By David Holtzman, CIPP/G, and Erin McMillan

With the changes to the HIPAA Privacy and Security Rules, the responsibilities and relationships between covered entities and their vendors have moved to the forefront of information-security management. Particularly, renewed emphasis has been placed on vendor security management and the responsibility that covered entities bear on performing appropriate due diligence.

Covered entities should consider management of their information security risks in the formation of a vendor contract to termination and beyond. Your organization should entrust its protected health information (PHI) to vendors who demonstrate willingness and/or ability to apply appropriate safeguards as called for in the Security Rule and the applicable portions of the Privacy Rule. A security questionnaire is an appropriate instrument to evaluate a vendor’s readiness to comply with the covered entity’s security expectations. Factors to consider in selecting a potential vendor include the level of access to PHI, performance specifications and the duration of the contract. 

Prior to establishing a relationship with a vendor, it is important for the covered entity to assess whether the vendor qualifies as a business associate (BA). The HIPAA Rules define a BA as an individual (or entity) other than a member of the covered entity’s workforce who assisted or performed a function or activity on behalf of the covered entity that involves creating, receiving, maintaining or transmitting PHI. In addition, the definition of a BA was recently expanded to include subcontractors of a BA. This means that BAs must have a business associate agreement (BAA) in place with any subcontractor who handles PHI on behalf of the BA.

Once a covered entity is contemplating a relationship with a vendor, there must be some type of contract, or BAA, to memorialize privacy and security assurances. New BA agreements put into place after January 25, 2013, and existing agreements updated or modified after that date must reflect the omnibus changes. All BA agreements in effect prior to that date and not scheduled for change must be updated to include the requirements called for in the Omnibus Rule by September 23. When updating BAAs, covered entities should consider developing agreements that meet their individual business requirements, such as notifications regarding material changes in a vendor’s business model (how or where information is stored), new relationships such as additional subcontractors and requests for PHI by third parties; e.g., OCR, law enforcement, etc.. BAAs should also include documentation of compliance requirements and third-party evaluation requirements.

While the changes brought by the Omnibus Rule do not alter the requirements of the original HIPAA Rules obligating a covered entity to monitor activities of its vendors, it may be sound business to monitor security and privacy issues arising from vendor services. Monitoring should be based on the level of risk presented to the covered entity. For example, vendors that host PHI will warrant a higher necessity for monitoring and maintenance compared to vendors who only access PHI while onsite.

Monitoring can include requesting and reviewing security-related documentation from vendors such as policies, proof of training, proof of background investigations, third-party security evaluations and facility assessments such as SSAE 16 reports. If the vendor is hosting data or systems, the documentation requested may be more specific, like proof of backups, actual contingency test reports, proof of terminations and destruction certificates. Some entities may consider site visits or require third-party security assessments. To assist their monitoring activities, organizations now have access to products and services that provide management of BAs by identifying which vendors are BAs and what requirements need to be monitored.

Monitoring to ensure vendors are compliant with the entity’s security expectations is especially significant to avoid a potential incident. BAAs should advise vendors on the organization’s process for dealing with a breach, documentation and notification (timelines). This is important because under the final rule, an integrated approach is to be taken to analyzing events around the breach that involves both the covered entity and the business associate. Maintenance of incidence reports by BAs and covered entities must be managed proficiently since this material is certainly reviewable and will likely be requested by OCR in the event of an investigation.

Finally, management of vendor activities does not cease on the termination date specified in the BAA. Requirements detailing the disposition of both access and retention of data should be included in the contract. The contract or addendum should also specify how to eliminate and document any and all access to patient information and instructions for returning or destroying all patient information in their possession. This documentation will be very important should a breach occur later involving a covered entity's information after that entity has terminated its relationship with the vendor.

David Holtzman, CIPP/G, is vice president of privacy and security compliance services for CynergisTek. He is considered a subject-matter expert in health information privacy policy and compliance issues involving the HIPAA Privacy, Security and Breach Notification Rules. Holtzman has over 10 years of experience in developing, implementing and evaluating health information privacy and security compliance programs from both government and private-sector positions. Prior to CynergisTek, Holtzman served on the health information privacy team at the Department of Health & Human Services, Office for Civil Rights (OCR/HHS), where he served as the senior advisor for health information technology and the HIPAA Security Rule. He led many OCR initiatives including the effort to integrate the administration and enforcement of the HIPAA Security Rule by establishing workflows for processing, identifying and investigating alleged violations of the rule. Prior to joining HHS, David was the privacy & security officer for Kaiser Permanente’s Mid-Atlantic Region where he was responsible for implementing and directing the continuing compliance with the HIPAA Privacy and Security rules. David is a graduate of the Western New England College of Law and the Brockport College of the State University of New York. He is admitted to the practice of low in New York and Illinois.

Erin McMillan specializes in privacy policies, processes and procedures as a compliance consultant for CynergisTek with cross training in security. McMillan has participated in HIPAA security assessments, security controls audits, privacy assessments, OCR mock-audit exercises, Safe Harbor strategy sessions and multiple HIPAA information security controls audits. Prior to joining CynergisTek, McMillan was a law clerk for a private firm, where she assisted lead counsel in representation of clients and participated in trial preparation. She earned her Juris Doctorate degree from the University of Oklahoma College of Law and served as chief counsel as a licensed legal intern for the OU Legal Clinic. During her time with the OU Legal Clinic, McMillan represented several clients and participated in mediation, attended resolution conference hearings, conducted discovery and interviewed and corresponded with clients, witnesses and opposing parties and counsel. McMillan is admitted to the practice of law in Texas.


If you want to comment on this post, you need to login.


Board of Directors

See the esteemed group of leaders shaping the future of the IAPP.

Contact Us

Need someone to talk to? We’re here for you.

IAPP Staff

Looking for someone specific? Visit the staff directory.

Learn more about the IAPP»

Daily Dashboard

The day’s top stories from around the world

Privacy Perspectives

Where the real conversations in privacy happen

The Privacy Advisor

Original reporting and feature articles on the latest privacy developments

Privacy Tracker

Alerts and legal analysis of legislative trends

Privacy Tech

Exploring the technology of privacy

Canada Dashboard Digest

A roundup of the top Canadian privacy news

Europe Data Protection Digest

A roundup of the top European data protection news

Asia-Pacific Dashboard Digest

A roundup of the top privacy news from the Asia-Pacific region

Latin America Dashboard Digest

A roundup of the top privacy news from Latin America

IAPP Westin Research Center

Original works. Groundbreaking research. Emerging scholars.

Get more News »

IAPP Communities

Meet locally with privacy pros, dive deep into specialized topics or connect over common interests. Find your Community in KnowledgeNet Chapters, Sections and Affinity Groups.

IAPP Job Board

Looking for a new challenge, or need to hire your next privacy pro? The IAPP Job Board is the answer.

Join the Privacy List

Have ideas? Need advice? Subscribe to the Privacy List. It’s crowdsourcing, with an exceptional crowd.

Find a KnowledgeNet Chapter Near You

Talk privacy and network with local members at IAPP KnowledgeNet Chapter meetings, taking place worldwide.

Find more ways to Connect »

Find a Privacy Training Class

Two-day privacy training classes are held around the world. See the complete schedule now.

NEW! Raise Staff Awareness

Equip all your data-handling staff to reduce privacy risk, with Privacy Core™ e-learning essentials.

Online Privacy Training

Build your knowledge. The privacy know-how you need is just a click away.

The GDPR requires 75,000 DPOs

What’s the formula for DPO success? IAPP CIPP/E and CIPM training, certifications and our global privacy conferences.

Upcoming Web Conferences

See our list of upcoming web conferences. Just log on, listen in and learn!

Train Your Team

Get your team up to speed on privacy by bringing IAPP training to your organization.

Learn more »

CIPP Certification

The global standard for the go-to person for privacy laws, regulations and frameworks

CIPM Certification

The first and only privacy certification for professionals who manage day-to-day operations

CIPT Certification

The industry benchmark for IT professionals worldwide to validate their knowledge of privacy requirements

NEW! FIP Designation

Recognizing the advanced knowledge and issue-spotting skills a privacy pro must attain in today’s complex world of data privacy.

Certify Your Staff

Find out how you can bring the world’s only globally recognized privacy certification to a group in your organization.

Learn more about IAPP certification »

IAPP-OneTrust PIA Platform

Simplify privacy impact assessments with this cloud-based customizable platform - free to IAPP members!

72% say privacy is now a board-level concern

Find out more about privacy governance in the IAPP-EY Annual Privacy Governance Report 2016.

Privacy Vendor List

Find a privacy vendor to meet your needs with our filterable list of global service providers.

IAPP Communities

Meet locally with privacy pros, dive deep into specialized topics or connect over common interests. Find your Community in KnowledgeNet Chapters, Sections and Affinity Groups.

More Resources »

Time to Get to Work at the Congress

It's almost here! Thought leadership, a thriving community and unrivaled education...the Congress prepares you for the challenges ahead. Register now!

Plan for the Summit

The world’s premier privacy conference returns with the sharpest minds, unparalleled programs and preeminent networking opportunities. Registration opens December 19!

Intensive Education at the Practical Privacy Series

This year's Series spotlights Data Breach, FTC and Consumer Privacy, GDPR and Government privacy issues. It’s the education you need NOW. Early bird ends Nov. 4!

Speak at the Symposium

The call for speakers is open! The Symposium returns to Toronto this Spring and programming is now underway. Looking to share your privacy prowess? Submit by November 20!

Sponsor an Event

Increase visibility for your organization—check out sponsorship opportunities today.

More Conferences »

Become a Member

Start taking advantage of the many IAPP member benefits today

Corporate Members

See our list of high-profile corporate members—and find out why you should become one, too

Renew Your Membership

Don’t miss out for a minute—continue accessing your benefits

Join the IAPP»