Yes, it's quite a shock when you learn how it all works.
In 2009, I started working for a software company that has to deal with being able to bill to health insurance companies. There are no fewer than 75 different program options that have to be flipped on or off depending on the whims of what some insurance company wants to happen. For instance, many state Medicaid programs require that the dates of service on the claim not span a month. So if your claim says something like 50mg IV Morphine 6/15 - 7/14, it will be rejected as being in the incorrect format and they will refuse to pay the provider until the claim has two line items for Morphine, one for 6/15 - 6/30 and another for 7/1 - 7/14. And of course some of them will let you put ancillary supplies over a month, but not the main drug. Oh, but if the main drug is a compound, they want to see all the ingredients that made the compound, which can span a month...unless it's a TPN therapy, in which case just bill a per diem.
Most insurance is billed electronically these days, but yes, most hospitals, HME companies, and other large providers have armies of billers in the A/R department whose sole job it is make a decent guess at how a particular insurance company wants to be paid, transmit the claim, receive a cryptic rejection notice, and then figure out which T's they need to cross and which I's they need to dot in order to get paid. It is not the norm, but it is also not unheard of that for certain therapies, the provider won't even bother billing the service because the cost of having someone work the claim isn't worth the amount of money they'll get paid. The insurance companies try to make the billing rules as obtuse and arcane as possible to bill them so that the providers will do just that -- throw their hands up in disgust and not even bother asking them to pay for it.