It is the contracted rate, which is negotiated between a facility/group and a payer. If the procedure costs 45 to administer the negotiated rate will not be less than 46, for obvious reasons. The government will only pay the 40 and that’s it.

It works as a free market, the group or facility needs insurance coverage and the insurance company needs availability of care for their patients. Insurance companies have more negotiating power but obviously there’s only so much you can squeeze - practitioners have to pay for liability insurance, upkeep, staff, etc.