Need to pick a taxonomy code for NPI Number? What the heck is a taxonomy code and why is it important when you apply for your NPI number? Picking the correct taxonomy code is extremely important because it can directly affect your reimbursement by insurance companies.
Taxonomy Codes are an administrative code set for identifying the provider type and area of specialization for health care providers. They are alphanumeric and are ten characters in length. Taxonomy codes allow providers to identify their specialty. A provider can have more than one taxonomy code.
Taxonomy Codes have 3 distinct levels. Level I is the provider type which is a
major grouping of health care providers. For example: Dentists, Osteopathic Physicians, and Chiropractors.
Level II is Classification or a more specific service or occupation related to the provider type.
Level III is the Area of Specialization. This is a more specialized area of the classification in which a provider chooses to practice or make services available. This is usually based upon the sub-specialty certificate.
Taxonomy Codes allow the provider to identify their specialty at the claim level so this can directly affect your reimbursement from insurance companies. If you have an inaccurate taxonomy code linked to your NPI number then your services may be paid at a lower reimbursement rate, or outright denied by an insurance company.
Example: If you are a Pediatric Surgeon and you pick a taxonomy code for just straight Pediatrics, your services may be denied. You would need to pick the more specific code of Pediatric Surgeon (at Level III) in order to ensure proper reimbursement for your services.
In order for health care providers to receive reimbursement from insurance companies after May 23, 2007, they must apply for an NPI number and choose a taxonomy code. When applying for your NPI number it is extremely important that you pick the correct taxonomy code. It can affect your payments from insurance companies. The NPI number application has a list of the taxonomy codes available.
Copyright – Michele Redmond 2007