What are the key differences between a HIPAA-covered entity and a HIPAA business associate?

by | Feb 8, 2023 | HIPAA News and Advice

A HIPAA-covered entity refers to a healthcare provider, health plan, or healthcare clearinghouse that electronically transmits or maintains protected health information (PHI), while a HIPAA business associate is an external individual or organization that, as part of its services, handles PHI on behalf of the covered entity, thus establishing a contractual relationship with the covered entity and assuming responsibilities for safeguarding PHI in accordance with HIPAA regulations. In healthcare information management and privacy, HIPAA has established a framework to ensure the confidentiality, integrity, and security of PHI. This framework consists of two distinct entities: HIPAA-covered entities and HIPAA business associates. While both play important roles in the protection of PHI, they differ in their responsibilities, scope, and interactions within the healthcare ecosystem.

HIPAA-Covered EntityHIPAA Business Associate
Healthcare providers, health plans, and healthcare clearinghouses.External individual or entity that handles PHI on behalf of a covered entity.
Directly engaged in patient care, insurance services, or data transmission.Provides specialized services like claims processing, data analysis, legal representation, or cloud storage to covered entities.
Legally responsible for patient care, billing, and health insurance activities.Engages in a contractual relationship with covered entities through a business associate agreement.
Generates, maintains, and transmits PHI as part of core operations.Required to implement security measures as per the HIPAA Security Rule.
Subject to full HIPAA regulations: HIPAA Privacy Rule, Security Rule, and Breach Notification Rule.May engage subcontractors for certain PHI-related functions.
Direct relationships with patients; maintains electronic health records (EHRs).Subject to specific HIPAA requirements tied to PHI handling.
Implements administrative, technical, and physical safeguards to protect PHI.Obligated to notify covered entities in case of PHI breach.
Can be held accountable for PHI security under a business associate agreement.
Table: Clearly Differentiating HIPAA-Covered Entity from a Business Associate

A HIPAA-covered entity is a term that encompasses various organizations and entities engaged in healthcare services or operations. Specifically, a covered entity refers to a healthcare provider, health plan, or healthcare clearinghouse that electronically transmits or maintains PHI. These entities are at the forefront of patient care, ranging from hospitals and clinics to health insurance companies and medical billing entities. Under the HIPAA Privacy Rule, these entities are legally bound to ensure the confidentiality of PHI, limiting its disclosure and safeguarding it from unauthorized access. The HIPAA Privacy Rule grants patients certain rights, such as accessing their medical records and requesting corrections, while also requiring covered entities to institute administrative, technical, and physical safeguards to protect patient information.

A HIPAA business associate has a distinct but interconnected role within the healthcare system. A business associate is an external individual or organization that, through its services, handles PHI on behalf of a covered entity. This handling of PHI could involve functions such as claims processing, data analysis, legal representation, or even cloud storage services. A business associate enters into a contractual relationship with the covered entity, establishing a formal agreement that outlines the specific safeguards and responsibilities regarding PHI protection. This contractual arrangement is not only a legal requirement but also serves to extend the protection of PHI beyond the boundaries of the covered entity itself. The relationship between a covered entity and a business associate is symbiotic in nature. Covered entities often collaborate with various business associates to optimize their operations and enhance patient care. However, this collaboration introduces potential risks to PHI security, as the flow of sensitive information extends beyond the immediate control of the covered entity. To mitigate these risks, HIPAA requires covered entities to engage in due diligence when selecting business associates. This due diligence involves assessing the business associate’s capacity to safeguard PHI, implementing appropriate safeguards through a well-defined contract, and ensuring that the business associate complies with HIPAA regulations.

The responsibilities of a business associate under HIPAA are many. A business associate must comply with the HIPAA Security Rule, implementing a range of technical, administrative, and physical safeguards to protect PHI. This involves employing encryption methods, instituting access controls, conducting regular risk assessments, and devising incident response plans. A business associate must also adhere to the HIPAA Breach Notification Rule, which stipulates the notification process in the event of a breach of unsecured PHI. This ensures that both the covered entity and affected individuals are promptly informed, allowing for appropriate actions to be taken.

The contractual arrangement between a covered entity and a business associate is formalized through a HIPAA-compliant business associate agreement. This agreement outlines the specific responsibilities and expectations of the business associate concerning PHI protection. Key components of such agreements include the description of permissible uses and disclosures of PHI, the establishment of security measures, and the description of responsibilities in case of a data breach. The agreement also addresses the requirement for the business associate to ensure that its subcontractors, if applicable, also adhere to HIPAA regulations, thereby creating a chain of accountability. In recent years, the healthcare industry has evolved with technological advancements and the increasing reliance on external services. This has expanded the role of business associates in safeguarding PHI. As a result, business associates themselves may engage subcontractors to perform certain functions. In such cases, the original business associate remains accountable for PHI protection through the signing of subcontractor agreements, ensuring that PHI remains secure across the entirety of the healthcare service chain.


The distinction between HIPAA-covered entities and HIPAA business associates is important to understanding the complex network that safeguards protected health information. Covered entities serve as the foundation of patient care, while business associates extend their services to enhance operational efficiency, often handling sensitive PHI. The collaboration between these entities highlights the importance of maintaining strict security measures to maintain patient privacy and avoid HIPAA violations. This relationship between covered entities, business associates, and subcontractors reinforces the collective responsibility of the healthcare ecosystem to safeguard PHI and adopt the principles of HIPAA.

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?
3 Steps To HIPAA Compliance

Step 1 : Download Checklist.

Step 2 : Review Your Business

Step 3 : Get Compliant!

Our HIPAA compliance checklist will outline everything your organization needs to become fully HIPAA compliant. Fill in the form below to download it now.

View our privacy policy