Final answer:
A hybrid entity, according to the HIPAA Privacy Rule, is an organization that includes both HIPAA-covered and non-covered components, with healthcare functions that must comply with HIPAA and other functions that do not.
Step-by-step explanation:
Per the HIPAA Privacy Rule, a hybrid entity is defined as an organization that manages both covered and non-covered healthcare functions. This means that within the entity, there are both components that must comply with HIPAA regulations and components that do not engage in activities that require compliance with the Privacy Rule. To be considered a hybrid entity, an organization must designate in writing the healthcare components that are subject to HIPAA rules. Examples of such entities might include a university with a teaching hospital (where the hospital is covered by HIPAA but other parts of the university are not) or a company that has a healthcare division alongside various non-healthcare functions. The designation as a hybrid entity allows for the separation of functions to ensure that only the healthcare-related activities are subject to the stringent privacy rules concerning the protection of health information.