Considering All the Confusion About Hospital Charges, Costs and Prices

Considering all the confusion about hospital charges, costs and prices, what is the most common way for private insurers to develop a set of reimbursement rates they will use with every particular hospital?

A) Every insurer conducts their own feasibility study for each hospital and creates their own chargemaster for that hospital from scratch.
B) Most private insurers rely on published Medicare reimbursement rates as a basis, and set their reimbursement rates to hospitals as a certain percentage of Medicare rates (e.g. 110%) .
C) Most private insurers rely on published Medicaid reimbursement rates as a basis, and set their reimbursement rates to hospitals as a certain percentage of Medicaid rates (e.g. 90%) .
D) Most insurers rely on each hospital's chargemaster as a basis, and typically negotiate a certain percentage discount (e.g. 30% off all the listed charges) .
E) There is no "most common", or dominant, way how private insurers set their payments to hospitals. A variety of methods exists, and all of them are about equally popular.