@2: It's, sadly, more complicated than that. (While reading this, I suggest humming the Canadian National Anthem to keep calm.)
For a given diagnosis (classified into a DRG
), Medicare has a base payment rate they will pay a hospital. This payment is modified based on physical location, patient factors (housing, other medical problems), if doctors-in-training are helping in the care, and other factors. The amount is supposed to, on average, have the hospital break even or make a slight profit.
After all this, the payment is what the payment is. The hospital can bill whatever it wants; the amount Medicare will pay is already set by CMS.
Physicians are paid by a completely separate system, based on CPT coding
Hence, a hospitalization in the US involves at least TWO bills and TWO separate billing systems: one for the hospital (capitated and based on DRGs), and one for the physicians (based on CPT codes and fee-for-service).