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A business associate contract is not required with persons or organizations whose functions, activities, or services do not involve the use or disclosure of PHI, and where any access to PHI by such persons would be incidental, if at all.
The agreement must describe permitted and required PHI uses for the business associate and state that the business associate will not use or further disclose the protected health information other than as permitted or required by the contract or as required by law.
While a business associate must agree to comply with HIPAA Rules and is responsible for ensuring the confidentiality, integrity, and availability of PHI in its possession, it is the responsibility of a covered entity to ensure that all business associates are complying with HIPAA Rules.
A Business Associate Contract, or Business Associate Agreement, is a written arrangement that specifies each party's responsibilities when it comes to PHI. HIPAA requires Covered Entities to only work with Business Associates who assure complete protection of PHI.