The correct answer is a signed Business Associate Agreement (BAA) with the cloud provider because, under HIPAA, any cloud storage service that handles protected health information (PHI) must be contractually bound to safeguard that data. Without a BAA, the provider is not legally obligated to comply with HIPAA’s privacy and security rules, making the organization non-compliant regardless of any technical controls like encryption or multi-factor authentication. On the CISSP exam, this question tests your understanding that legal and regulatory requirements often override purely technical safeguards in compliance domains. A common trap is choosing encryption or access controls, but the exam emphasizes that a BAA is the foundational, non-negotiable requirement for any business associate handling PHI. Remember the mnemonic: “No BAA, no PHI — the contract comes first.”
CISSP Asset Security Practice Question
This CISSP practice question tests your understanding of asset security. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A healthcare organization is moving patient records to a cloud storage service. Which of the following is the MOST important requirement to ensure data security and compliance with HIPAA?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
A signed Business Associate Agreement (BAA) with the cloud provider
Under HIPAA, a covered entity must have a signed Business Associate Agreement (BAA) with any cloud service provider that creates, receives, maintains, or transmits protected health information (PHI). Without a BAA, the provider is not contractually bound to safeguard PHI, making the organization non-compliant regardless of technical controls. While encryption and MFA are important security measures, they cannot substitute for the legal and regulatory requirement of a BAA.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Multi-factor authentication for all cloud access
Why it's wrong here
MFA is a security best practice but not specifically required by HIPAA for cloud storage.
✗
Encryption of data in transit using TLS 1.2
Why it's wrong here
Encryption in transit is important but not the most important requirement; HIPAA requires a BAA.
✓
A signed Business Associate Agreement (BAA) with the cloud provider
Why this is correct
A BAA is required under HIPAA to ensure the cloud provider handles PHI appropriately.
Related concept
Read the scenario before looking for a memorised answer.
✗
Encryption of data at rest using AES-256
Why it's wrong here
Encryption at rest is important but not the most important; a BAA is required.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often focus on technical security controls like encryption or MFA, overlooking the foundational legal and regulatory requirement of a signed Business Associate Agreement, which is the non-negotiable first step for HIPAA compliance with a cloud provider.
Detailed technical explanation
How to think about this question
A BAA is a legally binding contract that defines the permitted uses and disclosures of PHI by the business associate, requires the associate to implement appropriate safeguards, and establishes liability in the event of a breach. Under the HIPAA Omnibus Rule (2013), cloud service providers that store or process PHI are considered business associates and must sign a BAA. Even if the cloud provider offers robust encryption and access controls, without a BAA the organization bears full regulatory risk for any PHI exposure.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A developer is choosing between AES-256 (symmetric) and RSA-2048 (asymmetric) for encrypting a large file that will be sent to a partner. Symmetric encryption is fast but requires key exchange; asymmetric is slower but solves the key distribution problem. A hybrid approach — encrypt the file with AES, encrypt the AES key with RSA — is standard. Questions like this test whether you understand when each approach applies.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this CISSP question in full detail.
Asset Security — This question tests Asset Security — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: A signed Business Associate Agreement (BAA) with the cloud provider — Under HIPAA, a covered entity must have a signed Business Associate Agreement (BAA) with any cloud service provider that creates, receives, maintains, or transmits protected health information (PHI). Without a BAA, the provider is not contractually bound to safeguard PHI, making the organization non-compliant regardless of technical controls. While encryption and MFA are important security measures, they cannot substitute for the legal and regulatory requirement of a BAA.
What should I do if I get this CISSP question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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