Authorized representatives from both the covered entity and the business associate need to sign the business associate agreement (BAA). These representatives must have the legal authority to bind their respective organizations to the terms of the agreement, ensuring both parties comply with HIPAA requirements. The signatures confirm that both parties understand their responsibilities for protecting protected health information (PHI) and agree to follow the necessary safeguards.
Who is a covered entity?
A covered entity refers to any individual or organization that provides healthcare services or transmits health-related data electronically. It includes healthcare providers, health plans, and healthcare clearinghouses. Common examples of covered entities are hospitals, doctors' offices, and insurance companies.
Covered entities are responsible for ensuring that PHI is handled in compliance with HIPAA regulations. When they engage a third party to perform services that involve PHI, they must enter into a BAA to safeguard patient information.
Read also: What is a covered entity?
Who is a business associate?
A business associate refers to any individual or organization that performs tasks or provides services on behalf of a covered entity involving access to PHI. Examples of these services include billing, data storage, IT support, and transcription services.
Business associates have specific responsibilities under HIPAA, and signing a BAA ensures they are aware of and agree to comply with those obligations. A business associate agreement outlines how PHI will be handled, how data breaches will be reported, and how information will be securely managed.
Read more: What does it mean to be a business associate?
What is a BAA?
A business associate agreement (BAA) is a legal contract that defines the roles and responsibilities of your healthcare organization (the covered entity) and its business associates under HIPAA guidelines. A BAA is required whenever protected health information (PHI) is involved, as it ensures that third-party organizations providing services involving PHI on your behalf comply with HIPAA regulations and implement appropriate safeguards. Since most healthcare organizations do not manage every function internally, you likely rely on multiple business associates to assist with various tasks, making BAAs a fundamental part of maintaining compliance.
Who needs to sign the BAA?
Authorized representatives
The BAA must be signed by authorized representatives from both the covered entity and the business associate. An authorized representative is typically an individual with the legal authority to bind their organization to the terms of the agreement, such as executives, managers, or others with decision-making authority.
For example:
- Covered entity: The person signing on behalf of the covered entity might be the CEO, compliance officer, or legal counsel.
- Business associate: The person signing on behalf of the business associate could be the CEO, managing partner, or another executive with authority.
The signature signifies that both parties understand and agree to comply with the terms of the agreement, including data protection measures and breach notification protocols.
What happens if the wrong person signs?
If an unauthorized individual signs the BAA, the agreement may not be legally binding, potentially exposing both parties to non-compliance with HIPAA regulations. Verifying that the person signing the agreement has the appropriate authority within the organization is necessary to avoid this risk.
Common mistakes in signing a BAA
Failing to identify the right signatory
One common mistake is assuming that any employee can sign the BAA. In reality, the signatory must have the legal authority to bind the organization to the agreement's terms.
Neglecting to review the agreement thoroughly
Another mistake is signing the BAA without thoroughly reviewing its terms. Both parties should ensure that the agreement covers all necessary compliance measures, including data security, breach notification, and post-termination responsibilities.
Not updating the BAA when leadership changes
When there is a change in leadership or organizational structure, it's beneficial to update the BAA to reflect the new authorized representative. Failure to do so can create compliance gaps.
Post-signing responsibilities
Once the BAA is signed, both the covered entity and the business associate have ongoing responsibilities to ensure HIPAA compliance. These include:
- Implementing security measures: Both parties must put appropriate security measures in place to protect PHI.
- Training staff: Employees who handle PHI should receive regular training on HIPAA requirements.
- Conducting audits: Regular audits can help identify potential compliance gaps and ensure that both parties adhere to the terms of the BAA.
Related: Understanding BAA compliance in healthcare
In the news
In February 2014, Advanced Care Hospitalists PL (ACH), a Florida-based internal medicine group, was informed by a local hospital that patient PHI was publicly accessible on a medical billing company’s website. The exposed data included names, dates of birth, and Social Security numbers of over 400 individuals, with subsequent investigation revealing that an additional 8,855 patients’ information may have been compromised. The breach was tied to a representative of Doctor’s First Choice Billings, a company ACH engaged between November 2011 and June 2012, without a properly executed BAA. This omission violated HIPAA regulations requiring BAAs before any exchange of PHI. As a result, ACH agreed to a $500,000 settlement with the U.S. Department of Health and Human Services Office for Civil Rights (OCR), illustrating the severe consequences of neglecting foundational HIPAA compliance requirements.
FAQs
Can an employee without decision-making authority sign a BAA?
The BAA must be signed by an individual with the legal authority to bind the organization to the terms of the agreement. Typically, this responsibility falls to an executive or a designated compliance officer.
What happens if a BAA is not signed?
If a BAA is not signed when required, both the covered entity and the business associate risk significant penalties for non-compliance with HIPAA regulations. Additionally, they may be liable for any data breaches that occur as a result.
Do subcontractors of a business associate need to sign a BAA?
Yes, if a business associate engages a subcontractor to perform services that involve PHI, the subcontractor must also sign a BAA with the business associate.
How often should BAAs be reviewed?
It is best practice to review BAAs every two to three years or whenever there are changes in regulations or the nature of the services provided.
What should be included in a BAA?
A BAA should include:
- Data protection measures
- Breach notification procedures
- Post-termination responsibilities
- Security protocols
See also: HIPAA Compliant Email: The Definitive Guide
Farah Amod
