hardMultiple Choice
CAS-004 Practice Question: A healthtech startup is developing a mobile app…
A healthtech startup is developing a mobile app that collects PHI. They plan to use a third-party cloud provider for data storage. What is the most critical compliance requirement before signing the contract?
⚠ Common exam trap
CompTIA often tests the distinction between contractual compliance (BAA) and technical controls (encryption, SOC reports), leading candidates to prioritize security measures over the mandatory legal agreement required by HIPAA.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Execute a Business Associate Agreement (BAA) with the provider
Under HIPAA, a Business Associate Agreement (BAA) is a mandatory contract that ensures the third-party cloud provider (a business associate) will safeguard Protected Health Information (PHI). Without a BAA, the startup would be in direct violation of HIPAA's Privacy and Security Rules, regardless of other security measures. This requirement is non-negotiable before any PHI is shared or stored by the provider.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Verify the provider's data center locations comply with data residency laws
Why it's wrong here
Data residency affects where PHI is stored but does not create the legal obligation governing the provider's handling of PHI; without a Business Associate Agreement the disclosure itself is non-compliant. It is tempting for jurisdictional compliance, which suits EU or sector-specific localisation rules, but HIPAA mandates the BAA first.
- ✓
Execute a Business Associate Agreement (BAA) with the provider
Why this is correct
HIPAA requires a Business Associate Agreement before a third party creates, receives or stores PHI, contractually binding the cloud provider to safeguards, breach notification and use restrictions. This satisfies the stem's requirement for the most critical compliance step preceding contract signature.
- ✗
Review the provider's SOC 2 Type II report
Why it's wrong here
SOC 2 Type II attests security controls over time but does not satisfy HIPAA's requirement for a signed Business Associate Agreement before PHI is disclosed to the provider. It is tempting as vendor due diligence evidence, which suits general security assurance, yet the stem demands the BAA as the critical pre-contract requirement.
- ✗
Ensure all data is encrypted at rest and in transit
Why it's wrong here
Encryption at rest and in transit is a safeguard, not the contractual prerequisite; HIPAA requires a Business Associate Agreement before PHI is shared with the provider, and encryption alone leaves that obligation unmet. It is tempting as a core technical control, which suits breach-risk reduction, but the stem asks for the critical pre-contract compliance requirement.
Go deeper
Related to this question
About these practice questions
One of 973 original CAS-005 practice questions on Courseiva, each with a full explanation and wrong-answer analysis — not exam dumps or protected exam content. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CAS-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAS-005 exam.