In the context of HIPAA, when is an organization considered a "covered entity"?

An organization is considered a "covered entity" under HIPAA when it transmits health information electronically related to a HIPAA transaction. This is crucial because the term "covered entity" is specifically defined in the HIPAA regulations to include healthcare providers, health plans, and healthcare clearinghouses that engage in electronic transactions.

The focus on the electronic transmission of health information is important because it reflects the intent of HIPAA to protect individuals' health information in a digital environment where the risks of breaches and unauthorized access are heightened. Simply providing medical services or employing healthcare professionals does not, in itself, trigger the requirements of being a covered entity; it is the electronic exchange of data that establishes that classification. The maintenance of physical records, while it involves sensitive health information, does not qualify an organization as a covered entity unless it also partakes in the electronic transmission of data related to transactions specified by HIPAA.