How does Degree Wellness define 'Unsecured PHI' and what regulations apply?

According to Degree Wellness's 2025 Franchise Disclosure Document, 'Unsecured PHI' is defined as Protected Health Information (PHI) that is not secured through the use of a technology or methodology specified by the Secretary of the U.S. Department of Health and Human Services or as otherwise defined in 45 C.F.R. § 164.402. This definition is part of the HIPAA Business Associate Agreement that Degree Wellness requires its franchisees to adhere to. This agreement is crucial because franchisees may be exposed to the PHI of patients as a result of the services they provide.

The agreement mandates that franchisees, as Business Associates, must abide by HIPAA, the HIPAA Regulations, and the HITECH Act with respect to PHI. This includes using and disclosing PHI only as permitted by the agreement, limiting such use and disclosure to the minimum amount necessary, and ensuring that any third parties receiving PHI also agree to maintain its confidentiality and notify Degree Wellness of any breaches. Franchisees are also required to report any breach of Unsecured PHI to Degree Wellness without unreasonable delay, and no later than 24 hours after becoming aware of the breach.

For a prospective Degree Wellness franchisee, this means understanding and strictly adhering to these regulations is critical. Failure to comply with HIPAA and related regulations can result in significant penalties. The franchisee must implement appropriate security measures to protect PHI and train employees on proper handling procedures. Additionally, the franchisee must have procedures in place for reporting breaches and mitigating any harm caused by unauthorized uses or disclosures of PHI. The franchisee must also ensure that any agents or subcontractors who have access to PHI agree to the same restrictions and conditions.

Overall, the HIPAA Business Associate Agreement highlights the importance of data protection and regulatory compliance within the Degree Wellness franchise system. Prospective franchisees should carefully review the agreement and seek legal counsel to fully understand their obligations and ensure they can meet the required standards for handling patient information.