Sunday, January 3, 2016

Taxonomy Codes – A quick code-set refresher

April 9, 2015
Taxonomy Codes – A quick code-set refresher
In the world of medical billing and credentialing for provider or group specialties, taxonomy codes have a very important role in the process.   HIPAA standard code sets specify many areas to utilize a “standard” for transactions.  In many cases a taxonomy code is required to reimburse a claim, however, the reporting requirements for a taxonomy code may vary between the insurance carriers and 3rd party payers.  
What is a taxonomy code? 
 Taxonomy codes were created for use with the HIPAA transaction code sets to specifically categorize healthcare providers and specialties for transactions related to health care.  The taxonomy codes are separated into two sections:
·         Individuals/Groups of Individuals
·         Non-Individuals
Next is the tiered levels that give specificity to the individuals/groups of individuals and the non-individuals and the type of service/specialty that most correctly represents them.  Within the tiered levels the higher the code level (level 1 – level 3), the more specific the classification of the practice, provider type, facility or agency .
Ø  Level 1, provider type:
o   Level 1 provider type is the most “generic” for specificity.  It provides a general/generic code number for occupations and services such as Emergency Medicine, Family Medicine, Dermatology, Dental Provider, Chiropractic Provider, and many more for the Individuals/Groups of Individuals.

o   Level 1 non-individuals includes those things such as agencies, ambulatory Health care facilities, hospitals, transportation services, healthcare suppliers

Ø  Level 2, classification:
§   The level 2classification of the code set for individuals/groups of individuals provides even more specificity to the service or occupation.  The code that is more specific to the practice type may be initially found under the primary level 1 classification, such as  Physician Assistant & Advanced Practice Nursing,  then the classification is separated into more specialty based specific provider types within level 2, such as Clinical Nurse Specialist.  These types are then drilled down into types such as (not an all inclusive list)
·         Acute Care
·         Adult Health
·         Emergency
·         Neonatal
·         Pediatrics

§  Level 2 specificity for non-individuals such as a level 1 ambulatory health care(s), the specificity would fall into categories such as
§  Ambulatory surgery center
§  Birthing Center
§  Critical Access Hospital
§  Home Infusion
§  Foster Care

Ø  Level 3, area of specialization - this category is the highest level of specificity.  The specificity for the individuals/groups of individuals category represents those services at the most descriptive level such as a level 1, Nursing Service Providers; Level 2 , Registered nurse; Level 3 types such as  (not an all-inclusive list
§  Diabetes Educator
§  Gerontology
§  Obstetric High-Risk
§  Oncology
§  Ambulatory Care
§  Orthopedic

Ø  Level 3 specificity for Non-Individuals would be found in Level 1, Hospitals;  Level 2, General Acute Care, Level 3 type such as
§  Children’s’ Hospital
§  Critical Access Hospital
§  Rural Hospital
§  Women’s Hospital
Taxonomy Code Structure
Once we understand the levels of specificity to choose from, the code structure is ten characters in length, and are alphanumeric.  All taxonomy codes end with the letter “X”.  The National Uniform Claim Committee or NUCC is the organization that maintains the integrity and structure of this particular code set.  Taxonomy codes are also utilized on credentialing applications and are set up for use with the ASC X12N HIPAA transaction and other HIPAA mandated transaction requirements.  When providers or agencies apply for a National Provider Identifier from CMS (NPI number) adding a taxonomy code is helpful, but not required.
The first four characters in a taxonomy care represent a “level 2” classification, the next 5 characters are representative of the “level 3” specificity and the last character is always “X”.  If we only want to assign a “level 2” code for our OB/Gyn group practice, we could choose the taxonomy code of 207V00000X.  The definition for this code in the NUCC table states:
Obstetrics & Gynecology: An obstetrician/gynecologist possesses special knowledge, skills and professional capability in the medical and surgical care of the female reproductive system and associated disorders. This physician serves as a consultant to other physicians and as a primary physician for women.
Now if we want to get a more specific taxonomy code assigned to our Maternal & Fetal Medicine specialists we would assign the taxonomy code of 207VM0101X with a definition of:
Maternal & Fetal Medicine: An obstetrician/gynecologist who cares for, or provides consultation on, patients with complications of pregnancy. This specialist has advanced knowledge of the obstetrical, medical and surgical complications of pregnancy and their effect on both the mother and the fetus. The specialist also possesses expertise in the most current diagnostic and treatment modalities used in the care of patients with complicated pregnancies.
The same procedure is followed for both the individual/group of individuals and non-individuals.  To see all of the taxonomy code choices, you can find them with this link to the NUCC web site: (

Taxonomy Code Updates
The taxonomy code set is released and updated twice a year January 1st and again on July 1st of that year.  Once the code set is released, there is a 90 day period before the code can be considered effective for use.  This means that a code that is changed and released on January 1st of that year, cannot be chosen/used until April 1st of that year.  The 90 day period between release and usage allows providers, vendors and payers time to make those specific changes into their respective data systems.  It is interesting to note that the code description may not completely describe a specialty, so in some cases a provider might need to report more than one taxonomy code on their application for credentialing with payers.  Again, a taxonomy code is chosen by the provider/entity itself, and is not chosen or assigned to the provider/entity by the 3rd party payers.  Using and choosing a closely matched taxonomy code will help expedite the timely processing of billing claims, and more accurately reflect the type of provider for the services that are rendered by your specialty.  If possible, utilize the most definitive level 2 or level 3 taxonomy code.  In some cases if the taxonomy codes does not “crosswalk” well with the NPI number, your claims could be delayed or denied by a payer.

Billing Claim Submissions:
There are different requirements when submitting taxonomy codes for electronic claims, UB04 institutional claims, and for CMS-1500 professional claims.  
§  Electronic Claims:  submissions with the ASC X12N 837P and 837I format are placed in segment PRV03 and loop 2000A for the billing level and segment PRV03 and loop 2420A for the rendering level

§  UB04 paper claims: The taxonomy code should be placed in box 81 and should be submitted with the “B3” qualifier

§  CMS-1500 paper claims: The taxonomy code should be identified with the qualifier “ZZ” in the shaded portion of box 24i.  Then, the taxonomy code should be placed in the shaded portion of box 24j for the rendering level, and in box 33b preceded with the “ZZ” qualifier for the billing level. 

As we continue to transition toward ICD-10 implementation currently set for October 1, 2015,   it is important to make sure that the credentialing personnel for providers and facilities take a look at the taxonomy codes currently on file with the 3rd party payers and vendors that they do business with under HIPAA.  The NUCC is adding more specific level 3 specialties when the updates are released again in July 2015, with implementation on October 1, 2015, and this coincides with the ICD-10 implementation.   Best facility and provider based practices should review and update these codes when they are released to ensure clean claims and the most accurate data being submitted.  In the long-run, this credentialing “housekeeping” provides a faster and correct revenue stream.

Lori-Lynne A. Webb, CPC, CCS-P, CCP, CHDA, COBGC and ICD10 cm/pcs Ambassador/trainer is an E&M, and Procedure based Coding, Compliance, Data Charge entry and HIPAA Privacy specialist, with over 20 years of experience.  Lori-Lynne’s coding specialty is OB/GYN office & Hospitalist Services, Maternal Fetal Medicine, OB/GYN Oncology, Urology, and general surgical coding.  She can be reached via e-mail at or you can also find current coding information on her blog site:  

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