Building Trustworthy Relationships Between Healthcare Organizations and Third-Party Vendors

Healthcare organizations routinely share protected health information (PHI) with third-party vendors that support services such as release of information processing, revenue cycle operations, and artificial intelligence (AI)-enabled documentation systems. Because these vendors often create, receive, maintain, or transmit sensitive patient information, healthcare organizations must establish strong governance processes to manage privacy, security, documentation integrity, retention requirements, and regulatory compliance throughout the vendor relationship lifecycle.

Health information (HI) professionals play a central role in these oversight activities by helping evaluate vendor access to PHI and reviewing data management practices. They also support business associate agreement requirements and monitor compliance with organizational information governance standards.

HI professionals are well-suited to oversee vendor-related information management risks because they understand how healthcare data is created, accessed, disclosed, retained, and maintained across operational workflows. Their responsibilities may include participating in vendor risk assessments, validating minimum necessary data access, and helping operational teams address compliance gaps involving third-party access to patient information.

As healthcare organizations adopt more interconnected technologies and vendor-supported platforms, HI professionals are assuming broader responsibilities related to information governance, operational resilience, and regulatory oversight. They increasingly use AI technologies to support ambient clinical documentation, automated coding assistance, speech recognition, and workflow automation. Because these systems directly affect documentation integrity, data quality, privacy, retention practices, and regulatory compliance, HI professionals play an important role in evaluating governance risks associated with AI-generated health information.

 How To Build Trust

Trustworthy vendor relationships are built through transparency, clearly defined responsibilities, effective communication, and documented safeguards. Before entering a partnership, healthcare organizations should carefully evaluate:

• A vendor’s cybersecurity maturity
• Access to sensitive information
• Subcontractor involvement
• Incident response capabilities
• Potential impact on patient care or business continuity

Understanding how vendors manage and protect data is essential for reducing operational and compliance risk. Clearly defined contractual expectations further reinforce accountability between healthcare organizations and vendors. Business associate agreements and related contracts should address areas such as permitted uses of PHI, subcontractor oversight, and breach notification timelines. HI professionals help ensure these agreements function as operational governance tools rather than routine administrative documents.

Strong third-party governance also requires a structured risk management process that continues throughout the vendor relationship. Before onboarding a vendor, organizations should evaluate issues such as data sensitivity, system connectivity, and patient safety implications. HI professionals support this review by identifying minimum necessary requirements, confirming appropriate records management controls, and mapping how health information will be used across systems and workflows.

Ongoing monitoring remains essential because vendor risks evolve over time. Organizations may take steps such as conducting periodic reassessments, evaluating audit reports, and testing response procedures involving internal teams and external vendors. During these activities, HI professionals help maintain visibility into privacy risks, release-of-information practices, documentation integrity concerns, and record lifecycle management issues.

Operational disruptions involving vendors can quickly create broader compliance and patient care challenges. A notable example involved the Perry Johnson & Associates (PJ&A) medical transcription breach, which affected multiple healthcare organizations after attackers compromised a third-party vendor responsible for transcription services. Incidents like this demonstrate how disruptions involving vendors can create significant operational, privacy, and regulatory challenges for covered entities.

Healthcare organizations may need to rapidly assess whether PHI was exposed, evaluate workflow disruptions, coordinate breach notification activities, and review downstream vendor dependencies. HI professionals often support these efforts through efforts such as documentation review, disclosure analysis, and downtime coordination.

10 Steps to Strengthen Relationships with Vendors

Organizations can strengthen vendor relationships and improve governance by implementing 10 practical measures:

1. Identify all vendors that access, store, transmit, or influence PHI or critical operations.
2. Classify vendors according to data sensitivity, operational dependency, and patient safety impact.
3. Conduct documented due diligence before contracting, including privacy, security, and compliance assessments.
4. Execute business associate agreements and contracts with clear security, breach response, and audit requirements.
5. Limit vendor access to the minimum necessary information and validate role-based permissions.
6. Establish formal onboarding, monitoring, and offboarding procedures for vendor relationships.
7. Require timely incident reporting and regularly test response plans involving vendors and internal teams.
8. Review subcontractor relationships and fourth-party dependencies when appropriate.
9. Maintain documentation supporting audits, investigations, and governance oversight activities.
10. Promote a culture of transparency, shared accountability, and continuous improvement.

As healthcare organizations adopt increasingly complex digital partnerships, HI professionals continue evolving from traditional compliance stewards into strategic governance leaders. Their expertise supports privacy protection, operational resilience, documentation integrity, and responsible data use across interconnected healthcare environments.

Trustworthy third-party relationships remain essential to maintaining regulatory compliance, operational continuity, and patient confidence. Through effective governance, continuous oversight, interdisciplinary collaboration, and responsible information management practices, HI professionals help healthcare organizations support innovation while protecting the information and individuals they serve.

Robyn Stambaugh, MS, RHIA, CHPS, is education program director of privacy and security/compliance at AHIMA.