Final answer:
Joe's company would be considered a Business Associate under HIPAA as it handles medical billing for hospitals but does not directly provide health care services, operate a health plan, or serve as a health care clearinghouse.
Step-by-step explanation:
Joe's company, which handles medical billing for several regional hospitals, would be classified under the Health Insurance Portability and Accountability Act (HIPAA) as a Business Associate of a covered entity. HIPAA defines a covered entity as one of the following: a health plan, a health care clearinghouse, or a health care provider that conducts certain health care transactions electronically. Based on this definition, since Joe's company is not providing direct care, operating as a health plan, or functioning as a clearinghouse but is instead handling billing information for hospitals (which are covered entities), it would not fall under the classification of a covered entity itself.
Instead, Joe's company is a Business Associate, which is defined by HIPAA as an individual or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or provides services to, a covered entity. Business Associates are directly liable for compliance with certain provisions of the HIPAA Privacy and Security Rules. Therefore, Joe's company must ensure the protection of patient information according to HIPAA standards and should have a Business Associate Agreement (BAA) in place with the hospitals it serves.