That's not quite it. Hospitals would make every code cost $1M or some other ridiculous number if that were the only thing going on. The provider has a list of

That's not quite it. Hospitals would make every code cost $1M or some other ridiculous number if that were the only thing going on. The provider has a list of prices called the chargemaster. The insurance (and Medicare) have lists of prices they'll pay. For private insurance, there will often be negotiations to set prices for patients with the insurer getting treatment at the provider, called the network agreement. These fall between the two lists, generally. If you're out of network, the provider bills their chargemaster, the insurer tries to pay their price depending on the terms of the insurance. In network, the provider bills the negotiated rate and the insurer (probably) pays it. Now what happens if the patient doesn't have insurance? The provider bills their chargemaster and the patient (rarely) pays it. If they do, confetti. If they don't, the provider graciously takes a percentage off and offers a repayment plan. They collect on a meaningful percentage of these. The patient pays more if the chargemaster is higher.