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Affiliated Covered Entity (ACE)

What does ACE stand for in healthcare compliance?

In healthcare compliance, ACE is an abbreviation that stands for Affiliated Covered Entity. 


What is an Affiliated Covered Entity?

Formed for the purpose of maintaining compliance with the Health Insurance Portability and Accountability Act’s Privacy Rule, an affiliated covered entity is a group of legally separate covered entities that considers themselves a single covered entity because they are affiliated as a result of some common control or ownership. Common control is characterized by another entity holding influential direct or indirect power over another entity, while common ownership is defined as another entity holding a certain amount of interest in each entity. To be considered an affiliated covered entity, there must be a written document designating the covered entities as part of the affiliated covered entity. 


Some benefits of participating in an affiliated covered entity include the following:


    • Appointing only one privacy officer

    • Appointing only one security officer

    • Creating only one notice of privacy practices for patients

    • Offering the same training programs

    • Remaining compliant with one set of HIPAA policies and procedures

    • Only using one business associate contract

    • Sharing one security risk analysis

    • Using one risk management plan


The main disadvantage of being an affiliated covered entity is having to share the Health Information Portability and Accountability Act liability. 


An example of an affiliated covered entity is the Palmer College of Chiropractic Affiliated Entity. According to the Palmer College of Chiropractic, this affiliated entity is made up of the following covered entities:


    • Palmer College of Chiropractic Florida

    • Palmer College Foundation

    • Palmer College of Chiropractic West


As you can imagine, being part of an affiliated covered entity would be very handy in cases where several covered entities were involved simply for the fact that it would save time and resources. Following one set of procedures, offering similar programs from covered entity to covered entity, and only creating one notice of privacy practices would be efficient. 


It is important that you don’t confuse affiliated covered entities and organized health care arrangements because even though the two share some similarities, there are also some great differences. Similarities between affiliated covered entities and organized health care arrangements include using one joint notice of privacy practices and sharing patient health information within the network. Differences between affiliated covered entities and organized health care arrangements include the fact that affiliated covered entities are considered one entity because of common control or ownership, while organized health care arrangements are characterized by their public acknowledgment of being part of an organized health care arrangement. 


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