Should You Sign a Business Associate Agreement?


No, this isn’t a contract to do business with another firm. It is an acknowledgment you may be asked to sign if you do business with a medical office or other “covered entity” and you have access through your work to protected patient information (including a patient’s name, address, and Social Security number). It requires you, as a business associate, to protect the privacy of the covered entity’s patient information.

If you never do business with any covered entity, you can ignore the information about a business associate agreement, but if you now do or plan to do business with a covered entity, here’s a heads up.

Who may be asked to sign
The regulations related to a business associate agreement came out last year, but not all health care providers have yet reached out to their potential business associates.

A business associate is defined as: A person or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or provides services to, a covered entity (e.g., doctor or dentist, medical practice). A business associate often is an individual or a small business.

The following is a list of examples of potential business associates compiled by HHS:

  • A third party administrator that assists a health plan with claims processing.
  • A CPA firm whose accounting services to a health care provider involves access to protected health information.
  • An attorney whose legal services to a health plan involve access to protected health information.
  • A consultant that performs utilization reviews for a hospital.
  • A health care clearinghouse that translates a claim from a non-standard format into a standard transaction on behalf of a health care provider and forwards the processed transaction to a payer.
  • An independent medical transcriptionist that provides transcription services to a physician.
  • A pharmacy benefits manager that manages a health plan’s pharmacist network.

Even though omitted from this list, I think that an outside bookkeeper (e.g., a QuickBooks expert) would also be treated as a business associate if the person has access to protected health information.

Obligations under the agreement
The business associate agreement sets forth the obligations of each party to it. HHS requires the agreement to:

  1. Establish the permitted and required uses and disclosures of protected health information by the business associate;
  2. Provide that the business associate will not use or further disclose the information other than as permitted or required by the contract or as required by law;
  3. Require the business associate to implement appropriate safeguards to prevent unauthorized use or disclosure of the information, including implementing requirements of the HIPAA security rule with regard to electronic protected health information;
  4. Require the business associate to report to the covered entity any use or disclosure of the information not provided for by its contract, including incidents that constitute breaches of unsecured protected health information;
  5. Require the business associate to disclose protected health information as specified in its contract to satisfy a covered entity’s obligation with respect to individuals' requests for copies of their protected health information, as well as make available protected health information for amendments (and incorporate any amendments, if required) and accountings;
  6. To the extent the business associate is to carry out a covered entity’s obligation under the privacy rule, require the business associate to comply with the requirements applicable to the obligation;
  7. Require the business associate to make available to HHS its internal practices, books, and records relating to the use and disclosure of protected health information received from, or created or received by the business associate on behalf of, the covered entity for purposes of HHS determining the covered entity’s compliance with the HIPAA privacy rule;
  8. At termination of the contract, if feasible, require the business associate to return or destroy all protected health information received from, or created or received by the business associate on behalf of, the covered entity;
  9. Require the business associate to ensure that any subcontractors it may engage on its behalf that will have access to protected health information agree to the same restrictions and conditions that apply to the business associate with respect to such information; and
  10. Authorize termination of the contract by the covered entity if the business associate violates a material term of the contract.

Note: Agreements between business associates and business associates that are subcontractors are subject to these same requirements.

Violating an agreement
If you sign a business associate agreement (you may not have a choice if you want to do business with a covered entity), you face an array of problems.

  • You have costs associated with patients’ notification if there is any security breach of their privacy. This cost may be shared with the covered entity if you spell this out in your agreement.
  • You are contractually liable to the covered entity for violations of your agreement.
  • You are directly liable for violations of HIPAA rules. This can expose you to civil and, in some cases, criminal penalties.

Learn more
The Department of Health and Human Services (HHS), which oversees the Health Insurance Portability and Accountability Act (HIPAA), has a sample business associate agreement and other information here.  Talk with a knowledgeable attorney before you sign anything!!

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