Montana clinic files for bankruptcy following $6 million judgment over false asbestos claims

Aug 9, 2023, 8:36 AM | Updated: 11:16 am

FILE - Unidentified road workers wear protective gear against possible asbestos contamination as th...

FILE - Unidentified road workers wear protective gear against possible asbestos contamination as they load material from a road resurfacing project in downtown Libby, Mont., April 28, 2011. A health clinic in the Montana town that's plagued by deadly asbestos contamination is liable for almost $6 million in penalties and damages after it submitted hundreds of false claims for government benefits. (AP Photo/Matthew Brown, File)

(AP Photo/Matthew Brown, File)

BILLINGS, Mont. (AP) — A health clinic in a Montana town plagued by deadly asbestos contamination has filed for bankruptcy protection after a judge ordered it to pay the government almost $6 million in penalties and damages for submitting hundreds of false claims for benefits.

The federal bankruptcy filing, submitted Tuesday, will allow the Center for Asbestos Related Disease clinic in the small town of Libby to continue operating while it appeals last month’s judgment, said clinic director Tracy McNew.

A seven-person jury in June found the clinic submitted 337 false claims that made patients eligible for Medicare and other benefits they shouldn’t have received. The federally-funded clinic has been at the forefront of the medical response to deadly pollution from mining near Libby that left the town and the surrounding area contaminated with toxic asbestos dust.

The $6 million judgment against it came in a federal case filed by BNSF Railway under the False Claims Act, which allows private parties to sue on the government’s behalf. The clinic has denied any intentional wrongdoing and its attorneys have appealed the jury’s verdict to the 9th U.S. Circuit Court of Appeals.

The clinic has certified more than 3,400 people with asbestos-related diseases and received more than $20 million in federal funding, according to court documents.

“We filed (for bankruptcy) because we want to continue to offer the same services and keep our doors open to pay our employees,” said McNew.

The jury did not identify the 337 patients who were the subject of the false claims and federal officials have not said if they will lose any benefits. Under a provision in 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.

BNSF is itself a defendant in hundreds of asbestos-related lawsuits. It alleged the center submitted claims on behalf of patients without sufficient confirmation they had asbestos-related disease.

U.S. District Judge Dana Christensen awarded BNSF 25% of the total proceeds in the false claims case, as allowed under federal law. BNSF representatives did not immediately respond to a request for comment on the clinic’s bankruptcy.

In his July 18 judgment, Christensen blasted the clinic’s “reckless disregard” for medical procedures and cited evidence from trial of high rates of opioid pain medication prescriptions for people who may not have had a legitimate asbestos-related diagnosis.

McNew disputed the criticisms and said the the case came down to opposing interpretations of what was allowed under the 2009 health law. A new medical director took over two years ago — replacing longtime clinic doctor Brad Black — and the clinic has since stopped prescribing opioids, instead referring pain management to outside providers, McNew said. At the time of Black’s retirement, only 39 of the clinic’s thousands of patients were on opioids, she added.

Federal prosecutors previously declined to intervene in the false claims case and there have been no criminal charges brought against the clinic.

The Libby area was declared a Superfund site two decades ago following media reports that mine workers and their families were getting sick and dying due to hazardous asbestos dust.

Health officials have said at least 400 people have been killed and thousands sickened from asbestos exposure in the Libby area. The contamination came from tainted vermiculite that was mined near town by Maryland-based chemical company W.R. Grace & Co.

The mine closed in 1990 but asbestos has continued to be found, including at a BNSF rail yard in the heart of the town of about 3,000 people.

Asbestos-related diseases can range from a thickening of a person’s lung cavity that can hamper breathing to deadly cancer. Exposure to even a minuscule amount of asbestos can cause lung problems, according to scientists. Symptoms can take decades to develop.

National News

Associated Press

Stock market today: World shares track Wall Street’s slump after Fed says rates may stay high in ’24

World shares have declined, echoing a slump on Wall Street after the Federal Reserve said it may not cut interest rates next year by as much as it earlier thought. Benchmarks fell by 1% or more in Paris, Tokyo, Sydney and Hong Kong. U.S. futures slipped and oil prices also were lower. On Wednesday, the […]

6 hours ago

FILE - Deja Taylor arrives at federal court, June 12, 2023, in Virginia Beach, Va. Taylor, the moth...

Associated Press

Mother of 6-year-old boy who shot his teacher in Virginia could be jailed for failing drug tests

NEWPORT NEWS, Va. (AP) — The mother of a 6-year-old who shot his teacher in Virginia could be jailed Thursday for failing drug tests while awaiting sentencing on federal weapons charges that she used marijuana while possessing a firearm. A bond revocation hearing is set in federal court in Newport News for Deja Taylor. Her […]

7 hours ago

FILE - Anthony Sanchez, right, is escorted into a Cleveland County courtroom for a preliminary hear...

Associated Press

Man set to be executed for 1996 slaying of University of Oklahoma dance student

McALESTER, Okla. (AP) — Oklahoma is set to execute an inmate Thursday morning for the 1996 slaying of a University of Oklahoma dance student, a case that went unsolved for years until DNA from the crime scene matched a man serving time for burglary. Anthony Sanchez, 44, is scheduled to receive a three-drug injection at […]

7 hours ago

A Brightline train approaches the Fort Lauderdale station on Friday, Sept. 8, 2023, in Fort Lauderd...

Associated Press

First private US passenger rail line in 100 years is about to link Miami and Orlando at high speed

MIAMI (AP) — The first big test of whether privately owned high-speed passenger train service can prosper in the United States will launch Friday when Florida’s Brightline begins running trains between Miami and Orlando, reaching speeds of 125 mph (200 kph). It’s a $5 billion bet Brightline’s owner, Fortress Investment Group, is making, believing that […]

8 hours ago

The entrance to the Las Vegas Review-Journal campus is shown in Las Vegas, Wednesday, Aug. 30, 2023...

Associated Press

Outdated headline sparks vicious online hate campaign directed at Las Vegas newspaper

NEW YORK (AP) — A Las Vegas newspaper is being viciously attacked online for its coverage of an alleged murder of a retired police chief, either because of a misunderstanding or a deliberate attempt to mislead. The “firehose of hatred” has led the Las Vegas Review-Journal to sift through email directed at one of its […]

8 hours ago

Disbarred attorney Alex Murdaugh arrives in court in Beaufort, S.C. Thursday, Sept. 14, 2023. Murda...

Associated Press

Alex Murdaugh plans to do something he hasn’t yet done in court — plead guilty

Convicted murderer Alex Murdaugh is expected to step before a judge Thursday and do something he hasn’t done in the two years since his life of privilege and power started to unravel: plead guilty to a crime. Murdaugh will admit in federal court that he committed 22 counts of financial fraud and money laundering, his […]

9 hours ago

Sponsored Articles

Swedish Cyberknife...

September is Prostate Cancer Awareness Month

September is a busy month on the sports calendar and also holds a very special designation: Prostate Cancer Awareness Month.

Ziply Fiber...

Dan Miller

The truth about Gigs, Gs and other internet marketing jargon

If you’re confused by internet technologies and marketing jargon, you’re not alone. Here's how you can make an informed decision.

Education families...

Education that meets the needs of students, families

Washington Virtual Academies (WAVA) is a program of Omak School District that is a full-time online public school for students in grades K-12.

Emergency preparedness...

Emergency planning for the worst-case scenario

What would you do if you woke up in the middle of the night and heard an intruder in your kitchen? West Coast Armory North can help.

Innovative Education...

The Power of an Innovative Education

Parents and students in Washington state have the power to reimagine the K-12 educational experience through Insight School of Washington.

Medicare fraud...

If you’re on Medicare, you can help stop fraud!

Fraud costs Medicare an estimated $60 billion each year and ultimately raises the cost of health care for everyone.

Montana clinic files for bankruptcy following $6 million judgment over false asbestos claims