Medical billing is very very strange indeed. when you take your car to be worked on for instance, they present you with a bill at the end, right? The bill might say $700. You pay the man $700, right? Or, if you know the shop owner fairly well, you might offer $500 to which he might or might not agree.

Move onto the medical business. As in the foregoing post by sunedog, the chemo treatment center billed just under $40K which was negotiated down to approx $30K. It seems both the medical providers and the insurance companies are in on this negotiated pricing model which means the service price ($40K) was artificially inflated to begin with.

And, I know for a fact that prices for the exact same medical procedure/service vary by state and location. In some cases the variance in pricing is quite large.