Understanding and Using Taxonomy Codes to Maximize Reimbursement

by  Brittney Murdock, QCC CMCS CPC
Jun 9th, 2016 - Reviewed/Updated May 14th

Taxonomy codes are used by insurers as indicators of legal scope of practice.  Scope of practice is key to getting reimbursed under the Affordable Care Act or ObamaCare.  However, Most providers will only choose one taxonomy code to describe their training.  This limits their scope of practice.  To maximize scope of practice, providers need to understand how to select the correct taxonomy codes to add to their existing NPIs.

Washington Publishing Company provides a list of current taxonomy codes.  Here is the link to the taxonomy code list: https://x12.org/reference

A definition of the training required to select any taxonomy code is included in this extensive list of specialties and sub-specialties.  By clicking on the definition for taxonomy listed, users can determine what training is required for each taxonomy code.  

Note: There are three levels of taxonomy listed.  Here is what that means:

Level I taxonomy does not list a code.  Level I taxonomy is used for grouping general categories of providers such as Allopathic Physicians; Chiropractic Providers; Nursing Service Providers; Behavioral Health Providers; Respiratory, Developmental, Rehabilitative and Restorative Service Providers; Other Service Providers, etc.

Level II taxonomy includes codes for each field of practice.  For example Family Practitioner, Family Medicine Practitioner, Pediactrics, and Orthopedic Surgery have Level II taxonomy codes under the category Allopathic Physicians; Chiropractor has a Level II taxonomy code under Chiropractic Providers; Registered Nurse, Vocational Nurse, and Practical Nurse have Level II taxonomy codes listed under Nursing Service Providers; Psychologist, Social Worker, Marriage and Family Therapist are listed under Behavioral Health Providers; Massage Therapist, Occupational Therapist, Physical Therapist; and Acupuncturist, Homeopath and Midwife, etc.   Most Level II codes have well-defined training found by clicking on the code definition.

Level III taxonomy codes describe sub-specialties under Level II taxonomy codes. To find the training required for a Level III code, click on [definition].  For example, under Chiropractor, the Level III sub-specialty codes are listed with definitions of training:

• Independent Medical Examiner - 111NI0013X [definition]
• Internist - 111NI0900X [definition]
• Neurology - 111NN0400X [definition]
• Nutrition - 111NN1001X [definition]
• Occupational Health - 111NX0100X [definition]
• Orthopedic - 111NX0800X [definition]
• Pediatric Chiropractor - 111NP0017X [definition]
• Radiology - 111NR0200X [definition]
• Rehabilitation - 111NR0400X [definition]
• Sports Physician - 111NS0005X [definition]
• Thermography - 111NT0100X [definition]

Note: Some Level III taxonomy codes do not have a definition, such as Thermograpy.  If the provider has a certification or CEU in that field, they can add the NPI for Thermograpy to their NPI. 

Taxonomy codes are always listed below a provider or practice NPI in the national NPI database.  Payers access this database to determine a providers scope of practice when reviewing health insurance claims.  If a provider bills for thermograpy but does not have a taxonomy code listed under their NPI for thermography, the claim will frequently be denied.

Also, when a provider uses multiple taxonomy codes, they should associate the appropriate taxonomy code with the billed service.  This requires knowing how to correctly construct a health insurance claim.  Providers need to use taxonomy codes correctly to maximize reimbursment.