No, the beating did happen. In fact, the reason many people say he caught the cancer in the first place was because of the shoddy work done on his broken palate and teeth at the time. He was very badly injured, the other inmate kicked and punched him repeatedly in the face. The lack of attention given to him at Marion meant that the operation wasn't really followed up on and he caught the cancer that way.
You should know that Bruce Cutler and Gerald Shargel deny all rumours and reports(though this wasnt a rumor, it was reported by four different officials at the prison and on the board of prisons. As you know, Gotti has his pride, even in prison, and would not accept these stories to be admitted by his own lawyers. My prayers are with John and his family