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The American Recovery and Reinvestment Act (the “Act”; also informally known as the “Stimulus Bill”) was signed into law by President Obama on February 17, 2009. The Act contains surprising modifications to HIPAA’s Privacy and Security Rules. These changes will likely require every business associate agreement to be modified. The Act also, for the first time, requires business associates to comply directly with many of HIPAA’s rules and subjects business associates to HIPAA’s civil and criminal penalties. The Act increases the penalties for various HIPAA violations and dramatically expands other remedial actions (such as increasing federal government audits; granting attorneys fees in some HIPAA lawsuits; and allowing a method for individuals to recover penalties under HIPAA). The changes are significant to all covered entities, but are most challenging for business associates, who now face a host of new requirements.