$6M Fine: Montana Clinic's Asbestos Claims Dispute

A health clinic in a Montana town, heavily affected by asbestos contamination, is seeking to overturn nearly $6 million in fines and penalties imposed after a jury found it had filed hundreds of false claims for patient benefits. The lawsuit was initiated by BNSF Railway, which is also facing liability for the asbestos contamination in Libby, Montana—a town where toxic vermiculite was mined and transported, causing widespread illness and death.

The jury's decision last year found that the clinic had incorrectly filed claims for 337 patients, allowing them to receive Medicare and other benefits they were not entitled to. The false claims were based on X-ray evidence that lacked proper medical diagnosis, which the clinic argued was acceptable under previous federal guidelines.

Judge Dana Christensen imposed a $5.8 million penalty on the clinic, with BNSF receiving 25% of this amount due to its role in bringing the case. Despite the ruling, the clinic has declared bankruptcy, though this case was dismissed to avoid taxpayer costs.

The clinic, which had certified over 3,400 people with asbestos-related diseases and received over $20 million in federal funds, has faced significant scrutiny. Victims of the Libby contamination are eligible for various taxpayer-funded services, including Medicare and disability benefits, due to a provision in the 2009 federal health law.

Additionally, BNSF is involved in multiple lawsuits related to asbestos exposure. In April, a federal jury awarded $4 million each to the estates of two deceased plaintiffs, citing the asbestos contamination from BNSF’s rail yard as a key factor in their illnesses and deaths.