The federal model for occupational disease care collapsed in Montana. Workers’ compensation inherits the wreckage.
On Monday, August 10, 2026, the Center for Asbestos Related Disease in Libby, Montana, posted a notice on its Facebook page and locked its doors for the last time. The clinic had been scheduled to wind down on August 31. It did not make it that far. Sixteen years after Congress wrote Libby into the Affordable Care Act as the template for a new federal approach to occupational disease, the institution that actually delivered the diagnoses, the screenings, and the eligibility determinations is gone.
This post revisits an April 2010 analysis published on this blog, which described the "Libby Care" provisions as potentially the most extensive and innovative system ever enacted for delivering medical care to injured workers. That optimism was not unreasonable at the time. What has happened since is a case study in why single-site, single-employer, single-exposure federal carve-outs cannot carry the weight the workers’ compensation system keeps trying to put on them.
The statute survived. The delivery system did not.
What "Libby Care" Actually Was
Section 10323 of the Patient Protection and Affordable Care Act added Section 1881A to the Social Security Act, codified at 42 U.S.C. § 1395rr-1. The provision, inserted by Senator Max Baucus of Montana through a Manager’s Amendment in the closing hours of the Senate debate, does something no other federal statute does. It deems individuals exposed to an environmental health hazard at a designated Superfund site to be eligible for Medicare, without regard to age, without regard to work quarters, and without regard to disability status under Section 226(a).
The architecture had three parts. First, automatic Medicare entitlement for people diagnosed with a condition attributable to the exposure. Second, a pilot program authorizing flexible benefits and services that ordinary Medicare does not cover, together with innovative reimbursement methodologies, administered since July 2011 by Noridian. Third, a competitive screening grant program under 42 U.S.C. § 1397h, funding the detection of environmental health conditions and public education about the availability of the Medicare benefit.
Eligibility turned on a designation. Libby qualified because on June 17, 2009, the EPA declared it a public health emergency under the Comprehensive Environmental Response, Compensation, and Liability Act. It was the first such declaration in Superfund history. It remains the only one.
That single fact begins the analysis. Congress built a national mechanism and then, in practice, ran exactly one site through it. East Palestine, Ohio, did not get one after the 2023 derailment. No PFAS community has received one. No downwind population, no former beryllium or uranium processing town, no petrochemical corridor. Sixteen years, seventeen hundred-plus Superfund sites, one designation.
How the Delivery System Was Dismantled
The clinic did not fail clinically. Litigation disassembled it, then defunding did.
In 2019, BNSF Railway Company filed a qui tam action under the False Claims Act, 31 U.S.C. § 3730, on behalf of the United States, alleging that CARD had submitted claims certifying asbestos-related disease without independent confirmation. The relator was itself a defendant in hundreds of Libby asbestos personal injury actions. The United States declined to intervene. The case proceeded as BNSF Railway Co. v. Center for Asbestos Related Disease, Inc., No. CV 19-40-M-DLC (D. Mont.). Pretrial rulings are available here.
In late June 2023, a seven-person jury found that CARD had submitted 337 false claims, causing more than $1 million in damage to the government. In July 2023, the district court entered a judgment of nearly $6 million in damages and penalties. In August 2023, CARD filed for Chapter 11 protection, stating that the filing was intended to keep its doors open and its staff paid while it appealed. In 2024, the Ninth Circuit affirmed the denial of CARD’s summary judgment motion, upheld the jury instructions, and sustained a $1.5 million fee and cost award to BNSF.
The collection phase followed. In May 2025, BNSF obtained a Lincoln County District Court order permitting seizure of substantially all of CARD’s property, from the building to the lawn mower, to satisfy its relator share of the judgment. The Lincoln County Sheriff closed the clinic on May 7, 2025. The United States Attorney for Montana objected, arguing that property purchased with federal grant funds could not be seized and that the state court lacked authority to collect on the government’s behalf. The dispute moved to federal court as BNSF Railway Co. v. Center for Asbestos Related Disease, Inc., No. 9:25-cv-00067 (D. Mont.).
The clinic reopened and continued operating in bankruptcy for more than eighteen months. Then the funding ended. In June 2026, after an internal review, the Centers for Disease Control and Prevention notified CARD that continued funding under its five-year Agency for Toxic Substances and Disease Registry award, issued in August 2024, was not consistent with the agency’s priorities. The grant supplied roughly $3 million per year and nearly all of CARD’s operating revenue. Sixteen employees lost their positions. The board voted to dissolve the corporation.
On August 10, 2026, three weeks ahead of schedule, CARD announced it was permanently closed. Patients arriving to collect their medical records found the building locked. The clinic stated that its ability to process and respond to records requests was limited and that it was consulting counsel and federal agencies about how records would be handled. Over its 25 years, CARD screened more than 8,900 people, certified more than 3,400 with asbestos-related disease, and contributed to more than 150 scientific publications.
The Medicare entitlement under Section 1395rr-1 still exists on paper. No clinic in Libby can still generate the diagnosis that triggers it.
The Tort Track Closed the Same Year
The federal benefit collapse did not happen in isolation. The parallel civil remedy narrowed at the same time.
In BNSF Railway Co. v. Asbestos Claims Court, 2020 MT 59, 399 Mont. 180, 459 P.3d 857, the Montana Supreme Court held that BNSF’s handling of asbestos was an abnormally dangerous activity supporting strict liability, but adopted Section 521 of the Restatement (Second) of Torts, which exempts activities carried on pursuant to a public duty imposed on a common carrier. The full opinion is also available on FindLaw.
On February 24, 2026, the Ninth Circuit applied that exception in Wells v. BNSF Railway Co., No. 24-4802 (9th Cir. Feb. 24, 2026). A Montana jury had rejected the negligence claims but found BNSF strictly liable and awarded $4 million each to the estates of Thomas Wells and Joyce Walder, who died of mesothelioma in 2020. Writing for a unanimous panel, Judge Morgan Christen held that the accumulated asbestos dust arose solely from BNSF’s operation as a common carrier executing its federally mandated duty to transport vermiculite, and reversed with instructions to enter judgment for BNSF. The panel declined to certify the question to the Montana Supreme Court. The slip opinion is posted by the Ninth Circuit and the full text is also on FindLaw.
Wells was the first community-exposure case against the railroad to reach trial. Hundreds remain pending in Montana’s Asbestos Claims Court. Judge Amy Eddy, who presides over that docket, observed before the decision was issued that a BNSF victory could prompt motions to dismiss across the entire inventory.
The primary tortfeasor left the field long ago. W.R. Grace filed for Chapter 11 in 2001, and the bankruptcy court extended its preliminary injunction to cover BNSF as a non-debtor affiliate, staying the Montana actions. See In re W.R. Grace & Co., 115 F. App’x 565 (Bankr. D. Del.). The criminal prosecution of Grace and its executives ended in acquittal in 2009, after the Ninth Circuit’s interlocutory rulings in United States v. Grace, 526 F.3d 499 (9th Cir. 2008) (en banc), and the companion appeals in United States v. W.R. Grace, 504 F.3d 745 (9th Cir. 2007). A $3 billion asbestos trust was later established.
So the ledger for Libby now reads: the mine operator resolved in bankruptcy, the transporter shielded by the common carrier exception, the clinic bankrupted by the transporter and defunded by the government, and the federal Medicare entitlement stranded without a diagnostic front end.
Why the Carve-Out Model Failed
The 2010 post treated Libby Care as a prototype that would be replicated. The structural problem is that a site-specific program has no constituency beyond the site, no institutional durability, and no defense against the ordinary hazards of appropriations politics and adversarial litigation.
• It depends on a discretionary designation. The Secretary of Health and Human Services "may" extend the program to other communities. In sixteen years, no Secretary of either party has done so. Discretionary authority that is never exercised is not a national program. It is a private bill with a general caption.
• It concentrates the entire delivery function in one provider. When benefits flow through a single nonprofit clinic, that clinic becomes the whole program. Litigation against the clinic is litigation against the benefit. There is no redundancy and no fallback.
• It funds care through annual and multi-year grants rather than entitlement. CARD had a five-year ATSDR award running to 2029. It was terminated mid-cycle on a priorities rationale. Grant-funded infrastructure is revocable in a way that entitlement is not.
• It leaves the diagnostic gatekeeper exposed to qui tam attack by the tortfeasor. This innovation has the longest reach. The False Claims Act permits a private relator to sue on the government’s behalf and take 15 to 25 percent of the recovery. Where a program’s benefit eligibility depends on provider certification, a party facing liability from that same population can use the FCA to attack the certifying provider, collect a relator share, and dismantle the plaintiff-side medical infrastructure in the process.
The Case for a Universal, Non-Litigious Mechanism
The alternative is not a better carve-out. It is to stop building carve-outs.
The federal government has now built, one disaster at a time, the Black Lung Benefits Program, the Energy Employees Occupational Illness Compensation Program, the Radiation Exposure Compensation Act, the September 11th Victim Compensation Fund and the World Trade Center Health Program, the Smallpox Emergency Personnel Protection Act, the Countermeasures Injury Compensation Program, and Libby Care. Each was enacted in response to a discrete political emergency. Each has different eligibility rules, evidentiary standards, administering agencies, and appropriations posture. Each sits alongside fifty-plus state workers’ compensation systems, each with its own occupational disease definitions, statutes of limitations, and burdens of proof.
That patchwork produces the outcome Libby illustrates. A worker or household contact with a latency-driven disease must first identify which of a dozen programs might apply, then litigate compensability, then litigate causation, then litigate apportionment among pre-existing and co-existing conditions, and only then receive treatment. Half of lifetime medical cost is incurred in the final year of life. The litigation frequently outlives the claimant.
A universal, single-payer mechanism coordinated through the Centers for Medicare & Medicaid Services would invert the sequence. Care would be delivered on diagnosis rather than on adjudication. Causation, where it mattered for prevention or for cost allocation, could be determined epidemiologically and prospectively rather than case by case and retrospectively. Most consequentially for this practice area, it would eliminate the structural necessity of the Medicare Secondary Payer Act.
The MSP Act, 42 U.S.C. § 1395y(b), exists because Medicare is a payer of last resort in a system where someone else is supposed to pay first. Every conditional payment recovery action, every Section 111 mandatory insurer reporting obligation, every Workers’ Compensation Medicare Set-Aside allocation, every CMS review threshold, and every re-review request is administrative overhead generated by the fragmentation itself. The pay-and-chase model consumes resources on both sides and delays settlement, and it does not exist in a single-payer architecture because there is no secondary payer to chase.
Notably, the Libby pilot program already anticipated this design. Section 1395rr-1 authorizes flexible benefits and services outside ordinary Medicare coverage, innovative reimbursement methodologies, and waiver authority in the Secretary. Congress wrote the coordination machinery. It simply confined it to one zip code.
What This Means for Workers’ Compensation Claims
Practitioners should not read Libby as a Montana story. The mechanisms on display are portable, and several are already in motion elsewhere.
1. Diagnostic infrastructure is now a litigable target. The qui tam template used against CARD applies to any occupational disease clinic, screening program, union medical fund, or specialty practice whose certifications drive federal benefit eligibility. Expect employers, carriers, and third-party defendants to evaluate FCA exposure of the providers who diagnose the claimants suing them. Providers serving occupational disease populations should assume their certification protocols will be examined for independent confirmation, radiologic over-read practice, and documentation of differential diagnosis.
2. Latency claims lose their evidentiary front end. Occupational disease claims turn on medical proof that the claimant usually cannot generate alone. Asbestosis, silicosis, chronic beryllium disease, coal workers’ pneumoconiosis, and occupational cancers are typically identified through surveillance programs, not through symptomatic presentation. When surveillance disappears, the claims do not disappear. They simply arrive later, sicker, and with weaker proof of causation. That shifts cost from the responsible employer to Medicare, Medicaid, and the claimant’s family, which is precisely the cost-shifting the MSP Act was enacted to prevent.
3. Medical records preservation is now an active file task. Counsel with pending or prospective claims involving Libby amphibole exposure should request complete CARD records immediately and document the request. Records survive dissolution under HIPAA, but custody during a corporate wind-up is unstable, and the clinic has already described access as limited. The same exposure exists wherever a specialty occupational clinic closes. Do not assume a successor custodian will be identified promptly, or at all.
4. The independent confirmation attack will migrate into workers' compensation forums. The CARD jury found falsity where the certifying physician did not obtain outside confirmation of asbestos-related disease. That finding is already usable rhetoric for respondents challenging a treating physician’s causation opinion, an authorized provider’s permanency evaluation, or a claimant expert’s reliance on his own reading of imaging. Anticipate the argument that a certification unaccompanied by independent verification is not merely weak but affirmatively unreliable, and build the record accordingly.
5. Third-party recovery is narrowing, which pushes exposure back onto workers' compensation. Wells extends the common carrier exception to the accumulation of hazardous residue during transport, not merely to the act of carriage. In take-home and community exposure cases, the transporter is frequently the only solvent non-bankrupt defendant. As that avenue closes, more of the loss returns to the workers' compensation system and to the employer’s experience rating, and lien and subrogation recoveries that carriers have modeled into reserves will not materialize.
6. Federal offset assumptions in settlements are unreliable. Practitioners have been negotiating around the assumption that a Libby-eligible claimant has Medicare through Section 1395rr-1 regardless of the workers' compensation outcome. The deeming provision is intact, but the diagnostic pathway that produced eligibility determinations is closed. Do not draft settlement language that presumes future access to a federal benefit whose administrative front end no longer exists. Confirm current eligibility status in writing before allocating.
7. Occupational disease remains substantially uncompensated. The underlying arithmetic has not improved since 2010. Direct medical costs of occupational illness run into the tens of billions annually, and workers’ compensation absorbs a minority share. The rest is borne by Medicare, Medicaid, private group health, and households. Underreporting remains endemic. Every structural failure like this widens that gap.
8. Asbestos itself is still not banned. EPA’s March 2024 Part 1 rule restricting chrysotile asbestos remains under challenge in Texas Chemistry Council v. EPA, No. 24-60193 (5th Cir.), argued June 1, 2026, with a decision pending. Compliance timelines run to 2029 for the chlor-alkali sector and to 2037 for the Savannah River Site. The other five fiber types and legacy asbestos are not covered. New exposure continues to accrue while the remedial infrastructure contracts.
Charting a New Course, Again
The 2010 post closed by observing that after a century of struggle, the United States had embarked on a new course for occupational medical care. That was written in good faith about a real statutory innovation. The innovation was sound. The delivery vehicle was a single nonprofit clinic in a town of three thousand people, funded by a renewable grant, exposed to hostile qui tam litigation by a party it had every reason to expect would be adverse, and dependent on an executive designation that has never been repeated.
Section 1395rr-1 is still on the books. Any Secretary of Health and Human Services could extend it tomorrow to any Superfund community with a public health emergency declaration. The more durable lesson is that occupational disease will not be solved one town at a time. The delivery of medical care to exposed workers belongs in a universal, non-litigious system coordinated with CMS, where entitlement does not depend on the employer, the chemical, the county, or the appropriations cycle.
Libby was supposed to be the beginning. It turned out to be the whole thing, and now it is over.
Recommended Citation
Gelman, Jon L., Libby Care Dies Quietly, WORKERS’ COMPENSATION, workers-compensation.blogspot.com (Aug. 15, 2026), https://workers-compensation.blogspot.com/2026/08/libby-care-dies-quietly.html.
Sources
1. Patient Protection and Affordable Care Act § 10323, Pub. L. No. 111-148, 124 Stat. 119 (2010) (adding Social Security Act § 1881A), codified at 42 U.S.C. § 1395rr-1, https://www.law.cornell.edu/uscode/text/42/1395rr-1
2. 42 U.S.C. § 1397h, Program for early detection of certain medical conditions related to environmental health hazards, https://www.law.cornell.edu/uscode/text/42/1397h
3. 42 U.S.C. § 1395rr-1 (U.S. House, Office of Law Revision Counsel, current through Mar. 30, 2026), https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395rr-1&num=0&edition=prelim
4. Noridian Healthcare Solutions, Medicare Pilot Program for Asbestos-Related Disease, https://www.noridianmedicare.com/ard/beneficiaries/enroll.html
5. Micah Drew, Libby asbestos clinic abruptly shutters, two weeks early, Daily Montanan (Aug. 13, 2026), https://dailymontanan.com/briefs/libby-asbestos-clinic-abruptly-shutters-two-week-early/
6. Scott Shindledecker, Libby’s CARD Clinic shuttered three weeks sooner than expected, Daily Inter Lake (Aug. 11, 2026), https://dailyinterlake.com/news/2026/aug/11/libbys-card-clinic-shuttered-three-weeks-sooner-than-expected/
7. Zoë Buhrmaster, After Generations of Asbestos Exposure, Sickened Libby Residents Wonder Where to Turn for Care After Clinic Closure, Flathead Beacon (Aug. 10, 2026), https://flatheadbeacon.com/2026/08/10/after-generations-of-asbestos-exposure-sickened-libby-residents-wonder-where-to-turn-for-care-after-clinic-closure/
8. CARD, CARD Expresses Gratitude to Libby Community as It Prepares to Close Patient Services, PR Newswire (June 16, 2026), https://www.prnewswire.com/news-releases/card-expresses-gratitude-to-libby-community-as-it-prepares-to-close-patient-services-302801686.html
9. Scott Shindledecker, Libby’s CARD Clinic to close after federal grant is not renewed, Daily Inter Lake (June 17, 2026), https://dailyinterlake.com/news/2026/jun/17/card-clinic-closing-its-doors-at-end-of-august-dai/
10. Wells v. BNSF Railway Co., No. 24-4802 (9th Cir. Feb. 24, 2026) (slip op.), https://cdn.ca9.uscourts.gov/datastore/opinions/2026/02/24/24-4802.pdf
11. Wells v. BNSF Railway Co., No. 24-4802 (9th Cir. 2026) (Justia), https://law.justia.com/cases/federal/appellate-courts/ca9/24-4802/24-4802-2026-02-24.html
12. BNSF Railway Co. v. Asbestos Claims Court, 2020 MT 59, 399 Mont. 180, 459 P.3d 857 (Justia), https://law.justia.com/cases/montana/supreme-court/2020/op-19-0085.html
13. BNSF Railway Co. v. Center for Asbestos Related Disease, Inc., No. CV 19-40-M-DLC (D. Mont.) (order on motions in limine), https://www.govinfo.gov/content/pkg/USCOURTS-mtd-9_19-cv-00040/pdf/USCOURTS-mtd-9_19-cv-00040-8.pdf
14. BNSF Railway Co. v. Center for Asbestos Related Disease, Inc., No. 9:25-cv-00067 (D. Mont.) (docket, CourtListener), https://www.courtlistener.com/docket/70239608/parties/bnsf-railway-company-v-the-center-for-asbestos-related-disease-inc/
15. Montana health clinic must pay nearly $6 million over false asbestos claims, judge rules, PBS News (July 2023), https://www.pbs.org/newshour/health/montana-health-clinic-must-pay-nearly-6-million-over-false-asbestos-claims-judge-rules
16. Matthew Brown, Asbestos clinic in Libby forced to close, Montana Free Press / AP (May 9, 2025), https://montanafreepress.org/2025/05/09/asbestos-clinic-forced-to-close-in-montana-town-where-thousands-have-been-sickened-by-dust/
17. KFF Health News / NPR, With Property Seized and Federal Funding Uncertain, Montana Asbestos Clinic Fights for Its Life (2025), https://kffhealthnews.org/news/article/libby-montana-superfund-asbestos-vermiculite-bnsf-lawsuit-federal-grant-doj-card/
18. In re W.R. Grace & Co. (expansion of preliminary injunction to BNSF) (CourtListener), https://www.courtlistener.com/opinion/1542211/in-re-wr-grace-co/
19. United States v. Grace, 526 F.3d 499 (9th Cir. 2008) (CourtListener), https://www.courtlistener.com/opinion/1190218/united-states-v-grace/
20. United States v. W.R. Grace (9th Cir.) (CourtListener), https://www.courtlistener.com/opinion/1428239/united-states-v-wr-grace/
21. ADAO, Fifth Circuit to Decide Fate of Limited EPA Ban on Chrysotile Asbestos (May 27, 2026), https://www.asbestosdiseaseawareness.org/newsroom/blogs/release-5th-circuit-arguments/
22. Jon L. Gelman, The Health Reform Act Charts a New Course for Occupational Health Care, Workers’ Compensation (Apr. 12, 2010), https://workers-compensation.blogspot.com/2010/04/health-reform-act-charts-new-course-for.html
About the Author
Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West-Thomson-Reuters).
Blog: Workers’ Compensation
LinkedIn: JonGelman
LinkedIn Group: Injured Workers Law & Advocacy Group
Author: Workers’ Compensation Law West-Thomson-Reuters
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© 2026 Jon L Gelman. All rights reserved.
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