Part two of two. If you send a specimen to an outside lab and they bill you eighteen dollars for it, eighteen dollars is the most you can bill Medicare. Not your contracted rate. That is the anti-markup rule, and it is one of two things that quietly rewrite the math on in-office lab. What to pull first. Start from your last 90 days of reference lab orders, grouped by test name and CPT code. That is demand, not a projection. Then map each test to its PAMA rate from the CMS Clinical Laboratory Fee Schedule, and check whether your commercial payers hold a separate lab fee schedule from your office visit schedule. Many do. How Medicare lab billing works. Medicare pays the lesser of your billed charge or the PAMA rate, and there is no negotiating it. Billing $45 against an approximately $18 rate pays approximately $18. The anti-markup rule then says that if you did not perform the test yourself under your own CLIA certificate, you cannot bill Medicare above what the reference lab charged you. And ordering provider enrollment matters, because lab bills under the ordering NPI directly and incident-to does not apply. The four costs that get underestimated. Reagent per reportable result, QC materials run daily whether or not you test a patient, proficiency testing for moderately complex, and staff time. That last one decides it: five to fifteen minutes per rapid test, which at twenty tests a day is $42 to $175 in daily labor. The honest ceiling. On rapid strep at a blended $19 with about $10.80 of variable cost, contribution margin is $8.20 a test and break-even is about 43 tests a month. A practice converting 126 of 180 referred strep tests clears roughly $681 a month from strep alone. A full waived menu at good volume might reach $3,000 to $6,000 a month. Real money, and a real compliance program. Three actions this week • Have your billing team pull 90 days of send-out orders grouped by test name and CPT code. That single report is your demand baseline. • Look up the current PAMA rate for every test on your candidate menu at the CMS Clinical Laboratory Fee Schedule for your year and locality. • Check how your send-out tests are currently being billed to Medicare against the anti-markup rule, before you model anything new. Episode breakdown • Segment 1: what to pull before any revenue projection • Segment 2: how Medicare lab billing actually works, three rules • Segment 3: the business case model and a worked break-even Resources • Practice Financial Health Dashboard for Physicians eligibility.natrevmd.com/free-practice-financial-health-dashboard-for-physicians-natrevmd (redacted • RECOVER Diagnostic eligibility.natrevmd.com/recover-quiz-lp (redacted • CMS Clinical Laboratory Fee Schedule cms.gov/medicare/payment/fee-schedules/clinical-laboratory (redacted • Trusted resources library natrevmd.com/trusted-resources/ (redacted • Part 1: EP207, should you bring lab testing in-house?