Vendor Management Matters: HIPAA Enforcement for $500K for Lack of a Business Associate Agreement

Daniel Solove
Founder of TeachPrivacy

HIPAA Enforcement - Business Associate Agreement 01

Advanced Care Hospitalists PL (ACH) has agreed to pay $500,000 to the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) for an alleged violation of HIPAA. OCR found that the company shared protected health information (PHI) with an unknown vendor without a business associate agreement (BAA).  According to the Resolution Agreement, “ACH impermissibly disclosed the PHI of 9,255 of its patients to a third party for billing processing services without the protections of a business associate agreement in place.”  The PHI later turned up on the vendor’s website.

This was clearly an unforced error in compliance — and an expensive one!   So easy to avoid too!  Providing PHI to a vendor without a business associate agreement is like going to work without your clothes on.  Vendor management is incredibly important, and organizations that fail to have proper agreements with their vendors that receive personal data are often punished severely by many privacy laws beyond HIPAA. The GDPR requires vendor agreements, and the FTC has found that companies engage in an unfair practice under the FTC Act Section 5 when they lack an adequate vendor agreement.

The main lesson from most privacy enforcement cases, whether HIPAA or otherwise: Do the basics!  So many cases involve failing to do obvious things.  There’s not much muddy ground in the land of enforcement.

The press release can be viewed here.  The Resolution Agreement can be viewed here.

Also of Interest Regarding HIPAA

HIPAA Enforcement Guide

HIPAA Training Guide

HIPAA Enforcement 2017: Another Big Year for HIPAA Enforcement

Why Is HIPAA Data Breach Enforcement Increasing? An Insurer’s View from Katherine Keefe

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This post was authored by Professor Daniel J. Solove, who through TeachPrivacy develops computer-based privacy training, data security training, HIPAA training, and many other forms of awareness training on privacy and security topics.  Professor Solove also posts at his blog at LinkedIn.  His blog has more than 1 million followers.

Professor Solove is the organizer, along with Paul Schwartz of the International Privacy + Security Forum (Apr. 3-5, 2019 in Washington, DC), an annual event that aims to bridge the silos between privacy and security. 

If you are interested in privacy and data security issues, there are many great ways Professor Solove can help you stay informed:
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