Talk to sales
Start for free

The common agency provision is a roadmap for covered entities and their business associates. It establishes the legal responsibilities and liabilities associated with HIPAA compliance.

Adhering to the common agency provision is a legal obligation and a testament to the trust and responsibility between patients and their healthcare providers. 


What is the common agency provision?

The common agency provision is a rule defined in the Code of Federal Regulations (CFR). It outlines the legal responsibilities of a covered entity under HIPAA. A covered entity refers to any healthcare provider, health plan, or healthcare clearinghouse that transmits or maintains PHI. The provision establishes direct and indirect liability for covered entities and business associates.

See more:


Direct liability

A covered entity's responsibility is to make sure that anyone who handles PHI on their behalf complies with HIPAA regulations. This involves taking the necessary steps to safeguard PHI and establishing a Business Associate Agreement (BAA) with any third-party entity that deals with PHI on their behalf. Failing to do so can lead to severe legal consequences for the covered entity.


Liability by association

The common agency provision also highlights the importance of not turning a blind eye to a business associate's non-compliance with HIPAA standards. Suppose a covered entity is aware of a business associate's failure to adhere to HIPAA regulations and does not take appropriate action. In that case, they can be indirectly liable for any breaches or violations. This provision emphasizes the need for collaboration between covered entities and their business associates to protect PHI.


The origin of the common agency provision

At the core of the common agency provision is agency law, which governs the rights, relations, and conduct of the agency and principal in various legal relationships. 

Agency law extends beyond HIPAA and applies to relationships such as employer-employee and buyer-seller. In healthcare compliance, agency law refers to the relationship and responsibilities between a covered entity and its business associates.


Implications of the common agency provision

The Office for Civil Rights (OCR), under the Department of Health and Human Services, serves as the regulatory watchdog for HIPAA compliance. The OCR enforces HIPAA rules and ensures that covered entities and their business associates adhere to the established standards.

Non-compliance with HIPAA regulations can result in severe sanctions. Therefore, covered entities and their business associates must remain vigilant and proactive in upholding these standards.


The role of business associate agreements

Signing a business associate agreement (BAA) is a necessary step for covered entities and their business associates. However, it is essential to note that simply signing a BAA does not absolve a covered entity from the responsibility of protecting PHI. 

The BAA establishes the legal obligations and expectations between the covered entity and the business associate. Still, the joint effort and collaboration between the two parties ensure proper PHI protection.


The importance of PHI protection

Healthcare providers and their business associates are legally obligated to safeguard confidential healthcare information. Failure to do so can lead to legal consequences, loss of patient trust, and reputational damage.


Staying compliant 

Healthcare organizations must prioritize compliance and data security as technology evolves. With the rise of electronic health records and digitization of patient records, the risk of privacy violations and data breaches grows. Organizations should implement strong security measures to protect patient information and stay up-to-date with HIPAA regulations.

See also: HIPAA Compliant Email: The Definitive Guide 

Start a 14-day free trial of Paubox Email Suite today