Clinic files for bankruptcy over false asbestos claims

BILLINGS, Mont. — 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.

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, court documents show.

“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.

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

BNSF representatives did not respond to a request for comment.