BILLINGS, Mont. (AP) -- A federal appeals court has upheld a lower court determination that a Montana health clinic submitted hundreds of false asbestos claims on behalf of patients.

A jury decided last year that the clinic in a town where hundreds of people have died from asbestos exposure submitted more than 300 false asbestos claims that made patients eligible for Medicare and other benefits they shouldn't have received.

The Center for Asbestos Related Disease in Libby, Montana, had asked the 9th Circuit Court of Appeals to reverse last year's ruling. The clinic's attorney argued its actions were deemed acceptable by federal officials and that the judge in the case issued erroneous jury instructions.

But a three-judge panel said in a decision issued late Tuesday that the clinic couldn't blame federal officials for its failure to follow the law. The panel also said that Judge Dana Christensen's jury instructions were appropriate.

The clinic has received more than $20 million in federal funding and certified more than 3,400 people with asbestos-related disease, according to court documents. Most of the patients for whom false claims were made did not have a diagnosis of asbestos-related disease that was confirmed by a radiologist, the 9th Circuit said.

The case resulted from a lawsuit brought against the clinic by BNSF Railway. The railroad has separately been found liable over contamination in Libby and is a defendant in hundreds of asbestos-related lawsuits, according to court filings.

The clinic was ordered to pay almost $6 million in penalties and fees following last year's ruling. However, it won't have to pay that money under a settlement reached in bankruptcy court with BNSF and the federal government, documents show.

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 asbestos dust from vermiculite that was mined by W.R. Grace & Co. The tainted vermiculite was shipped through the 3,000-person town by rail over decades.

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

Symptoms can take decades to develop.