How does an organization determine if it is a HIPAA-covered entity?

by | Jul 23, 2023 | HIPAA News and Advice

An organization determines if it is a HIPAA-covered entity by assessing whether it engages in certain healthcare-related activities, such as transmitting health information electronically in connection with transactions for which the U.S. Department of Health and Human Services (HHS) has adopted standards, providing healthcare services and submitting health claims for payment, rendering it subject to HIPAA regulations, which cover healthcare providers, health plans, and healthcare clearinghouses, thereby requiring compliance with HIPAA’s privacy, security, and breach notification rules to safeguard individuals’ protected health information. HIPAA establishes stringent standards for entities that handle PHI, outlining rules and provisions that aim to protect patient privacy and data security.

Criteria for HIPAA-Covered EntitiesDescription
Understanding HIPAAFamiliarize with the HIPAA and its role in regulating PHI handling and privacy in healthcare.
Identifying Healthcare ActivitiesEvaluate the organization’s activities to determine involvement in healthcare functions like medical services, claims processing, or health coverage provision.
Healthcare ProvidersIf the organization provides medical services, diagnosis, or treatment, it is a healthcare provider under HIPAA (e.g., hospitals, clinics, physicians).
Health PlansIf the organization offers health insurance, manages healthcare benefit plans, or provides coverage (e.g., health insurance companies, employer plans, government programs).
Healthcare ClearinghousesIf the organization acts as an intermediary for processing and converting non-standard health information into standardized electronic formats (HIPAA-defined clearinghouses).
Electronic TransactionsAssess involvement in electronic healthcare transactions such as billing, claims submission, and electronic health records (EHRs).
Protected Health Information (PHI)Evaluate whether the organization handles individually identifiable health information electronically.
Business AssociatesDetermine if the organization offers services involving PHI for covered entities (HIPAA-defined business associates, e.g., billing, legal, or data storage services).
Exemptions and Special CasesConsider any exemptions or unique cases that might apply to the organization’s activities and healthcare involvement.
Legal ConsultationSeek legal advice from healthcare law experts when unsure about HIPAA compliance status.
Self-AssessmentInternally review activities and interactions in the healthcare sector to determine alignment with HIPAA criteria.
HIPAA TrainingEducate relevant personnel about HIPAA requirements, especially those handling data and decision-making.
Ongoing MonitoringRecognize that HIPAA coverage might change due to evolving operations or regulations, necessitating regular assessments.
DocumentationMaintain accurate records detailing the organization’s determination, reasoning, and supporting information.
Compliance MeasuresImplement privacy, security, and breach notification measures if categorized as a HIPAA-covered entity to ensure regulatory compliance and data protection.
Table: Criteria for Determining HIPAA-Covered Entities

A HIPAA-covered entity is an organization that engages in specific healthcare activities that trigger its compliance obligations under HIPAA. The U.S. Department of Health and Human Services (HHS) has categorized covered entities into three primary categories: healthcare providers, health plans, and healthcare clearinghouses. Each of these categories covers distinct types of organizations that participate in various aspects of the healthcare industry. Healthcare Providers include entities that furnish medical services to patients, ranging from hospitals and physicians to clinics and dentists. These organizations conduct transactions that involve the electronic exchange of health information, which is necessary to HIPAA’s scope. Providers who electronically submit health information for purposes such as billing and claims fall under this category. Healthcare providers also include institutions that provide services like medical equipment and laboratory testing. If an organization delivers healthcare services and engages in electronic transactions, it is likely to be classified as a covered entity under HIPAA.

Health plans include various entities that provide or pay for medical care. This includes health insurance companies, government health programs, employer-sponsored health plans, and even health maintenance organizations (HMOs). If an organization’s function revolves around offering health coverage or managing healthcare benefit plans, it is likely to be designated as a HIPAA-covered entity within the health plan category. This extends to both public and private health plans, reinforcing the HIPAA’s regulatory framework. Healthcare Clearinghouses play an important role in facilitating the conversion of non-standard health information into standardized electronic formats. These entities are intermediary platforms that assist in the processing and submission of claims data from healthcare providers to health plans. They act as data aggregators, enhancing the efficiency of electronic transactions within the healthcare industry. If an organization is engaged in this function of data transformation and transmission, it falls under the healthcare clearinghouse category.

The determination of whether an organization is a HIPAA-covered entity is not solely contingent upon its primary functions. Even if an organization’s core activities align with healthcare services, health plans, or healthcare clearinghouses, certain exceptions and nuances exist that might influence its classification. For instance, some healthcare-related activities might be exempt from HIPAA regulations due to specific legal designations or regulatory provisions. The Health Information Technology for Economic and Clinical Health (HITECH) Act, a legislative component of the American Recovery and Reinvestment Act of 2009, introduced the concept of “business associates.” Business associates are individuals or entities that provide certain services to covered entities involving the use or disclosure of PHI. Examples include third-party billing companies, legal firms handling healthcare matters, and companies providing cloud storage solutions for healthcare data.

To ascertain its status as a HIPAA-covered entity or business associate, an organization must undertake an evaluation of its activities, services, and interactions within the healthcare ecosystem. This involves identifying whether the organization handles PHI, engages in electronic transactions, or provides services that fall within the scope of HIPAA regulations. Should the organization qualify as a covered entity or business associate, it becomes subject to HIPAA’s stringent requirements concerning privacy, security, and breach notifications.


The determination of whether an organization is a HIPAA-covered entity rests on its involvement in healthcare-related activities and the electronic exchange of health information. The framework’s categories of healthcare providers, health plans, and healthcare clearinghouses involve entities that contribute to different facets of healthcare services. The expansion of HIPAA’s scope to include business associates indicates the evolving nature of regulatory compliance within the healthcare industry. As healthcare technology advances and healthcare services diversify, maintaining an accurate understanding of one’s status as a HIPAA-covered entity is necessary for protecting patient privacy, data security, and regulatory adherence.

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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