A Montana Superfund Site Health Clinic Faces Millions in Penalties

A health clinic located in a Montana town affected by deadly asbestos contamination is facing severe consequences after a jury determined that the clinic had submitted over 300 false asbestos claims. These claims allowed patients to wrongfully receive Medicare benefits, resulting in over $1 million in damages for the government.

The Center for Asbestos Related Disease clinic, which is federally funded, has been a leading medical resource in addressing the health issues arising from the mining-related pollution in Libby, Montana. The town gained national attention when it was designated as a Superfund site due to reports of workers and their families falling ill and dying from the asbestos-laden dust originating from a W.R. Grace mine.

Jury Rules Clinic Submitted 300 False Asbestos Claims

A seven-person jury concluded on Wednesday that the clinic’s submission of false claims had caused more than $1 million in damages to the federal government. Under federal law, the clinic is liable for triple the amount of damages, which equates to approximately $3.2 million, and may potentially face additional penalties amounting to millions of dollars.

This verdict has the potential to undermine lawsuits against entities such as BNSF Railway, which have been held accountable for the contamination that has transformed Libby into one of the most polluted sites in the country. Health officials estimate that at least 400 individuals have succumbed to asbestos exposure in the Libby area, with thousands more falling ill.

BNSF had filed a civil lawsuit in 2019 against the Libby clinic under the False Claims Act, which enables private parties to sue on behalf of the government. The lawsuit asserted that the clinic had submitted claims for over 300 patients without adequate confirmation of their asbestos-related ailments, a claim that the jury concurred with. The railway also alleged that 1,369 individuals had received federal benefits without a proper disease diagnosis, but the jury did not support this argument.

Judy Woller, a former Libby resident, whose husband had worked at the mine and passed away from lung cancer after receiving treatment at the clinic, stated that her lungs have also been scarred by asbestos exposure. She has a pending lawsuit against BNSF on behalf of her late husband and expressed her disappointment with the railway’s actions.

A spokesperson for BNSF attributed asbestos-related diseases among Libby residents to W.R. Grace’s mine and claimed that the trial’s focus was on CARD’s treatment of patients who were not ill. The spokesperson also emphasized the loss of taxpayer money and diverted resources from those who genuinely required assistance.

Future Implications for the Clinic

U.S. District Judge Dana Christensen’s ruling that excluded former U.S. Sen. Max Baucus’ testimony impeded the clinic’s defense. Baucus had played a role in the provision within the 2010 Affordable Care Act that made Libby asbestos victims eligible for government benefits. Baucus expressed his astonishment at the trial’s outcome, questioning whether the jurors had fully grasped the health law’s stipulation that coverage could be granted based on X-ray readings alone, even if a positive disease diagnosis was not made by the clinic.

Federal prosecutors chose not to intervene in this case, resulting in no criminal charges related to false claims being filed against the center. The clinic, spearheaded by its well-known doctor, Brad Black, has certified over 3,400 individuals with asbestos-related diseases, receiving more than $20 million in federal funding.

Tracy McNew, the Executive Director of the center, confirmed that they plan to appeal the verdict and had made efforts to comply with the law. However, McNew warned that if the ruling stands, the clinic would face bankruptcy. The jury did not specify which patients were involved in the false claims, and McNew is seeking clarification from the Social Security Administration regarding any potential loss of government services for those patients. The administration was not a party to the case.

BNSF, owned by billionaire Warren Buffett, is also facing multiple lawsuits in connection with its role in Libby’s contamination. In 2020, the Montana Supreme Court held BNSF liable for its handling of asbestos-contaminated vermiculite in Libby, which the railroad transported to various locations across the United States for use as home insulation.

The railway could potentially receive between 15% to 25% of any recovery amount secured by the government in the false claims case. Asbestos-related diseases can range from lung cavity thickening hindering breathing to fatal cancer. Even minute asbestos exposure can lead to lung problems, and symptoms may take decades to manifest.

Dr. Black, a pediatrician, has indicated that asbestosis diseases caused by the specific asbestos found in Libby are challenging to detect and may be overlooked by external radiologists who are less familiar with this type of asbestos. During the closing arguments of the false claims trial, BNSF attorney Adam Duerk criticized Black’s claim of being able to identify early signs of asbestosis disease that others had missed, referring to it as a gamble rather than the practice of medicine.

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