$1.3 million in fraud. Partner in Kentucky company pleads guilty in drug testing scheme.

A partner in a Central Kentucky medical-billing service has admitted taking part in a scheme to defraud health programs of more than $1.3 million.

Samuel L. Ford pleaded guilty Wednesday in federal court in Lexington to one charge of conspiracy, punishable by up to five years in prison.

Ford was half-owner of T. Monroe Medical Billing, a Nicholasville company, during a period in 2016, according to court documents.

The company handled billing for medical practices, including a toxicology lab in Nicholasville called Compliance Advantage LLC, which did business under the name C.A.L. Laboratory Services, or CAL. The lab’s work included analyzing urine samples submitted by doctors’ offices.

The other 50 percent of the billing company was owned by Mason Routt, who also had an ownership interest in the toxicology lab.

Ford acknowledged taking part in fraud to prop up revenue for the lab after insurance companies cut payments to the facility.

In about January 2016, Humana Caresource, a Medicaid provider, said it wasn’t going to pay many of CAL’s bills because they were for tests that allegedly were not medically necessary or were improperly billed, according to Ford’s plea agreement.

Humana continued that approach throughout 2016, which cut significantly into the lab’s revenue.

On top of that, another insurer covering Kentucky Medicaid patients, Aetna Coventry Cares, issued a demand to CAL in February 2016 to repay $750,000 to Aetna for alleged improper testing and overbilling, according to the court document.

Aetna started recouping the overpayment by deducting money from other payments to CAL, further cutting into revenue for the lab.

Around October 2016, Ford and Routt — who died the next year — met with the owner of a urine drug-testing lab in Owensboro and worked out a deal called a reference lab agreement, under which one lab can perform tests referred from another one.

Ford acknowledged that he then took part in falsely billing Humana and other Medicaid providers for tests as if they’d been done at the Owensboro lab when in fact CAL, the Nicholasville lab, had done them.

Ford said he was told CAL would get 60 percent of the payments under the arrangement and the Owensboro lab, which was not identified by name in the plea document, would get 40 percent.

Ford also admitted he agreed to have T. Monroe and CAL employees submit bills to Humana, Aetna, and Anthem Blue Cross & Blue Shield Medicaid for tests done before the agreement with the Owensboro lab, but to make it appear the tests were done at the Owensboro lab.

The intent was to get money for CAL that it wouldn’t have received from the three insurers without the lie, Ford said in his plea.

Ford said he was told the agreement between the two labs was backdated to try to cover up the scheme.

The plea agreement said the total loss to the three Medicaid providers was $1,378,449. That is the amount of restitution called for in Ford’s plea deal.

Ford is to be sentenced in June.