The way it works is they bill outrageous amounts in the expectation that they will either be totally stiffed or have to negotiate a much lower settlement (which is essentially what insurance companies do, AFAIK). In the rare case where somebody actually pays the full bill, they're subsidizing care for those who walk out on the bill (or part of it). This strikes me as an extremely broken way of doing things, but it seems to be the norm, so maybe it's a really, really bad Nash equilibrium.