Who Qualifies as a Business Associate?

May 8, 2020

As a business owner, you know there are a lot of elements that go into running a successful healthcare practice. It’s common to have third-party companies assist with everything from accounting, to document disposal, to managing remote operations through cloud sharing and telehealth services. These vendors may be a big part of keeping your practice running smoothly. While you may already do a fantastic job of checking your contracts with these vendors – your terms of service, payments, etc. – where many practices fall short is in reviewing your vendor’s obligations to protect your sensitive patient information.

As a healthcare provider, your practice functions as a covered entity, and any vendor that comes into contact with PHI in the process of working with your practice becomes a Business Associate (BA). Not all companies that your practice hires come into contact with PHI, so how do you know who exactly qualifies as a Business Associate? The HHS defines a Business Associate as any organization that creates, receives, maintains, or transmits PHI on behalf of a covered entity. Some examples of Business Associates include:

  • A third-party administrator that assists a health plan with claims processing 
  • A medical billing company
  • Your EHR/PM company
  • An attorney whose legal services involve access to protected health information 
  • A shredding company 
  • An email encryption provider
  • IT professionals
  • And more!

Once you determine who is considered a Business Associate to your practice, you must then institute formal agreements to ensure your practice and your third-party vendors are properly protecting the security of your patient information. This agreement highlights the specific elements of HIPAA compliance that should be followed by both you and each of your Business Associates, including:

  • Safeguarding PHI. This means the Business Associate is agreeing to implement all administrative, technical, and physical safeguards required to secure PHI and maintain compliance. 
  • Completing BA Employee Training. Just like all employees within your practice should be properly trained on HIPAA compliance, so should your Business Associate’s employees. 
  • Breach Notifications. We hope it never happens, but in the event that a breach does occur, the Business Associate must notify your practice immediately. It’s important that your practice is made aware as soon as possible so that you and your BA can complete required breach notifications within the correct time frame.  
  • Proper Disposal of PHI. If you decide to part ways with your Business Associate, you need to have the proper agreement in place to ensure the business associate will return and/or properly dispose of any PHI they have received from your practice.

Even if a vendor comes into contact with your PHI only once, it’s better to play it safe and have the proper agreements in place – just that one instance could be the catalyst for a breach of PHI. 

Not having the proper Business Associate agreements in place has been the cause of hundreds of HIPAA violations. One case, in particular, cost a medical practice in Utah a $100,000 settlement on top of a two-year corrective action plan. The practice filed a complaint against their EHR company who allegedly had been blocking access to patients’ ePHI. Although it might seem like the practice was a victim in this situation, the OCR found that there was no Business Associate Agreement in place – leaving the liability solely on the practice’s shoulders. 

Data breaches, cyber-attacks, and improper handling of PHI can happen to your practice at any time as well as the companies you work with – especially when operating remotely or bringing on new vendors to help manage operations. Ensuring that you have the proper agreements in place is vital in not only protecting your patient data but offsetting the liability of your practice in the case of a breach. A software solution like Abyde makes this process a whole lot easier with a Business Associate Portal that automatically generates formal agreements with all the proper policies and procedures in place – taking the stress of HIPAA compliance off you and your vendors.

RECENT POSTS

Related posts

Dental Practice HIPAA Settlement
Abyde News, Fines, HIPAA

What Every Dental Practice Can Learn From the $140K Shen Smiles Settlement

October 9, 2026 No comments yet

October 9, 2026 The latest HIPAA settlement doesn’t involve a hospital system or a massive ransomware attack. It involves a practice that probably looks a lot like yours. Shen Smiles is a solo dental practice in Drums, Pennsylvania. It started with a former patient’s complaint about getting their health records. It led to a broader OCR investigation and a $140,000 settlement. The lesson? Every HIPAA-regulated organization, big or small, can face enforcement.   What happened? Under federal law, patients must be given access to their records within 30 days, with one possible 30-day extension if the patient is notified in writing within the first 30 days. In April 2020, a former patient’s attorney filed a complaint with the Office for Civil Rights (OCR). The complaint alleged that the patient had requested their records multiple times without receiving access. The public documents don’t say when the first request was made. OCR’s investigation went beyond the original complaint. According to the resolution agreement, OCR found that patient records weren’t properly maintained and that staff hadn’t received formal HIPAA Privacy Rule training. OCR also said the practice couldn’t produce evidence that it had HIPAA policies and procedures in place, including for patient access requests, or that it had reasonably safeguarded patient information. During the investigation, the practice stated that it couldn’t provide the records because a workforce member had stolen them. The public documents don’t address whether a breach assessment was done. As a general rule, though, HIPAA presumes that an impermissible acquisition, access, use, or disclosure of unsecured patient information is a breach. A breach can require notifying HHS and affected patients, including steps patients can take to protect themselves. These are baseline requirements every covered entity is expected to have in place. Policies and training give a team a HIPAA playbook. Without one, staff at any practice may not know what to do when a patient asks for records or records go missing. OCR proposed a $140,000 civil money penalty in July 2024. Shen Smiles requested a hearing before an administrative law judge, but the two sides reached a resolution agreement in August 2026, before the hearing took place. Under the agreement, the practice agreed to pay $140,000. The agreement is not an admission of liability.   The Takeaway for Practices Patient access has been an OCR priority for years through its HIPAA Right of Access Initiative, and this case marks its 56th Right of Access enforcement action. It also took more than six years from complaint to resolution. As this case shows, a single complaint can lead to a broader look at your compliance program. Now is the time to ask: Do we have written HIPAA policies our team can find? Do we have a process to answer every record request within 30 days? Can we prove every team member has completed HIPAA training? If any of those gave you pause, now’s the time to fix it, before OCR comes asking. Looking for the first step? Meet with one of our compliance experts to see where you currently stand. 

Ambry Phishing Settlement
Abyde News, Fines, HIPAA

$700K HIPAA Settlement: What the Ambry Genetics Phishing Breach Teaches Every Practice

September 21, 2026 No comments yet

September 21, 2026   The HHS Office for Civil Rights (OCR) has announced its biggest HIPAA settlement of the year, reaching nearly a million dollars.  Ambry, a genetic testing and clinical genomics provider based in Aliso Viejo, California is at the center of this enforcement. A settlement was reached over a 2020 phishing attack that exposed the Protected Health Information (PHI) of more than 225,000 individuals. This settlement is a clear reminder that even large organizations trip up on HIPAA requirements.    What happened In January 2020, an employee email account at Ambry was compromised through a phishing attack.  The breach potentially exposed a wide range of PHI, including names, addresses, dates of birth, Social Security Numbers, financial details, and more. Ambry reported the breach to OCR in March 2020, which kicked off the investigation.    Where OCR found gaps OCR’s investigation identified several HIPAA Security Rule gaps, including: No accurate, thorough risk analysis of risks and vulnerabilities to ePHI No process for cutting off access to ePHI when an employee left or no longer needed access No unique user IDs for tracking who was accessing ePHI systems These are baseline HIPAA requirements that every Covered Entity and Business Associate is expected to have in place.   The settlement terms Ambry paid $700,000 and agreed to a two-year corrective action plan, under which it must: Complete a thorough risk analysis of ePHI confidentiality, integrity, and availability Build and execute a risk management plan addressing what that analysis turns up Review and update Security Rule policies and procedures as needed Implement unique user identification across all ePHI systems Train the whole workforce on those updated policies The takeaway for practices When 90% of healthcare hacks start with a successful phishing attempt, it’s key your team is aware of the role they play to keep data safe. Every practice should ask; Do we know exactly where our ePHI lives and how it moves through our systems? Do we have a current, documented risk analysis? Would we catch it fast if a former employee’s access wasn’t revoked? Looking for the first step of addressing these gaps? Meet with one of our compliance experts to see where you currently stand. 

Azul Vision Right of Access
Abyde News, Fines, HIPAA

Right of Access Enforcement Hits Eye Care: Inside the Azul Vision Settlement

September 1, 2026 No comments yet

September 1, 2026   The Office for Civil Rights (OCR) announced its 55th settlement under the HIPAA Right of Access Initiative, and this one is a good reminder that “we’ll get to it” is an easy shortcut to a massive financial penalty.   What happened Azul Vision, Inc., a California optometry enterprise healthcare provider, took nearly two years to provide a patient her healthcare records failed to give a patient timely access to her health records. She requested her records in January 2023. She didn’t actually receive them until January 2025, or two years later, and only after OCR opened an investigation following her complaint in April 2023.   The importance of Right of Access The HIPAA Privacy Rule’s Right of Access is straightforward: patients are entitled to their healthcare records within 30 days of a request, with one possible 30-day extension if needed.    The cost Azul Vision agreed to a two-year, OCR-monitored corrective action plan and paid $50,000. The corrective action plan requires the practice to: Review and revise its written policies and procedures for Privacy Rule compliance.  Regularly report to HHS a log of every PHI access request it receives, including when it came in and when it was resolved, Train all workforce members on right of access requirements and the practice’s own procedures.   Practical takeaways Have a documented, assigned process for access requests: not an informal “someone will handle it” arrangement. Track every request against the 30-day (or extended 60-day) clock: If nothing is timestamping requests, nothing is catching the ones that slip. Train staff specifically on right of access: this is a distinct Privacy Rule obligation from general HIPAA awareness, and it’s clearly one OCR is actively enforcing.   The bottom line A single records request that went unanswered turned into a $50,000 penalty, two years of federal monitoring, and a detrimental hit to the organization’s reputation. That’s a steep price for what really comes down to a missing process. If your team can’t answer “what happens the moment a patient asks for their records?” right now, that’s the gap to close before your practice ends up as OCR’s next enforcement case. Want a streamlined way to close your compliance gaps? Meet with an Abyde expert today!