The federal government decided last week it will not intervene in a lawsuit against the Center for Asbestos Related Disease in Libby that alleges the nonprofit clinic committed Medicare fraud by using federal monies to perform “unnecessary” screenings and treatments on its patients.

The complaint was filed by BNSF Railway Co. The railroad giant alleges, among other things, that the center, commonly referred to as the CARD clinic, violated the False Claims Act by using federal grants to misdiagnose patients with various asbestos-related diseases — conditions that qualify individuals for medical coverage under the Affordable Care Act when properly diagnosed.

Specifically, the rail company filed a “qui tam” complaint, which is a type of whistleblower litigation that allows persons and entities with evidence of fraud against federal programs to sue the wrongdoer on behalf of the federal government. The lawsuit was filed in U.S. District Court in 2019, but remained under seal until the Department of Justice and Office of Inspector General could launch an investigation into the allegations — a process CARD officials said they cooperated with fully.

The seal was lifted last week when federal officials formally declined to intervene in the case, though they can still choose to do so at a later date. In a document explaining its determination, the justice department noted its decision “should not be construed as a statement about the merits of the case” and that government officials also will need to sign off on any settlement in the case.

And now, because the government has declined to prosecute BNSF’s claims against the clinic, the railroad giant will attempt to prosecute the case on its own. The company, a subsidiary of the Warren Buffet-owned Berkshire Hathaway Inc., is being represented by the Knight Nicastro Mackay law firm in Missoula.

A PRIMARY argument hones in on the overall validity of asbestos-related diseases and the medical professionals that are diagnosing them.

The suit states the illnesses are “novel lung conditions” that seem to only be detectable by those associated with CARD, which relies on grant funding from the American Toxic Substances Disease Registry (ATSDR) and the Centers for Disease Control (CDC) to screen and treat its patients.

The complaint states there is “diagnostic dissention” between the clinic and outside radiologists that look at CT scans for signs of the illnesses, namely pleural thickening, which is when a thin layer of membrane develops inside the rib-cage and on the outside of the lungs. The condition is a telltale sign that an individual has been exposed to toxic Libby Amphibole Asbestos.

Courtney Wallace, a BNSF spokeswoman, elaborated on this allegation via email.

“CARD submitted screening invoices to the CDC [Centers for Disease Control] for federal payments for experts, including qualified physician radiologists who work at outside screening facilities, to read and interpret CT scans and chest x-rays,” she wrote. “However, CARD routinely diagnosed patients with ARD [asbestos-related disease] before an outside expert provided their interpretation.” She also maintained the clinic, “consistently failed to inform patients that a qualified radiologist determined the patient showed no signs of ARD.”

But the clinic, which has conducted more than 7,000 asbestos health screenings and over 3,500 lung cancer screenings since 2011, maintains all of the allegations are false.

In a prepared statement, CARD officials wrote the clinic will “face these unfounded claims head-on and looks forward to defending the care it provides to the Libby community in federal district court, and CARD looks forward to continuing to serve its patients and their community.”

The clinic’s legal representative, Timothy Bechtold of Bechtold Law Firm in Missoula, said the government’s decision not to intervene speaks volumes about the case’s merit.

“The government’s decision not to prosecute on behalf of BNSF is a telling indication that the claims against CARD are largely a fabrication,” Bechtold told the Daily Inter Lake on Thursday. “I think that the most cynical view you can take when it comes to BNSF is accurate. They are a corporation and they have corporate interests. They don’t care about people in Libby.”

BECHTOLD AND CARD officials also pointed to concerns regarding the timeline of the complaint.

In early 2019, shortly before the lawsuit against CARD was filed, the Montana Asbestos Claims Court held that BNSF was strictly liable for the damage it caused during its operations hauling asbestos-laden vermiculite from the contaminated W.R. Grace vermiculite mine. BNSF appealed the ruling and asked the high court to overturn the decision.

In March 2020, the Montana Supreme Court unanimously determined that BNSF is not shielded from liability for the hundreds of injury claims filed in the Asbestos Claims Court that allege the company had a hand in spreading toxic asbestos fibers from the now-shuttered mine. A portion of that litigation is still ongoing in that the court must now determine to what extent BNSF should be held liable — a pending decision Bechtold believes has a great deal to do with the lawsuit against CARD.

“The question with that other lawsuit right now is not whether they are liable; that’s already been determined. It’s how much are they going to pay?” he said.

Bechtold and CARD officials believe the complaint is an attempt to shutter the clinic and halt the diagnosing of asbestos-related diseases, a move that would save BNSF money in the long run based on the Supreme Court’s strict liability ruling. Bechtold said although he believes the company’s case against the clinic is weak, BNSF has the finances and resources to drag out legal battles that will ultimately divert the clinic’s precious time, energy and resources.

“When you’re the defendant in a case, whatever you’re asked to produce, you have to drop what you are doing and produce it,” Bechtold said. “So instead of investing resources into diagnosing and treating pulmonary disease for the people in Libby, they will spend their time searching and compiling pulmonary records.”

According to the statement from CARD, the clinic is no stranger to legal battles, and intends to defend its operations — the grant funding for which was recently renewed — despite BNSF’s allegations.

“CARD has been subjected to attacks by large corporate interests in the past, when W.R. Grace made similar claims against CARD, attempting to undermine CARD’s work in treating the individuals exposed in Libby,” CARD’s statement notes. “Like W.R. Grace tried in the past, BNSF is using this lawsuit to try to prevent CARD from screening and treating individuals exposed in LIbby for asbestos-related diseases.”

BNSF DENIED claims that the intent of its lawsuit is to shut down the clinic.

“The decision to pursue this litigation was not taken lightly. BNSF Railway recognizes the extraordinary impact that asbestos-related disease has had on the Libby community,” Wallace said. “In the course of our own work involving the consolidation of asbestos litigation in Montana, BNSF found very concerning allegations of fraud related to work at the Center for Asbestos Related Disease, Inc.”

The clinic has until April 23 to respond to the lawsuit.

Reporter Kianna Gardner can be reached at 758-4407 or kgardner@dailyinterlake.com