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A Business Associate Agreement (BAA) is a mandatory requirement under HIPAA legislation aimed at protecting protected health information (PHI). It establishes a formal relationship between a covered entity, like a medical group, and a third party, such as an IT hosting provider. The BAA defines how health information is used, maintained, and transmitted, creating a chain of responsibilities and liability among all parties involved. It includes guarantees related to service level agreements, incident response times, and disaster recovery expectations. The agreement specifies the permitted uses and disclosures of PHI, ensuring compliance and safeguarding sensitive health information.