Business Associates Face the Same HIPAA Penalties as Covered Entities: HIPAA & HITECH Act Blog by Jonathan P. Tomes

The Attorney General of New Jersey recently announced a $200,000 settlement for a HIPAA violation with a business associate, one of the classic examples of a business associate, a transcription service. (Remember that the Office for Civil Rights (“OCR”) of the Department of Health and Human Services (“HHS”) is not the only entity that can enforce HIPAA.) Best Medical Transcription is a business associate of Virtua Medical Group, a network of medical and surgical practices in southern New Jersey. Best Medical uploaded completed transcription to a file transfer protocol (“FTP”) website that was accessible over the internet without the need for any authentication. Google had even indexed the files, and they could be found using search terms that included information contained in the files.

New Jersey alleged that Best Medical Transcription had failed to conduct an accurate and thorough risk assessment of potential risks to the confidentiality, integrity, and availability of electronic protected health information (“EPHI”) and had failed to implement reasonable and appropriate safeguards to reduce risks and vulnerabilities. Nor had it implemented policies and procedures to prevent the improper alteration or destruction of EPHI. See Jessica Davis, “New Jersey slams Best Medical Transcription with $200K fine for 2016 breach,” Healthcare IT News, Nov. 5, 2018, at

This enforcement action is also further evidence of the growing enforcement of HIPAA by state attorneys general, who apparently recognize that health care entities may well have the funds to make financial settlements. HHS listed ten such settlements in 2018. The lowest fine was $99,959, and the highest was $1,150,000.

Alice here: Yes, once again, I am here to try to sell things to keep you and us in business. If you need help with your risk analysis, either initially or for an update, Jon Tomes has written a Risk Analysis ToolKit to provide the structure and tools to help you complete the requirement under HIPAA. You and your risk analysis team can fill it out and document your decisions as to what is reasonable and appropriate for you to adopt in the way of policies and procedures and be done with it. Or you could send your completed risk analysis to Jon to review and render his professional opinion as the country’s leading HIPAA expert (IMO) as to whether it is sufficient to keep you from getting that free trip to Leavenworth or that very expensive trip to the bank. If you have Jon’s Compliance Guide to HIPAA and the DHHS Regulations, 6th edition, with the accompanying HIPAA Documents Resources Center CD, also 6th edition, you can find the Risk Analysis ToolKit on the CD. It is also available with a review by Jon at Also, Jon Tomes presented a webinar recently on “How to Do a HIPAA and HITECH Risk Analysis.” You can buy a recording of it at Jon is also writing a Risk Analysis Update ToolKit, which will be available for you in the near future on the Premium Member section of our website. Please stay tuned for our announcement when it is up and running for you there. Also, include in your risk analysis the lack of a business associate agreement if you are considering hiring a business associate or a downstream business associate.

If you need guidance on how to draft the policies and procedures that your risk analysis or your newly updated risk analysis has shown are reasonable and appropriate for your organization, Jon has also written The Complete HIPAA Policies and Procedures Guide, with the accompanying Cd of several dozen HIPAA policies and procedures templates for you to adapt to your situation. That book also contains a chapter by me on how to write in general, but more specifically on how to write a good policy.

Make sure that you train your entire workforce on HIPAA in general and on the HIPAA policies and procedures according to who needs to know what to perform their duties for you. If you need handy HIPAA training in general, consider Jon’s training video and training manual in either of two forms available here: Or you could hire Jon to present HIPAA training onsite to your workforce. Just contact him at or 816-527-3858.

Keep your written documentation of all of these HIPAA compliance efforts where you can find them easily and quickly if HHS shows up demanding your HIPAA compliance documentation. We recommend keeping all of it in Your Happy HIPAA Book. Jon included tabs in the three-ring binder for everything that you need to document and a checklist for each tab. I recommend adding the date that you check off each item in each checklist, as one of our clients suggested to us.

If you have had a security incident that you were unsure as to what exactly to do about, or if you are concerned that you may have one, consider reading Jon’s book How to Handle HIPAA and HITECH Act Breaches, Complaints, and Investigations: Everything You Need to Know.

A sample business associate agreement policy and a sample business associate agreement are posted in the Premium Member section of our website at

As always, thanks for reading Jon’s blog, buying his books and other HIPAA compliance tools, attending our seminars and webinars, and hiring Jon for HIPAA consulting and training. We wish you every success with your HIPAA compliance efforts.



seo by: k.c. seo