Clinic in Superfund town submitted 337 false asbestos claims costing government more than $1 million, jury says

Missoula, Mont. — A federal jury ruled Wednesday that a health clinic in a Montana town where hundreds of people have died from asbestos exposure submitted 337 false asbestos claims that made patients eligible for Medicare and other benefits they shouldn’t have received.

The seven-person jury said that the fraudulent claims caused more than $1 million in damage to the government.

The case focused on the Center for Asbestos Related Disease in Libby, Montana. BNSF Railway filed a lawsuit against the clinic under the federal False Claims Act in 2019.

The railroad company owned by billionaire Warren Buffett is also 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 clinic and its high-profile doctor, Brad Black, have been at the forefront of efforts to help residents of the town, which came to national prominence when it was declared a deadly Superfund site two decades ago.

The jury’s finding leaves the clinic subject to additional penalties. Under the False Claims Act, the railway could be eligible for 15% to 25% of any amount recovered by the government.

CARD and its attorneys had denied it made false medical claims on behalf of patients, arguing 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 earlier Wednesday during closing arguments that followed 11 days of testimony.

BNSF’s lawsuit alleged CARD submitted more than 300 false claims on behalf of patients without getting outside confirmation that they had asbestos-related disease. The company also said 1,369 people received federal benefits with no disease diagnosis.

Dr. Black and the CARD clinic have certified more than 3,400 people with asbestos-related diseases, according to court documents.

Asbestos-related diseases can range from a thickening of a person’s lung cavity, hampering breathing, to deadly cancer. Under the 2009 federal health law, victims of asbestos exposure in the Libby area are eligible for taxpayer-funded services including Medicare, housekeeping, travel to medical appointments and disability benefits for those who can’t work.

Dr. Black is a pediatrician by specialty and has served as the Lincoln County Health Officer. He has previously said the ailments caused by the type of asbestos found in Libby are difficult to detect and can be missed by outside radiologists.

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.”

Former Democratic U.S. Sen. Max Baucus, of Montana, helped craft the Libby provision in the health law. He 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.

However, U.S. District Judge Dana Christensen barred Baucus’s statements from the trial, saying it was the court’s role to decide whether the law was followed.

At least 400 people have been killed by asbestos-related disease in the Libby area, according to health officials. Because of the long latency period for those diseases, symptoms can take decades to develop.

The tainted vermiculite came from a mine owned by the Maryland-based chemical company W.R. Grace. It polluted the Libby area over decades, including at a BNSF railway yard in the heart of the town of about 3,000 people.

Cleanup work began in 2000 after media reports of widespread health problems spurred a federal investigation. The EPA years later declared the agency’s first public health emergency in the town. More than $600 million was spent to remove vermiculite from thousands of properties in Libby and surrounding communities.

Scientists say exposure to even a minuscule amount of asbestos can cause lung problems.

The case was sealed under court order for two years until the U.S. attorney’s office of Montana declined to intervene. Officials have not given a reason.

Asbestos-tainted vermiculite was used as construction material in Libby and it remains inside many houses, where it was used as insulation. It was also shipped across the country by BNSF and installed in millions of homes.

Lawsuits against companies and officials over the contamination in Libby have resulted in large settlements and awards for victims.

More than 2,000 Montana residents reached settlements with the state totaling $68 million for failing to warn them about the dangers of asbestos exposure. In February 2022, a jury awarded an Oregon man $36.5 million in a lawsuit against W.R. Grace’s insurer.