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.
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.”
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
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.
See also: HIPAA Compliant Email: The Definitive Guide
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:
Yes, if a vendor starts handling PHI in any capacity, they must comply with HIPAA and sign a BAA.
Organizations should conduct vendor assessments, sign BAAs when necessary, and monitor compliance regularly.