NPI Type 1 vs. Type 2: What Therapy Practices Should Know Before Credentialing

If you've been through the credentialing process before, you know even small mistakes can create big delays. One of the most common areas of confusion is understanding the NPI Type 1 vs Type 2 and knowing when each one is required.

Insurance companies use these numbers to identify providers and practices during credentialing and billing. Using the wrong NPI can lead to enrollment issues, claim delays, and payment problems. Knowing when each NPI is required helps therapy practices avoid unnecessary setbacks and move through credentialing more smoothly.

What Is an NPI?

NPI stands for National Provider Identifier. It is a unique 10-digit identification number used in healthcare billing and administrative transactions, issued by the Centers for Medicare & Medicaid Services (CMS).

It helps insurance companies, clearinghouses, and billing teams recognize exactly who provided the service and who is submitting the claim. Unlike payer-specific IDs, one NPI follows a provider or organization throughout their healthcare career and does not expire, even if they change jobs, locations, or states.

There are two main types:

• NPI Type 1 for individual healthcare providers

• NPI Type 2 for healthcare organizations

Each serves a different function: in claims, in payer directories, and during credentialing. 

What Is NPI Type 1

A Type 1 NPI is assigned to an individual healthcare provider, not a clinic or organization. It identifies the person who delivers care and is commonly used during credentialing, billing, and claims submission. 

A type 1 NPI number identifies the person who provides healthcare services.

For example, if a speech therapist provides treatment to a patient, the therapist’s individual NPI may be used to identify the rendering provider. If a BCBA provides ABA therapy supervision, that provider’s NPI Type 1 may be used to identify the individual professional connected to the service.

A provider can only have one Type 1 NPI. It stays with the individual even if they change jobs, move to another state, open a practice, join a group, or switch specialties.

Who Needs an NPI Type 1

You typically need a Type 1 NPI if you:

• Provide billable healthcare services

• Serve as a rendering provider on insurance claims

• Need credentialing with insurance companies as an individual provider

• Run a solo practice under your own credentials

• Refer patients or coordinate care with other healthcare professionals

What Is NPI Type 2?

A Type 2 NPI is assigned to a healthcare organization, such as an ABA practice, clinic, or agency. It identifies the business that bills insurance and receives payment for services.

Many providers assume a Type 2 NPI replaces a Type 1 NPI, but both are often needed. The Type 1 NPI identifies the provider who delivered care, while the Type 2 NPI identifies the organization submitting the claim.

For example, if your ABA practice bills CPT code 97153 under the wrong NPI, claims can be delayed or denied, affecting cash flow and reimbursement. Understanding the billing requirements for CPT code 97153 can help prevent these issues.

Before credentialing, make sure your Type 2 NPI matches your legal business information and payer enrollment records to avoid unnecessary delays.

Who Needs a Type 2 NPI

•      ABA agencies and behavioral health clinics

•      Group practices operating under a shared Tax Identification Number, or TIN

•      Any business entity that is the billing provider on claim forms

•      Multi-location organizations submitting claims under a single group umbrella

•      Healthcare organizations that employ or contract with individual clinicians

NPI Type 1 vs. Type 2: The Simple Difference

A solo provider may only need a Type 1 NPI. A clinic, group practice, therapy center, hospital, or organization may need a Type 2 NPI. In many cases, a practice needs both. The key is knowing when each one applies.

Here is a quick comparison.

Area	Type 1 NPI	Type 2 NPI
Assigned to	Individual provider	Organization or group
Also called	Individual NPI	Organizational NPI
Used for	Rendering provider identification	Billing entity identification
Example	Therapist, physician, BCBA, psychologist	Clinic, group practice, hospital
Can there be more than one?	One per individual	Organizations may have more than one, depending on the structure
Common billing role	Identifies who performed the service	Identifies who is billing for the service

When Do You Need Type 1 and Type 2 NPI

The NPI you need depends on how your therapy practice is structured and how claims are submitted.

Solo Provider

A solo provider usually needs a Type 1 NPI. This identifies the individual healthcare provider who delivers the service.

Example: A BCBA billing insurance under their own name would use a Type 1 NPI.

Therapy Practice or Clinic

A therapy practice, LLC, corporation, or clinic usually needs a Type 2 NPI. This identifies the business or organization as the billing entity.

Example: An ABA clinic billing under the clinic name would use a Type 2 NPI.

Most ABA Practices Need Both

Many ABA practices use both NPIs. The Type 1 NPI identifies the provider delivering or supervising care. The Type 2 NPI identifies the organization receiving payment. Using the correct NPI setup helps prevent credentialing delays, claim rejections, and payment issues, especially when providers are going through group or individual credentialing with insurance payers.

Billing Under Group NPI vs Individual NPI

Understanding billing under group NPI vs individual NPI becomes important as therapy practices grow.

When billing under an individual NPI (Type 1), the provider is treated as the billing entity. This setup is common for solo practitioners who operate independently.

When billing under a group NPI (Type 2), the organization becomes the billing entity while the individual provider continues to appear on claims as the rendering provider.

This distinction matters because payer enrollment, credentialing, and reimbursement all depend on the correct NPI setup. A clinic may have active authorizations and valid CPT codes, but claims can still be delayed or denied if the provider is not properly linked to the group.

For most ABA and therapy practices, group billing requires both the organization's Type 2 NPI and each provider's Type 1 NPI. Before submitting claims, verify that providers are credentialed under the group and that payer records match your NPI enrollment information.

How to Apply for an NPI

Both Type 1 and Type 2 NPIs are free and issued through the National Plan and Provider Enumeration System (NPPES). The application takes about 20 minutes, and most NPIs are assigned within 10 business days.

You'll need your legal name (or organization name), tax ID and taxonomy code, and practice address. For Type 2 applications, you'll also identify an authorized official for the organization.

Once assigned, keep your NPI profile updated. Outdated addresses or taxonomy codes cause problems during credentialing and claims processing.

Does an NPI Expire

No, an NPI does not expire. Once assigned, it generally stays with the provider or organization.

However, information connected to the NPI should be kept accurate. If your address, taxonomy, business name, contact details, or other key information changes, it should be updated in the NPPES system. This is especially important for practices using virtual offices or CMRA addresses during enrollment.

Outdated NPI data can create problems during credentialing, payer enrollment, claim review, and directory validation.

FAQ

1. What is the difference between Type 1 and Type 2 NPI?

A Type 1 NPI identifies an individual healthcare provider, while a Type 2 NPI identifies a healthcare organization or practice. Many therapy practices need both for credentialing and billing. 

2. How many types of NPI are in medical billing?

There are two types of NPIs used in medical billing: Type 1 for individual providers and Type 2 for organizations such as clinics, group practices, and healthcare agencies.

3. How is NPI calculated?

An NPI is not calculated from provider information. It is a unique 10-digit identification number assigned by the National Plan and Provider Enumeration System (NPPES) when a provider or organization applies.