Missoula, Mont. — A federal jury in Missoula, Montana, reached a verdict on Wednesday, finding that a health clinic in the town of Libby submitted 337 false asbestos claims, resulting in patients receiving Medicare and other benefits they were not entitled to. The fraudulent claims caused over $1 million in damage to the government. The case was brought against the Center for Asbestos Related Disease (CARD) by BNSF Railway in 2019 under the federal False Claims Act.
BNSF Railway, owned by billionaire Warren Buffett, is itself facing lawsuits over its involvement in the contamination of Libby. In 2020, Montana’s Supreme Court held BNSF liable for shipping asbestos-tainted vermiculite mined nearby through the town.
The CARD clinic, along with its high-profile doctor, Brad Black, has been instrumental in assisting the town’s residents since Libby was declared a Superfund site two decades ago due to its deadly contamination.
The jury’s verdict means that the clinic could face additional penalties. Under the False Claims Act, BNSF Railway could be entitled to receive 15% to 25% of any amount recovered by the government. CARD and its lawyers have denied making false medical claims, asserting that their diagnoses complied with the requirements of the 2010 Affordable Care Act, which included provisions for the Libby victims.
Dr. Black and the CARD clinic have diagnosed more than 3,400 individuals with asbestos-related diseases. These diseases range from lung complications to fatal cancer. Victims of asbestos exposure in the Libby area are entitled to taxpayer-funded services under the 2009 federal health law, including Medicare, housekeeping, transportation to medical appointments, and disability benefits for those unable to work.
The contentious issue in the trial surrounded the clinic’s practice of declaring patients eligible for benefits without confirmation from a secondary source. BNSF Railway argued that CARD submitted over 300 false claims and that 1,369 individuals received federal benefits without a disease diagnosis.
BNSF attorney Adam Duerk criticized Dr. Black, questioning his ability to detect early signs of asbestosis disease. Former Democratic U.S. Sen. Max Baucus, who played a role in drafting the Libby provision in the health law, defended the clinic’s practice, stating that confirming conditions through secondary sources such as X-rays was legitimate. However, U.S. District Judge Dana Christensen excluded Baucus’s statements, leaving it to the court to decide whether the law was followed.
Over 400 deaths in the Libby area have been attributed to asbestos-related diseases, with symptoms often taking decades to appear. The vermiculite contaminated with asbestos was sourced from a nearby mine owned by W.R. Grace, and it affected the town, including a BNSF railway yard. Cleanup efforts began in 2000 after widespread health issues were reported, with the Environmental Protection Agency declaring a public health emergency in Libby. Substantial funds were expended to remove vermiculite from numerous properties in Libby and adjacent communities.
Even minimal exposure to asbestos can cause severe lung problems. Lawsuits related to the contamination have resulted in significant settlements and awards for victims. More than 2,000 Montana residents reached settlements totaling $68 million with the state due to a failure 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.
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