Questions: Congressional studies report that Medicare payments fall 11 percent below the cost of treating patients while private insurance patients pay 29 percent more than cost. This phenomenon may be attributable to cost shifting or price discrimination depending on: a. the size of the hospital. b. the patient's income. c. the provider's payer mix. d. whether the hospital is organized as for profit or not-for-profit. e. whether the patient has Medigap insurance.

The answer is c. the provider's payer mix.

The size of the hospital may influence overall costs and efficiencies, but it does not directly explain the discrepancy in payments between Medicare and private insurance.

While a patient's income might affect their ability to pay for services, it does not directly relate to the differences in payment rates between Medicare and private insurance.

The provider's payer mix refers to the proportion of patients covered by different types of insurance (e.g., Medicare, Medicaid, private insurance). This mix can significantly impact the hospital's financial strategy, including cost shifting and price discrimination. Hospitals may charge higher rates to private insurers to compensate for lower payments from Medicare, which aligns with the observed payment discrepancies.

The organizational structure of the hospital (for-profit vs. not-for-profit) can influence financial strategies and priorities, but it does not directly explain the specific payment differences between Medicare and private insurance.

Medigap insurance helps cover out-of-pocket costs for Medicare beneficiaries, but it does not directly affect the payment rates set by Medicare or private insurers.