Montana judge orders asbestos clinic to pay $6M over crooked claims, 337 patients falsely eligible for funding

A judge ruled Saturday that a health clinic in Montana must pay the government almost $6 million in penalties and damages after it submitted hundreds of false asbestos claims.

The Center for Asbestos Related Disease (CARD) clinic in Libby, Montana, submitted 337 false asbestos claims that made patients eligible for Medicare and other benefits they should not have received.

The clinic received more than $20 million in federal funding, according to court documents.

The small mining town was considered a Superfund site, a U.S. Environmental Protection Agency (EPA) program that is responsible for cleaning up contaminated land and responding to environmental emergencies, oil spills and natural disasters. 

The Superfund site status allowed the clinic’s high-profile doctor, Brad Black, and his office to sign off on benefits for patients as well as prescribing opioids for people who may not have had a legitimate asbestos-related diagnosis.

The clinic demonstrated “a reckless disregard for proper medical procedure and the legal requirements of government programs,” U.S. District Judge Dana Christensen wrote.

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After a seven-person jury agreed last month, District Judge Christensen said in a July 18 order, that he was imposing a stiff penalty to prevent future misconduct.

As instructed by the law, the judge tripled the $1.1 million in damages found by the jury, to almost $3.3 million, and imposed $2.6 million in additional penalties.

The judge awarded BNSF Railway 25% of the proceeds, as allowed under the False Claims Act. Federal prosecutors previously declined to intervene in the case, and there have been no criminal charges brought against the clinic.

The judgment against the CARD clinic comes after BNSF Railway filed a lawsuit in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf.

The railroad company, owned by Warren Buffett, alleged that the center submitted claims on behalf of patients without sufficient confirmation they had asbestos-related disease.

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The clinic’s attorneys appealed the jury’s verdict to the 9th U.S. Circuit Court of Appeals on Thursday. Clinic director Tracy McNew has said the facility could be forced into bankruptcy if forced to pay a multimillion-dollar judgement.

The verdict also could harm the clinic’s reputation and potentially undermine lawsuits by asbestos victims against BNSF and others that courts have held liable for contamination that’s turned Libby into one of the nation’s deadliest polluted sites.

In 2020, the Montana Supreme Court found BNSF liable for shipping asbestos-contaminated vermiculite through Libby, Montana.

Railway spokesperson Lena Kent said the clinic’s actions wasted taxpayer money while diverting resources from people in legitimate need.

“The focus of this trial was on CARD’s treatment of the hundreds of people who were not sick,” Kent said. “It’s a sad chapter in this saga that this trial was necessary to restore the focus on those who are truly impacted and who should continue to have access to the benefits and care they deserve.”

Libby, Montana was once a prosperous vermiculite mining town until 1990 when the area was closed following reports that mine workers and their families were getting sick and dying due to hazardous asbestos dust. Officials say that at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area.

Vermiculitle was used to insulate homes and buildings, however, it also contained asbestos. Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing to deadly cancer.

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Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Symptoms can take decades to develop.

The Libby area was declared a Superfund site two decades ago and the EPA now considers the area safe. 

The Associated Press contributed to this report.