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A Business Associate Contract, or Business Associate Agreement, is a written arrangement that specifies each party's responsibilities when it comes to PHI. This means that organizations must have a Business Associate Agreement (BAA) for all three levels in order to meet the requirements of HIPAA.
Not only does it outline the relationship between the two parties, but it can also protect one of them in the event of a breach. Every time a healthcare provider or vendor hires a contractor that handles protected health information as part of their assigned work, both parties must sign a BAA.
The contract must describe permitted and required PHI uses for the business associate, and also 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.”
A BAA is a signed document that affirms a third-party service provider's willingness to accept responsibility for the safety of your clients' PHI, maintain appropriate safeguards, and comply with HIPAA requirements when they handle PHI on your behalf. BAAs are necessary if you're a covered entity.