What is the difference between a business associate and a covered entity?

The distinction between a business associate and a covered entity is crucial in understanding health information privacy regulations, particularly under the Health Insurance Portability and Accountability Act (HIPAA).

A covered entity is defined as a healthcare provider, health plan, or healthcare clearinghouse that transmits any health information in electronic form in connection with a HIPAA transaction. These entities are directly involved in providing or managing healthcare and have a primary relationship with patients that involves the collection and handling of protected health information (PHI).

On the other hand, a business associate is an individual or organization that performs certain functions or activities on behalf of, or provides services to, a covered entity that involves the use or disclosure of PHI. Business associates may provide services such as data analysis, billing, or administration, but they do not have a direct relationship with the patient. Instead, their role is to assist the covered entity in managing healthcare operations or providing treatment while adhering to HIPAA compliance regarding the handling of PHI.

This definition aligns with the statement that a covered entity transmits health information, while a business associate performs functions on behalf of a covered entity that involves PHI. Understanding this relationship helps in grasping the responsibilities and legal obligations of each party in protecting patient information under the