Health clinic in Montana Superfund town faces penalties for false asbestos claims

A health clinic in a Montana town plagued by deadly asbestos contamination faces millions of dollars in penalties after a jury found it submitted 337 false asbestos claims to the U.S. government

A health clinic in a Montana town plagued by deadly asbestos contamination faces millions of dollars in penalties after a jury found it submitted more than 300 false asbestos claims to the U.S. government, making some of its patients eligible for Medicare and other benefits they shouldn't have received.

The small, federally funded clinic has been at the forefront of the medical response to deadly pollution from mining near Libby, Mont.

The town of about 3,000 people along the scenic Kootenai River gained national notoriety when it was declared a deadly Superfund site two decades ago, following media reports that workers and their families were being sickened by dust from a W.R. Grace mine.

A seven-person jury said Wednesday night that the false claims caused more than $1 million in damages to the federal government. Under the federal False Claims Act, the clinic is liable for three times the damages — or about $3.2 million — and millions of dollars more in potential penalties.

The verdict also could undermine numerous lawsuits from asbestos victims against BNSF Railway and other entities that courts have held liable for turning Libby into one of the nation’s deadliest polluted sites. Health officials have said at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area.

The case stemmed from a civil lawsuit filed by BNSF against the town's Center for Asbestos Related Disease health clinic, or CARD, in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf. BNSF’s lawsuit alleged CARD submitted claims on behalf of more than 300 patients without sufficient confirmation that they had asbestos-related disease. The jury agreed.

However, the railway also said 1,369 people received federal benefits with no proper disease diagnosis — an argument the jury rejected.

Federal prosecutors declined to intervene in the case, and there have been no criminal charges related to the false claims that were submitted.

It was not immediately known Friday if the patients involved in the false claims would lose benefits they’ve been receiving, or if that would require further action.

The CARD clinic and its high-profile doctor, Brad Black, have certified more than 3,400 people with asbestos-related diseases, according to court documents. It's received more than $20 million in federal funding.

Attorneys for CARD had argued during a 12-day civil trial that its diagnoses were in line with requirements of the 2010 Affordable Care Act, which included special provisions for the Libby victims.

“CARD was doing exactly what the law said,” clinic attorney Tim Bechtold said during closing arguments in the trial.

The railroad company owned by billionaire Warren Buffett is a defendant in numerous lawsuits over its own role in the town’s contamination. In 2020, Montana’s Supreme Court found BNSF liable for shipping asbestos-tainted vermiculite from a nearby mine through Libby.

The railway could be eligible for 15% to 25% of any amount recovered by the government from the false claims case.

Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing, to deadly cancer.

Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Because of the long latency period for those diseases, symptoms can take decades to develop.

The 2010 federal health law made victims of asbestos exposure in the Libby area eligible for Medicare, housekeeping, travel to medical appointments and disability benefits for those who can’t work.

Dr. Black, a pediatrician, has said the ailments caused by the type of asbestos in Libby are difficult to detect and can be missed by outside radiologists less familiar with it than he is.

BNSF attorney Adam Duerk criticized Black’s stated ability to perceive early signs of asbestosis disease that others missed.

“That’s not the practice of medicine, that’s the practice of roulette,” Duerk said. “When you see it, when you’re certain it’s there, that’s when you diagnose, not before.”

The CARD clinic's defense in the false claims case was hampered by a ruling that barred testimony on its behalf from former U.S. Sen. Max Baucus of Montana, who helped craft the Libby provision in the health law.

Baucus said in depositions with attorneys that the clinic’s practice of declaring some patients eligible for benefits without confirmation of their condition from a secondary source such as an X-ray was legitimate.

U.S. District Judge Dana Christensen blocked the testimony and said it was the court’s role to decide whether the law was followed.

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Brown reported from Denver.