surgery – depending on the physician’s training. Sports Medicine is another example: there are 8 different taxonomy codes for this specialty under Emergency Medicine, Family Medicine, Internal Medicine, Orthopaedics, Pediatrics, Physical Medicine & Rehabilitation, Psychiatry & Neurology and even Chiropractic. By definition, selection of the code does not require board certification per se; but it does require special education, training, experience and knowledge in the selected area. Therefore, it is important to carefully select any subclassification from the correct and most accurate level I classification.




Case Studies: Taxonomy Errors that Affect Reimbursement and Functionality

As healthcare becomes more technologically integrated, accuracy in electronic claims submission data becomes critical to reimbursement. In today’s world, a slight variation can make the difference between full payment and denial. Because a provider’s taxonomy code resides in the NPI registry, it has a direct relationship to payer credentialing. The taxonomy code identifies any specialty or sub-specialty that a provider has. Examples of taxonomy errors and necessary updates are (1) when a resident or fellow graduates and becomes a board-certified or state licensed physician, (2) a provider obtains specialty credentials i.e. orthopaedist becomes a trauma, hand or spine specialist, primary care provider becomes a geriatrics or palliative care specialist or hospitalist, and so forth. There are numerous sub-specialties available nowadays that impact when a physician can act in a consultant role from a billing perspective.

Here are some case scenarios that can result in non-payment or lack of services:

  1. A registered nurse (RN) completed advanced training and is now a licensed Certified Registered Nurse Practitioner (CRNP). She worked in this role for several years before being told by a patient that the prescription she had given her for diabetes supplies was denied by the pharmacy. Upon researching the root cause of the denial, it was discovered that the CRNP had never updated her taxonomy code from RN to CRNP in the NPPES database. Only a healthcare provider can order Durable Medical Equipment (DME) and supplies for a patient.
  2. A general orthopaedist saw a patient in the office and asked a colleague with more specialized training to see the patient with him when faced with a complex orthopaedic problem. Both physicians (they had the same employer and billed under the same group NPI), tried to bill an evaluation and management code for the services they rendered. One claim was paid and one claim was denied as a duplicate service. Research revealed that although one physician specialized in trauma and the other in foot and ankle, both used the generic taxonomy code of 207X00000X. Had they each selected a more detailed code, they both would have been eligible to receive reimbursement for the services they rendered on the same patient, same day.

See Figure: 1

A geriatrics specialist consulted on numerous hospital patients at the request of the admitting hospitalist, an internist. All of the Medicare Part B claims and some commercial claims were denied for these hospitalized patients and the geriatrician could not understand why. Investigation of the claims showed duplicate claims for internal medicine subsequent hospital care, no designation of attending of record, and care denied as non-participating under specialty contracts. All of these situations resulted from the provider never updating his taxonomy code from Internal Medicine to Geriatric Medicine when he passed his boards 7 years prior. Even the specialty contract recognized him as primary care and disallowed his consults. In addition, the hospitalist had never updated his taxonomy code from “internist” to “hospitalist”, which added another aspect of billing inaccuracy to his claims.

  • A new graduate took a job as a hospitalist and was fully credentialed upon hire, several months after completing her residency program. As a “student” in a residency program, she had applied for her NPI and correctly selected taxonomy code 390200000X.

See Figure: 2

However, she neglected to update her taxonomy code to “hospitalist” as the primary designation and “internal medicine” as the secondary when she graduated and took the new job. This resulted in rejections and denials deeming her as ineligible to provide billable services.

  • A physician received an inquiry from state Medicaid questioning whether or not he was a sole proprietor or not. They were holding claims awaiting his response. A quick check of his NPI profile showed that it had not been updated since 2007, at which time he had indicated that he was a sole proprietor. Since his initial NPI application, he had become employed by a medical group and was billing under his individual NPI and group NPI. Once he accessed the portal and changed the response to sole proprietor to “no”, the credentialing issue with Medicaid was resolved.
  • Working the rejection and denial billing reports, a director noted a pattern in the rejections from various payors for one physician stating that the provider was not eligible to provide that type of service. Careful inspection revealed an outdated and incorrect taxonomy code on the provider NPI profile that was inconsistent with the services being provided.

See Figure: 3

With all of these issues, the providers technically have 30 days to notify NPPES of any changes. Not adhering to this guideline is a self-imposed penalty that exceeds any potential fines from NPPES since reimbursement can be negatively affected. Most likely because of the reimbursement consequences, NPPES rarely imposes fines for delayed updates to a provider NPI, although they maintain the right under federal guidelines.

Figures: Figures 1 2 3


This critical information should be carefully reviewed upon hire and annually to ensure accuracy in reporting and billing. New taxonomy codes are added bi-annually so new sub-specialties may become available that would allow a healthcare provider to be more specific than previously. In addition, providers of all levels should be encouraged to be part of the process.

An NPI is a provider’s for life and is not dependent upon employer so they need to be engaged and part of the process. Most of the information on the NPPES website is accessible by the public. This means that if a provider puts a home address or home phone/cell phone number for contact, their patients now have access to this information. It is a best practice to use only business contact addresses and phone numbers for your NPI for this reason.


9.13 NPI Logo and Business Card Gelling Ideas 24



Taxonomy codes and other elements of NPI registration directly affect a provider’s ability to submit claims, order services, and receive reimbursement. This often overlooked and neglected piece of a provider’s NPI warrants regular review and updating when any changes occur, such as name change, office move, board certification, change in role, or shift in the specialty-focus of a practice, despite official certification. Last, but not least, the provider user name and password for NPPES and the NPI database are the same for the Provider Enrollment, Chain and Ownership System (PECOS), CMS Analysis & Information (A&I), and the EHR Incentives Program portal to report Meaningful Use and PQRS. As with all user names and passwords, they need to be maintained but carefully protected. It will save a lot of headaches for those who rely on these on-line service portals for their livelihood.


CMS Center for Program Integrity, Medicare Provider/Supplier to Healthcare Provider Taxonomy Crosswalk, November 2015.

National Plan and Provider Enumeration System,

Washington Publishing Company, Health Care Provider Taxonomy Code Set,


Susan Theuns, PA-C, CPC, CHC, is the administrative director of physician practices at MedStar Union Memorial Hospital in Baltimore, Maryland. In addition to her certifications, she holds degrees in Allied Health, Business Management and Leadership & Education. Theuns serves as a national advisor and is a contributing author for The Business of Medical Practice, 3rd edition. She is a member of the Baltimore, Maryland, local chapter.


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