A business associate is a person or entity that performs services or functions on behalf of a covered entity that involves the use or disclosure of protected health information (PHI). On the other hand, a vendor is any company that sells goods or services to a covered entity but does not necessarily handle PHI.
What is a business associate?
A business associate is any person or entity that performs functions or services on behalf of a covered entity (such as a healthcare provider, health plan, or clearinghouse) involving the use or disclosure of PHI. Because business associates handle PHI, they are required to comply with HIPAA regulations.
According to the HHS, “The HIPAA Rules generally require that covered entities and business associates enter into contracts with their business associates to ensure that the business associates will appropriately safeguard protected health information. The business associate contract also serves to clarify and limit, as appropriate, the permissible uses and disclosures of protected health information by the business associate, based on the relationship between the parties and the activities or services being performed by the business associate.”
Examples of business associates
If a business associate fails to comply with HIPAA regulations, they can face significant legal and financial penalties.
Read also: How to audit your business associates' security practices
What is a vendor?
A vendor is any company that provides goods or services to a covered entity but does not necessarily handle PHI. Vendors may sell products like medical equipment or provide general services such as office cleaning, but if their services do not involve PHI, they are not subject to HIPAA regulations.
Since vendors that do not access PHI are not classified as business associates, they do not need to sign a BAA. However, if their work requires handling PHI in any capacity, they must be treated as a business associate and follow HIPAA guidelines.
Examples of vendors
- Medical supply companies selling gloves, syringes, or hospital beds
- Office cleaning services for healthcare facilities
- Software providers whose tools do not process PHI
- Maintenance contractors for medical office buildings
See also: HIPAA Compliant Email: The Definitive Guide
Why does this distinction matter?
Understanding the difference between a business associate and a vendor helps with HIPAA compliance. Covered entities must ensure that they have proper agreements in place with business associates to protect patient information. Failing to recognize when a vendor should be classified as a business associate can lead to compliance violations, security risks, and penalties.
To mitigate risks, healthcare organizations should:
- Conduct vendor assessments: Determine whether a vendor will have access to PHI.
- Sign BAAs when necessary: Ensure that business associates are contractually obligated to protect PHI.
- Monitor compliance: Regularly review security policies and ensure third parties follow HIPAA regulations.
FAQS
Can a vendor become a business associate?
Yes, if a vendor starts handling PHI in any capacity, they must comply with HIPAA and sign a BAA.
How can healthcare organizations ensure compliance when working with third parties?
Organizations should conduct vendor assessments, sign BAAs when necessary, and monitor compliance regularly.
Tshedimoso Makhene
