I am not an American but I think you have it back to front. It seems because they know the biggest customer (medicare) will have to pay what smaller customers

I am not an American but I think you have it back to front. It seems because they know the biggest customer (medicare) will have to pay what smaller customers pay, they simply charge huge amounts to the smaller customers. From an economics perspective the demand curve is inelastic. Medicare will pay whatever the price is as long as there is one other buyer paying that price.