Glossary · Strategy

What is BAA (Business Associate Agreement)?

Definition

A Business Associate Agreement (BAA) is a contract required under HIPAA between a covered entity, such as a healthcare provider or health plan, and a business associate that creates, receives, maintains or transmits protected health information on its behalf. The BAA sets out how the vendor must safeguard that information, report breaches and handle the data when the relationship ends.

Why it matters for your business

Any AI tool, automation platform, transcription service or developer that handles patient information for a covered entity generally needs a signed BAA, and that includes model API providers. Many vendors offer BAAs only on certain plans or for specific services, and consumer AI chat apps are typically not covered. Using an uncovered tool with patient data can be a HIPAA violation even if nothing is breached. A BAA is necessary but not sufficient: access controls, audit logs and minimum necessary data handling still apply. Confirm the details with your compliance counsel.

Example

A physical therapy practice wants an AI assistant that drafts visit notes from session recordings. Before any build, it confirms that the transcription service, the language model provider and the hosting platform will each sign a BAA covering the services used, and that the development firm signs one too, since it may access recordings during testing.

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