under the ERISA Act passed in Congress in 1974 and its preemptive effect on state common law tort lawsuits that "relate to" Employee Benefit Plans, HMOs administering benefits through private employer health plans have been protected by federal law from malpractice litigation, on the grounds that the decisions regarding patient care are administrative rather than medical in nature. See Cigna v. Calad, 2004. Independent practice association (IPA) An Independent Practice Association is a legal entity that contracts with a group of physicians to provide service to the HMO's members. Most often, the physicians are paid on a basis of capitation, which in this context means a set amount for each enrolled person assigned to that physician or group of physicians, whether or not that person seeks care. The contract is not usually exclusive so individual doctors or the group may sign contracts with multiple HMOs. Physicians who participate in IPAs usually also serve fee-for-service patients not associated with managed care. IPAs usually have a governing board to determine the best forms of practices. Preferred provider organization (PPO) Rather than contract with the various insurers and third party administrators, providers may contract with preferred provider organizations. A membership allows a substantial discount below their regularly charged rates from the designated professionals partnered with the organization. Preferred provider organizations themselves earn money by charging an access fee to the insurance company for the use of their network (unlike the usual insurance with premiums and corresponding payments paid fully or partially by the insurance provider to the medical doctor). In terms of using such a plan, unlike an HMO plan, which has a copayment cost share feature (a nominal payment generally paid at the time of service), a PPO generally does not have a copayment but offers a deductible and a coinsurance feature. The deductible must be paid in full before any benefits are provided. After the deductible is met, the coinsurance benefits apply. If the PPO plan is an 80% coinsurance plan with a $1,000 deductible, the patient pays 100% of the allowed provider fee up to $1,000. The insurer will pay 80% of the other fees, and the patient will pay the remaining 20%. Charges above the allowed amount are not payable by the patient or insurer but written off as a discount by the physician. Because the patient is picking up a substantial portion of the "first dollars" of coverage,