Use of off-shore entities raise the issue of whether the US company will
enter into a "safe-harbor" agreement with the US government in order to
transfer the PHI to those countries with a privacy law.  If the US company
uses a company in a country without a privacy law, it must determine what
its responsibilities/obligations are under HIPAA as well as the state
privacy requirements.  The state may prohibit the transfer of PHI to a
country without adequate protection.  All in all, the uncertainty of such
an arrangement would tend to emphasize the need for a more conservative
approach of compliance rather than avoidance.

Moya T. D. Gray, Director
Office of Information Practices
State of Hawaii
No. 1 Capitol Center
250 South Hotel Street, Suite 107
Honolulu, Hawaii  96813

Tel:  808-586-1400
Fax:  808-586-1412
Web: www.state.hi.us/oip


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