Read this piece. Ignoring the usual left v. center frame and focusing on outcomes, the process was:
Pelosi and the Blue Dogs struck a deal to allow a public option to get out of Committee. Rather than tie compensation rates for the public option to Medicare (which reimburses everyone but drug companies at a lower rate -- particularly in rural areas), the public option would negotiate independently for compensation rates. Presumably, these would be higher than Medicare rates.
Mike Ross (D-AR) and chief Blue Dog, came back from break saying he would not support any public option.
Pelosi is now prepared to file an amendment to restore the original link to Medicare reimbursement.
While The Hill labors mightily to make this look like the left breaking faith with centrists, the actual dynamic is that the Blue Dogs assumed that they would be wooed and that the compromise was the floor. This was the old dynamic. Instead, Pelosi said "screw you guys. I can get this through the House with the Progressive Caucus and I defy you to go on record as being the Ds who killed Healthcare reform."
We'll see if it holds. I expect the White House to lobby for the Blue Dogs, because they have proven themselves to be self-destructive idiots.