Direct Liability of Business Associates
Direct Liability of Business Associates In 2009, Congress enacted the Health Information Technology for Economic and Clinical Health (HITECH) Act, making business associates of covered entities directly liable for compliance with certain requirements of the HIPAA Rules. Consistent with the HITECH Act, the HHS Office for Civil Rights (OCR) issued a final rule in 2013 to modify the HIPAA Privacy, Security, Breach Notification, and Enforcement Rules. Among other things, the final rule identifies provisions of the HIPAA Rules that apply directly to business associates and for which business associates are directly liable. As set forth in the HITECH Act and OCR’s 2013 final rule, OCR has authority to take enforcement action against business associates only for those requirements and prohibitions of the HIPAA Rules as set forth below. Business associates are directly liable for HIPAA violations as follows: - Failure to provide the Secretary with records and compliance reports; cooperate with complaint investigations and compliance reviews; and permit access by the Secretary to information, including protected health information (PHI), pertinent to determining compliance.
- Taking any retaliatory action against any individual or other person for filing a HIPAA complaint, participating in an investigation or other enforcement process, or opposing an act or practice that is unlawful under the HIPAA Rules.
- Failure to comply with the requirements of the Security Rule.
- Failure to provide breach notification to a covered entity or another business associate.
- Impermissible uses and disclosures of PHI.
- Failure to disclose a copy of electronic PHI (ePHI) to either (a) the covered entity or (b) the individual or the individual’s designee (whichever is specified in the business associate agreement) to satisfy a covered entity's obligations under 45 CFR 164.524(c)(2)(ii) and 3(ii), respectively, with respect to an individual’s request for an electronic copy of PHI.
- Failure to make reasonable efforts to limit PHI to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request.
- Failure, in certain circumstances, to provide an accounting of disclosures.
- Failure to enter into business associate agreements with subcontractors that create or receive PHI on their behalf, and failure to comply with the implementation specifications for such agreements.
- Failure to take reasonable steps to address a material breach or violation of the subcontractor’s business associate agreement.
For example, where the business associate’s agreement with a covered entity requires it to provide an individual with an electronic copy of his or her ePHI upon the individual’s request and the business associate fails to do so, OCR has enforcement authority directly over the business associate for that failure. (See No. 6 above.) By contrast, OCR lacks the authority to enforce the “reasonable, cost-based fee” limitation in 45 CFR 164.524(c)(4) against business associates because the HITECH Act does not apply the fee limitation provision to business associates. A covered entity that engages the services of a business associate to fulfill an individual’s request for access to their PHI is responsible for ensuring that, where applicable, no more than the reasonable, cost-based fee permitted under HIPAA is charged. If the fee charged is in excess of the fee limitation, OCR can take enforcement action against only the covered entity.
| National Pharmacy Chain Extends Protections for PHI on Insurance Cards Covered Entity: Pharmacies Issue: Impermissible Uses and Disclosures; Safeguards A pharmacy employee placed a customer's insurance card in another customer's prescription bag. The pharmacy did not consider the customer's insurance card to be protected health information (PHI). OCR clarified that an individual's health insurance card meets the statutory definition of PHI and, as such, needs to be safeguarded. Among other corrective actions to resolve the specific issues in the case, the pharmacy revised its policies regarding PHI and retrained its staff. The revised policies are applicable to all individual ...read more |
| Radiologist Revises Process for Workers Compensation Disclosures Covered Entity: Health Care Provider Issue: Impermissible Uses and Disclosures A radiology practice that interpreted a hospital patient’s imaging tests submitted a worker’s compensation claim to the patient’s employer. The claim included the patient’s test results. However, the patient was not covered by worker’s compensation and had not identified worker’s compensation as responsible for payment. OCR’s investigation revealed that the radiology practice had relied upon incorrect billing information from the treating hospital in submitting the claim. Among other corrective actions to resolve the specific issues in the case, the practice apologized to ...read more |
| Private Practice Ceases Conditioning of Compliance with the Privacy Rule Covered Entity: Private Practice Issue: Conditioning Compliance with the Privacy Rule A physician practice requested that patients sign an agreement entitled “Consent and Mutual Agreement to Maintain Privacy.” The agreement prohibited the patient from directly or indirectly publishing or airing commentary about the physician, his expertise, and/or treatment in exchange for the physician’s compliance with the Privacy Rule. A patient’s rights under the Privacy Rule are not contingent on the patient’s agreement with a covered entity. A covered entity’s obligation to comply with all requirements of the Privacy Rule ...read more |
| Can a covered entity refuse to disclose ePHI to an app chosen by an individual because of concerns about how the app will use or disclose the ePHI it receives? No. The HIPAA Privacy Rule generally prohibits a covered entity from refusing to disclose ePHI to a third-party app designated by the individual if the ePHI is readily producible in the form and format used by the app. See 45 CFR 164.524(a)(1), (c)(2)(ii), (c)(3)(ii). The HIPAA Rules do not impose any restrictions on how an individual or the individual’s designee, such as an app, may use the health information ...read more |
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1/21/25 Understanding Business Associate Agreements
11/12/22 Modernizing Medicine Agrees to Pay $45 Million to Resolve Allegations of Accepting and Paying Illegal Kickbacks and Causing False Claims
11/12/22 Indian National Charged in $8 Million COVID-19 Relief Fraud Scheme
11/12/22 Former Hospital Employee Pleads Guilty To Criminal HIPPA Charges
11/12/22 Covered entities and those persons rendered accountable by general principles of corporate criminal liability may be prosecuted directly under 42 U.S.C. § 1320d-6
11/12/22 The Delaware Division of Developmental Disabilities Services Data Breach
11/12/22 OCR Settles Three Cases with Dental Practices for Patient Right of Access under HIPAA
11/12/22 HHS Issues Guidance on HIPAA and Audio-Only Telehealth
11/12/22 Five Former Methodist Hospital Employees Charged with HIPAA Violations
11/12/22 May a covered entity use or disclose protected health information for litigation?
11/12/22 When does the Privacy Rule allow covered entities to disclose protected health information to law enforcement officials?
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