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.
| Dentist Revises Process to Safeguard Medical Alert PHI Covered Entity: Health Care Provider Issue: Safeguards, Minimum Necessary An OCR investigation confirmed allegations that a dental practice flagged some of its medical records with a red sticker with the word "AIDS" on the outside cover, and that records were handled so that other patients and staff without need to know could read the sticker. When notified of the complaint filed with OCR, the dental practice immediately removed the red AIDS sticker from the complainant's file. To resolve this matter, OCR also required the practice to revise its policies and operating ...read more |
| Entity Rescinds Improper Charges for Medical Record Copies to Reflect Reasonable, Cost-Based Fees Covered Entity: Private Practice Issue: Access A patient alleged that a covered entity failed to provide him access to his medical records. After OCR notified the entity of the allegation, the entity released the complainant’s medical records but also billed him $100.00 for a “records review fee” as well as an administrative fee. The Privacy Rule permits the imposition of a reasonable cost-based fee that includes only the cost of copying and postage and preparing an explanation or summary if agreed to by the individual. To ...read more |
| Direct Liability of Business Associates In 2009, Congress enacted the Health Information Technology for Economic and Clinical Health (HITECH) Act,1 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.2 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.3 As set forth in the HITECH ...read more |
| Mental Health Center Provides Access after Denial Covered Entity: Mental Health Center Issue: Access, Authorization The complainant alleged that a mental health center (the "Center") improperly provided her records to her auto insurance company and refused to provide her with a copy of her medical records. The Center provided OCR with a valid authorization, signed by the complainant, permitting the release of information to the auto insurance company. OCR also determined that the Center denied the complainant's request for access because her therapists believed providing the records to her would likely cause her substantial harm. The Center did not, ...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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