Are cybersecurity firms business associates?

Cybersecurity firms are not automatically considered business associates under the Health Insurance Portability and Accountability Act (HIPAA). However, their designation depends on the specific services they provide to a covered entity (e.g., healthcare provider, health plan) or another business associate.

Demand for cybersecurity in healthcare

As healthcare organizations face an increasing number of cyberattacks and the complexity of data breaches continues to rise, the role of cybersecurity in healthcare is more crucial than ever. The market for healthcare cybersecurity was valued at USD 14.7 billion in 2022 and is projected to grow at a compound annual growth rate of 18.4% between 2023 and 2030. This rapid growth is fueled by several key factors, including the “Growing cyberattacks, growing privacy and security concerns, and a greater uptake of cutting-edge cyber security solutions are some of the factors propelling the market.”

The surge in demand for cybersecurity solutions requires healthcare providers and businesses to work with trusted cybersecurity firms, who may qualify as business associates under HIPAA. With the sensitive nature of healthcare data, ensuring that third-party cybersecurity providers comply with HIPAA requirements for protected health information (PHI) is a must. As the market grows, so too does the responsibility of these cybersecurity firms to uphold the privacy and security standards set forth by HIPAA.

See also: Tips for cybersecurity in healthcare

What is a business associate?

A business associate is a person or entity that performs certain functions or activities on behalf of or provides services to a covered entity that involves using or disclosing PHI.

Under HIPAA, a business associate can include individuals, organizations, or vendors who do not directly provide healthcare but handle PHI in some capacity.

When cybersecurity firms are business associates

A cybersecurity firm is considered a business associate if it:

• Creates, receives, maintains, or transmits PHI on behalf of a covered entity or another business associate.
• Provides services like data breach detection, response, or risk analysis that involves access to PHI.
• Engages in activities like managing or securing systems that store or process PHI.

For example:

• A firm hired to manage a healthcare provider’s IT infrastructure, including their PHI storage systems, is a business associate.
• A company providing encryption services requiring PHI access is also a business associate.

In such cases, the firm must sign a business associate agreement (BAA) with the covered entity, outlining responsibilities for safeguarding PHI and complying with HIPAA.

When cybersecurity firms are not business associates

A cybersecurity firm is not a business associate if it:

• Does not handle PHI directly. For example, it provides general cybersecurity services like firewalls or antivirus software that do not require access to PHI.
• Advises on policies and practices without directly interacting with PHI.

Learn more: How to know if you’re a business associate

Key considerations

• Data handling: Whether the firm needs access to PHI for its services determines its status under HIPAA.
• Business associate agreement: If the firm qualifies as a business associate, it must enter into a BAA to clarify its obligations.
• Best practices: Even if it’s not a business associate, a cybersecurity firm should implement robust safeguards to protect sensitive information.

See also: HIPAA Compliant Email: The Definitive Guide

FAQs

What types of cybersecurity services would require a BAA?

Cybersecurity services that require access to PHI and may require a BAA include:

• Managing or securing systems that store PHI
• Encrypting or monitoring PHI in transit
• Data breach detection and response
• Risk analysis and vulnerability assessments related to PH

How can covered entities ensure cybersecurity firms are compliant with HIPAA?

Covered entities should vet cybersecurity firms carefully and ensure they have appropriate safeguards to protect PHI. This includes conducting due diligence, reviewing the firm's security practices, and ensuring a BAA is signed before any PHI is shared or handled.

How can healthcare providers protect PHI while working with third-party cybersecurity firms?

Healthcare providers can protect PHI by ensuring that all third-party vendors, including cybersecurity firms, sign a BAA before engaging in any activities involving PHI. Providers should also regularly monitor cybersecurity practices, conduct audits, and stay up to date on regulatory changes to maintain HIPAA compliance.