I have an existing contract with a business associate that will renew automatically before April 14, 2003. Does this automatic renewal mean I have to modify the contract by April 14, 2003, to make it compliant with the HIPAA Privacy Rule's business associate contract provisions or can I still take advantage of the transition period?

Answer:

Evergreen or other contracts that renew automatically without any change in terms or other action by the parties and that exist by October 15, 2002, are eligible for the transition period. The automatic renewal of a contract itself does not terminate qualification for the transition period, or the transition period itself. Renewal or modification for the purposes of the transition provisions requires action by the parties involved.

For example, an automatic inflation adjustment to the price of a contract does not trigger the end of the transition period, nor make the contract ineligible for the transition period if the adjustment occurs before April 14, 2003.

Date Created: 12/19/2002
Last Updated: 03/14/2006