Who bears the expense of the examination of the Business Associate's facilities, systems, and procedures for Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
To the extent that Covered Entity determines that such examination is necessary to comply with Covered Entity's legal obligation pursuant to HIPAA, the HIPAA Regulations, and the HITECH Act, Covered Entity or its authorized agents or contractors may, at Covered Entity's expense, examine Business Associate's facilities, systems, procedures (including but not limited to review of training procedures for Business Associate's staff) and records as may be necessary for such agents or contractors to certify to Covered Entity the extent to which Business Associate's security safeguards comply with HIPAA, the HIPAA Regulations, the HITECH Act, and this Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the expense of examining the Business Associate's facilities, systems, and procedures is borne by the Covered Entity. Specifically, Wellness Provider Therapies, P.A. (the Covered Entity) or its authorized agents or contractors may examine the Business Associate's facilities, systems, and procedures to certify compliance with HIPAA, the HIPAA Regulations, and the HITECH Act. This examination is conducted at the Covered Entity's expense.
This means that as a Degree Wellness franchisee (the Business Associate), you would not be directly responsible for covering the costs associated with these compliance examinations. However, it is important to note that this arrangement is contingent on the Covered Entity determining that such an examination is necessary to meet its legal obligations under HIPAA, the HIPAA Regulations, and the HITECH Act.
While the franchisee does not directly pay for the examination, it is crucial to maintain compliant facilities, systems, and procedures. Failure to do so could lead to the Covered Entity initiating an examination, and any necessary remediation or improvements to meet compliance standards would likely be the franchisee's responsibility. Therefore, franchisees should prioritize adherence to all relevant regulations and guidelines to avoid potential issues and maintain a smooth operational relationship with the Covered Entity.