A health clinic in Libby, Montana, a town grappling with asbestos contamination, is facing significant financial penalties after a jury found it responsible for submitting hundreds of false asbestos-related disease claims. This resulted in undeserved Medicare benefits and other government assistance for patients, causing over $1 million in damages.

The Center for Asbestos Related Disease (CARD) clinic, located in the heart of the Libby Superfund site, played a critical role in addressing the health crisis stemming from asbestos-contaminated vermiculite mining. The town gained national attention two decades ago when the extent of the asbestos-related illnesses and deaths linked to the W.R. Grace mine became public.

A jury determined that CARD submitted over 300 false claims, leading to unnecessary Medicare coverage. Under the False Claims Act, the clinic could be liable for triple the damages, amounting to approximately $3.2 million, plus additional penalties. This verdict could also impact ongoing lawsuits from asbestos victims against companies like BNSF Railway, held responsible for the contamination.

The case originated from a 2019 lawsuit filed by BNSF, alleging that CARD submitted claims for numerous patients without adequate confirmation of asbestos-related diseases. While the jury agreed with BNSF on the false claims, they rejected the railway's broader assertion that over 1,300 individuals received benefits without proper diagnoses. BNSF, in a statement, emphasized the misdirection of taxpayer funds and resources away from those genuinely in need, placing the blame for the asbestos-related illnesses on W.R. Grace's mining operations.

Former Libby resident Judy Woller, whose husband died of lung cancer after working at the mine and being treated at CARD, expressed outrage at BNSF's lawsuit, viewing it as a financially motivated attack on the clinic. She defended the clinic's work and criticized the railway for attempting to avoid responsibility for the contamination.

A general view of Libby Montana on Feb. 17, 2010. (AP Photo/Rick Bowmer, File)

The clinic's defense was hampered by a court ruling that excluded testimony from former U.S. Senator Max Baucus, who played a role in crafting legislation providing benefits for Libby asbestos victims. Baucus expressed surprise at the verdict and questioned the jury's understanding of the law, which allows for diagnoses based on X-ray readings even without a definitive disease diagnosis.

CARD, which has certified thousands of individuals with asbestos-related diseases and received substantial federal funding, plans to appeal the verdict, stating that it would lead to bankruptcy. The clinic's executive director is seeking clarification from the Social Security Administration regarding the potential impact on patients' government services. The Social Security Administration, not a party in the case, expressed uncertainty about the jury's determination of the false claims.

BNSF, owned by Warren Buffett, faces multiple lawsuits related to its role in transporting the asbestos-tainted vermiculite. The railway could receive a percentage of any funds recovered by the government in the false claims case. The case highlights the complex and long-lasting health and legal challenges stemming from the Libby asbestos contamination, as well as the difficulties in diagnosing and treating asbestos-related diseases, which can take decades to manifest.