Can cloud service providers be classified as HIPAA-covered entities?

by | Mar 3, 2023 | HIPAA News and Advice

No, cloud service providers themselves cannot be classified as HIPAA-covered entities; however, they can be considered business associates if they handle PHI on behalf of HIPAA-covered entities and are subject to certain compliance requirements under the HIPAA regulations. In healthcare information management, one encounters both technology and regulatory frameworks, with HIPAA standing as a link for safeguarding sensitive patient data. Cloud computing introduces new dimensions to this scenario, giving rise to inquiries about the classification of cloud service providers under the HIPAA framework.

Important Terms Related to HIPAA EntitiesExplanation
HIPAA OverviewHIPAA safeguards health information privacy and security.
It governs covered entities and business associates handling PHI.
HIPAA-Covered EntitiesIncludes healthcare providers, health plans, and healthcare clearinghouses.
Directly involved in electronic health transactions and PHI management.
Business AssociatesPerform services related to PHI for covered entities.
Examples: billing companies, transcription services, and data hosting providers.
Cloud Service Providers (CSPs)Offer cloud-based computing services: infrastructure, platform, software.
Enable remote data storage, processing, and management.
Classification of CSPsCSPs aren’t covered entities under HIPAA.
Not engaged in direct healthcare services or transactions.
Business Associate DeterminationCSPs can be business associates if they handle PHI for covered entities or other business associates.
Even if access is controlled by the entity, CSP is a business associate if it maintains PHI.
Maintenance of PHIClassification as a business associate hinges on whether the CSP maintains PHI.
Handling PHI, even with controlled access, defines business associate status.
Business Associate Agreements (BAAs)Formalize business associate relationships.
Specify the responsibilities, liabilities, and compliance obligations of CSPs regarding PHI.
Compliance ObligationsOnce a business associate, CSPs must follow HIPAA compliance requirements.
Includes security measures, risk assessments, and breach notification rules.
Context-Dependent ClassificationDetermining CSP as a business associate depends on the extent of PHI handling within their services.
Context is important.
Healthcare-Specific Cloud SolutionsMany CSPs offer HIPAA-compliant cloud solutions.
Enhanced security features, encryption, access controls, and audit trails.
Cater to healthcare industry needs.
Evolution of the Healthcare LandscapeCollaboration between CSPs and healthcare entities is necessary.
Balancing patient data security with cloud computing benefits.
Legal and Contractual DynamicsCSP classification involves legal and contractual rules.
Business associate agreements clarify roles and responsibilities.
Focus on Data Security and PrivacyBoth CSPs and healthcare entities prioritize data security and privacy.
Compliance ensures the protection of sensitive patient information.
Table: Important Terms Related to Classying CSPs as HIPAA-Covered Entities

HIPAA plays a role in maintaining the privacy and security of protected health information (PHI). It involves not only healthcare providers, health plans, and healthcare clearinghouses (collectively referred to as covered entities) but also extends its scope to certain entities that provide services to covered entities and require access to PHI. These are termed business associates. Business associates are bound by HIPAA regulations through legal agreements to ensure the safeguarding of PHI in their possession. The Health Information Technology for Economic and Clinical Health (HITECH) Act, introduced amendments to HIPAA in 2009, strengthening its provisions and expanding its reach to include business associates.

Cloud service providers (CSPs) are entities that offer computing resources and services over the internet. These include infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). The allure of CSPs lies in their scalability, cost-efficiency, and global accessibility. In the healthcare sector, CSPs have become potent facilitators of data storage, processing, and sharing, fueling the potential for enhanced patient care, research, and administrative efficiency. The question at hand revolves around the classification of CSPs within the HIPAA framework. To address this, one must discern the relationship between CSPs, covered entities, and business associates. CSPs themselves, in their capacity as providers of computing resources, do not inherently fall within the definition of covered entities. Covered entities, as per HIPAA, primarily include healthcare providers, health plans, and healthcare clearinghouses that engage in electronic transactions of health information. CSPs, in contrast, do not engage in healthcare services or transactions themselves; rather, they offer the technological infrastructure that can be leveraged by covered entities and business associates.

The role of CSPs extends beyond mere infrastructure provision. Many covered entities and business associates utilize CSPs to store, process, or transmit PHI. This necessitates a closer examination of whether CSPs can be classified as business associates. HIPAA defines a business associate as an entity that creates, receives, maintains, or transmits PHI on behalf of a covered entity. The regulatory scope also includes entities that provide services involving PHI access. While CSPs themselves may not access PHI for their purposes, their services can be configured in ways that involve PHI handling on behalf of covered entities or other business associates. This problem was addressed through the HIPAA Omnibus Rule, issued in 2013. The rule clarified that CSPs can indeed be classified as business associates if they handle PHI on behalf of covered entities or other business associates. This hinges on the concept of “maintenance” of PHI. If a CSP stores or processes PHI, even if the access to the data is solely controlled by the covered entity or another business associate, the CSP assumes the role of a business associate. This classification brings with it the legal obligations of complying with HIPAA regulations relevant to business associates, including the implementation of appropriate security measures, signing of business associate agreements, and adherence to breach notification requirements.

The classification of CSPs as business associates is context-dependent. Not all interactions between CSPs and healthcare entities automatically confer business associate status. The determinant factor is the nature of services provided by the CSP and the extent to which PHI is involved. HIPAA’s regulatory reach also intertwines with the contractual standing between covered entities, business associates, and CSPs. Clear business associate agreements define responsibilities, liabilities, and compliance obligations. CSPs, cognizant of the evolving healthcare environment, have taken steps to align their services with HIPAA requirements. Many CSPs now offer dedicated healthcare-specific cloud solutions that are designed to meet security and compliance benchmarks. These solutions include advanced encryption mechanisms, access controls, audit trails, and data segmentation to ensure the integrity and confidentiality of PHI.


While cloud service providers themselves are not classified as covered entities under HIPAA, their role as potential business associates cannot be overlooked. The determinant factor is how they deal with healthcare entities and handle PHI. If a CSP stores, processes, or transmits PHI on behalf of covered entities or other business associates, it is considered a business associate and is subject to the corresponding regulatory obligations. As the healthcare ecosystem continues to evolve with technology developments, the collaboration between CSPs, covered entities, and business associates must be observed, ensuring that the benefits of cloud computing are in line with the requirements of patient data security and privacy.

HIPAA Covered Entity Topics

What is the definition of a HIPAA-covered entity?
How does an organization determine if it is a HIPAA-covered entity?
Are all healthcare providers considered HIPAA-covered entities?
What obligations does an entity covered by HIPAA have concerning patient data?
Do insurance companies fall under the category of entities covered by HIPAA?
What is a covered entity under HIPAA?
Who would not be considered a covered entity under HIPAA?
Is an employer a covered entity under HIPAA?
Who should HIPAA complaints be directed to within the covered entity?
What are the penalties for a HIPAA-covered entity that breaches patient confidentiality?
Are health technology companies automatically considered HIPAA-covered entities?
What distinguishes a HIPAA entity from non-covered entities?
Can a HIPAA-covered entity share medical records with another such entity without patient consent?
How often should HIPAA-covered entities review their compliance procedures?
What types of training must employees of an entity covered by HIPAA undergo?
How do entities covered by HIPAA handle data breaches?
What is the role of a privacy officer in a HIPAA-covered entity?
Are dental practices considered HIPAA-covered entities?
Can a patient sue a HIPAA-covered entity for a data breach?
How are HIPAA-covered entities audited for compliance?
What are the reporting obligations of a HIPAA entity in case of data exposure?
How do third-party vendors interact with HIPAA-covered entities?
Can a business associate be considered a HIPAA-covered entity?
How should a HIPAA entity respond to unauthorized access to protected health information?
What security measures must entities covered by HIPAA implement?
Are there exemptions for certain types of entities covered by HIPAA?
How long must a HIPAA-covered entity retain medical records?
What patient rights are recognized by entities covered by HIPAA concerning their personal data?
Are telemedicine platforms typically classified as HIPAA-covered entities?
What distinguishes business associates from HIPAA-covered entities?
How can patients file complaints against a HIPAA entity?
What is the significance of the Notice of Privacy Practices for a HIPAA-covered entity?
How do international medical tourism practices intersect with HIPAA-covered entities?
Are there specific encryption standards that a HIPAA-covered entity must adhere to?
How do federal and state laws regarding patient privacy relate to HIPAA-covered entities?
How do HIPAA-covered entities handle minor patient information?
Are pharmacies and drug stores universally categorized as HIPAA-covered entities?
How can a HIPAA-covered entity ensure compliance when integrating new technologies?
What are the key differences between a HIPAA-covered entity and a HIPAA business associate?
Are research institutions always considered HIPAA-covered entities?
What are the boundaries of marketing activities for an entity covered by HIPAA?
Can cloud service providers be classified as HIPAA-covered entities?
How should a HIPAA entity prepare for an official audit or review?
What documentation is essential for a HIPAA-covered entity’s compliance processes?
How often do regulations impacting HIPAA-covered entities get updated?
Do educational institutions fall under the scope of entities covered by HIPAA?
How do mobile health apps and digital health tools intersect with HIPAA-covered entities?
What is the role of electronic health record systems in a HIPAA-covered entity?
How does the Health Information Exchange (HIE) network impact HIPAA-covered entities?
Are mental health professionals bound by the same rules as other HIPAA-covered entities?
How do mergers and acquisitions impact the status of a HIPAA-covered entity?
Can patients access all their health data held by a HIPAA-covered entity?
Are billing and invoicing data handled differently by entities covered by HIPAA than medical data?
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