BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
CITY OF LACROSSE (HIGHWAY
LACROSSE CITY EMPLOYEES UNION, LOCAL 180,
CITY OF LACROSSE
(Chiropractic Coverage Grievance)
Davis, Birnbaum, Marcou, Seymour & Colgan, LLP, by Mr. James G.
Birnbaum and Ms. Carla J. Hughey, on behalf of the
Mr. Peter B. Kisken, Deputy City Attorney, on behalf of the
The above-captioned parties, herein "Union" and "City", are signatories to a
bargaining agreement providing for final and binding arbitration. Pursuant thereto, hearing
in LaCrosse, Wisconsin, on January 18, January 19, March 21, and March 22, 2001, at
the parties agreed that I should retain my jurisdiction if the grievance is sustained. The
transcribed and the parties thereafter filed briefs, reply briefs, and other materials that were
by August 23, 2001.
Based upon the entire record and arguments of the parties, I issue the following
Since the parties did not jointly agree on the issues, I have framed them as follows:
1. Is the grievance arbitrable?
2. If so, did the City violate
Article 3, Section G, and/or Memorandum of Understanding No.
5 of the contract after it changed the third-party administrator for its self-insurance plan and
after certain employees were denied chiropractic benefits under the contractually-provided
health insurance plan and, if so, what is the appropriate remedy?
The City for a number of years has self-funded its health insurance plan, which
chiropractic care. Prior to January 1, 1998, the City contracted with Wisconsin Physicians'
("WPS"), to serve as the plan's administrator. The City on January 1, 1998, replaced WPS
Gundersen Lutheran Health Plan, Inc. ("Gundersen"), which has served as the plan's
from that time forward.
The City's health insurance plan is offered to all qualified City employees, including
are in different bargaining units, and employees under the plan are free to select any doctor
It therefore is an open, rather than a closed, plan. The instant grievance is the only one that
Dr. David Bentz, a chiropractor, could not recall one instance of where chiropractic
denied under WPS. He added that since Gundersen "has taken over, virtually every patient
comes in, they will allow some care, but then the denials come in stating its not medically
and they'll state that the documentation is not appropriate, although I vigorously challenge
that. . .",
and that Gundersen now requires "infinite documentation, and when you send it in, they still
saying it's inappropriate." He also said that he has treated City employee Connie Doerre
that she mainly suffers from lower back and neck pain; that she has had the same problems
before and after January 1, 1998; that he has provided the same treatment and documentation
throughout that time; that Gundersen refused to pay for treatment rendered to her on July 17,
that Gundersen also stated that there was improper documentation; and that WPS earlier had
for the identical treatment.
He also testified that he has treated City employee Bernie Niedercorn since
1997; that Niedercorn suffers from lower back pain; and that whereas WPS paid for that
treatment, Gundersen refused to pay for certain post-1998 treatment that was identical in
added that Gundersen has rejected the kind of documentation previously approved by WPS;
unlike WPS, has refused to pay for subluxation a
misalignment of a spinal vertebra or extremity joint; and that its refusal to pay for
that chiropractic coverage is no longer available because Wisconsin state law mandates that
subluxations are the only treatments chiropractors can perform. He also said that Gundersen
changed the insurance coverage Doerre and Neidercorn previously had received under WPS
unlike WPS, it no longer pays for surface EMG studies.
On cross-examination, Dr. Bentz testified that the most common reasons for
from Gundersen were "insufficient documentation"; that he has treated Doerre since 1990;
"maintenance care" refers to the plateau and stabilization that some patients reach after
treatment; that such maintenance treatment is not covered under the health plan; that he
exercises for Doerre; that he did not consider sending Doerre out to see a different doctor for
different treatment; and that Gundersen never denied any of Doerre's treatment up to
2000, when it informed him that additional documentation for her would be needed in the
(Union Exhibit 3). He also said that one of his patients was denied care in 1997.
Dr. David Washa, a chiropractor, testified that at the beginning of the year 2000, "I
experiencing denials for chiropractic service that were once being paid for routinely by the
company", and that "after '98, doing the same thing I did prior to 1998, I wasn't getting
He said that he treated City employee Anita Lemke since 1992; that she suffers from finger
difficulty in sleeping, headaches and lower back pain; that he treated her by manipulating her
that all of her bills were paid before 1998; and that, "The services began becoming denied in
of the year 2000" for services that had been previously reimbursed. He also said that
themselves mark down the code for their subjective pain and that medical care under
"been changed, in the fact that what was once considered routine
for reimbursement to Ms.
Lemke, suddenly and inexplicably became, either denied or required additional paperwork
never required upon me before 1998."
He also said that Gundersen insisted on more documentation; that
some bills were denied on the
ground they were not medically necessary; and that he was never told between 1993-1998
claims were not medically necessary.
On cross-examination, Dr. Washa testified that he has referred Lemke to other
Lemke over the years has suffered from different ailments; and that he saw Lemke for about
times over a seven-year period; that his documentation was never questioned before 1998.
Susieann Hammond, a LaCrosse School District employee, is covered under the
care plan because her husband is a City employee. She testified that she broke her back and
has been treated by Dr. William Sterba, a chiropractor, for about six years; that Dr. Sterba
in the past
recommended that she be hospitalized, that she take pain pills, and that she should exercise;
has not taken medicine because of allergic reactions and that she has exercised; and that Dr.
treatment "Definitely" alleviated her pain. She also said that Dr. Sterba in 2000 cured her
Gundersen Lutheran Clinic was unable to do so because its "physical therapy wasn't
Dr. Sterba recommended she see an orthopedic surgeon about her rotator cuff problem; that
Gundersen paid all of her claims after it asked Dr. Sterba for more documentation; that
told her that chiropractic care would be denied after March 13, 2000, unless she developed a
condition; and that she disagrees with Gundersen's claim that chiropractic care was not
On cross-examination, Hammond testified that before she saw Dr. Sterba, she had
seen a medical doctor about her condition, and that he did not relieve her pain.
Dr. Sterba, when asked if chiropractic coverage has changed since 1998, replied:
"On paper, no. They have great benefits on paper, but when it
comes down to brass tacks, it's
changed dramatically, yes."
He testified that he has been treating Hammond since about 1993 for various
that all the care was paid for before 1998; that while Gundersen paid him for those pre-1998
it informed him that certain care rendered between October 25, 1999 January 8,
2000, was not
medically necessary; that Gundersen imposed new standards to determine whether care was a
necessity; and that chiropractic coverage for Hammond has changed since 1998.
On cross-examination, Dr. Sterba testified that while Gundersen paid for all of
treatment, Hammond never returned for treatment after being told that certain past treatment
medically necessary. He also said, "I don't have this problem with any other group
that the concept of medical necessity is dynamic and always changing.
Union President Ken Iverson testified that the November 9, 1999, Memorandum of
Understanding No. 5 in the collective bargaining agreement came about after the City in the
1990's had earlier tried to change the "usual and customary" rates provided for in the health
plan, and that the City told employees that there would be no reduction in health care
Gundersen took over from WPS in January, 1998. He also said that he first heard
chiropractic care in January, 2000, and that the Union in the earlier arbitration proceeding
Arbitrator Lee Crowley told the City the names of individual
employees who would be called to testify. He also said: "there's been a change in our
concerning general chiropractic care without it being negotiated through the union and the
On cross-examination, Iverson testified that the Union at a November 18, 2000,
meeting did not identify specific employees because all the employees had not been identified
certain employees had trouble receiving chiropractic benefits before 1998.
City employee Doerre suffers from back, neck and shoulder pain. She testified that
has treated her by doing spinal adjustments; that all of his treatment before 1998 was paid
some bills totaling $1,350 were not paid in 2000; and that that marked a change even though
treatment was "Exactly the same." She received a letter dated September 29, 1998, stating
City had agreed to pay all 1998 claims "on an exception basis" and that, "In the future,
medical necessity will be applied." She received another letter on February 8, 2000, stating
her chiropractic care continued beyond February 8 of 2000, such charges would be denied as
medically necessary. Pursuant to the plan's internal appeal process, Doerre appealed
refusal to pay certain claims on the grounds that the care was not medically necessary, but
unsuccessful in doing so. She also stated that chiropractic benefits changed between 1998
On cross-examination, Doerre testified that she reached a tentative plateau "at
throughout the years, yes" and that Dr. Bentz never gave her a release date. She added that
never sought alternative types of medical treatment for her back pain because "the
me relief instantly within a matter of weeks if the pain is real bad" and because medical
"either give you pain pills or muscle relaxers and that doesn't solve the problem." She
added that she
suffers from lower back, neck, and shoulder pain, and that she never told Dr. Bentz she had
City employee Niedercorn testified that Dr. Annis, a neurosurgeon at Gundersen
Clinic, told him in 1994 that he should see a chiropractor because "that was the best pain
me"; that Dr. Alexis Norelle, another neurosurgeon at the Gundersen Lutheran Clinic, wrote
August 26, 1998 (Union Exhibit 6), that chiropractic treatment "is a very reasonable
alternative and certainly cheaper in the long run. . ."; that he subsequently was treated by
and that all of his chiropractic bills were paid before February 8, 2000, when Gundersen
that his chiropractic care no longer would be covered. Niedercorn appealed that denial
the plan's internal appeal procedure, but to no avail. Because of the refusal to pay for his
care, Niedercorn has been treated by a chiropractor only three times since February 8, 2001,
he has paid for himself. Asked to describe his current pain, he replied:
A Well, I live with it from day-to-day. It may be a
bull rider's mentality, but this is what I do
for a living, and I accept it. The pain is a never-ending it's like a lingering
more I jar my back and neck, the harder it is on me. But I've never come to work for a
paycheck and I don't intend to. The pain is at times daily a No. 2. And the only alternative
probably would be to have surgery, and there are no guarantees that I'm willing to take the
risk of a 50-50 percent.
He also replied "Most definitely", when asked if his chiropractic coverage has changed
On cross-examination, he testified that his chiropractor never referred him to a
doctor; that his pain now is "probably a four" on a scale of 10; that all of his pain was
that he stopped exercising because it was not doing him any good; and that he is unaware
is a worker's compensation exclusion under the City's health plan.
Linda Italiano is married to City employee George Italiano and is covered under the
health plan. She testified that she suffers from shoulder and back pain; that she has been
Dr. Peterson, a chiropractor, since about 1990; that she is unsure whether all of her
was paid for before January 1, 1998; and that she now owes Dr. Peterson $4,233.80
in unpaid bills.
On cross-examination, she testified that she was treated by Dr. Peterson about 42
1998 and 41 times in 1999; that she sees him about every two weeks; that Gundersen has
some of these claims; and that she does not know whether all of her bills were paid for
She also says that she regularly does the exercises that Dr. Peterson prescribed; that Dr.
not given her a release date; that Dr. Peterson has never recommended that she see a medical
and that he has never prescribed a medicine for her.
George Italiano, Linda Italiano's husband, testified that all of her chiropractic bills
for before 1998; that Gundersen refused to pay certain bills when it took over; that he,
appealed some of those denials, but to no avail; and that Gundersen's refusal to pay certain
constituted a change in his chiropractic coverage. He also said that his wife broke her foot
subsequently fell down and reinjured herself; that her medical doctor referred her to a
and that Gundersen later refused to pay for that treatment.
On cross-examination, he said that WPS in 1997 initially refused to pay for
treatment given to him and his wife on the ground it was not medically necessary; that WPS
eventually paid for it after he filed an appeal; and that he did not appeal all of Gundersen's
to pay certain chiropractic bills. He also said that he had received chiropractic treatment
medical doctor recommended it and that he was never given a release date.
Dr. Peterson treated Linda Italiano over "different conditions". He said that whereas
her treatment was paid for before 1998, Gundersen refused to pay for similar treatment in
the ground that it was not medically necessary; that he disagrees with that claim; that he has
her from his care at various times throughout his treatment of her; that Gundersen after 1998
questioned his documentation; that he believes he has supplied the proper documentation; and
the level of coverage for Linda Italiano from 1998 to the present "has changed dramatically"
they "just deny everything". He also said that he treated Linda Italiano many more times
than he did after 1998 because she has required less treatment and that certain unpaid claims,
totaling about $4,233, are now pending before Gundersen.
On cross-examination, Dr. Peterson testified that WPS in 1996 required him to
further documentation relating to Linda Italiano's treatment and that while it is not
insurance companies to require further documentation, "It's what they do with it when they
records that seems to be the difference." He also said that Linda Italiano needed more
when she recently fell and broke her foot and that Gundersen has never told him he no
longer can do
City employee Lemke testified that Dr. Washa has treated her since 1992 for back
pain, shoulder pain, and neck pain; that all such treatment was paid for before 1998; that
has refused to pay for similar treatment; that Gundersen told her that all of her treatment
1992-1998 was "not medically necessary" (Union Exhibit 27); and that she owes about $340
unpaid chiropractic bills. She unsuccessfully appealed her denial of chiropractic coverage, at
time she was told that whoever had reviewed her medical file had never reviewed her X-rays
she never was on a maintenance plan. She said that she asked both the City and Gundersen
provide her with whatever guidelines are being followed in determining whether a claim
paid, and that both refused to do so. She also said that her chiropractic coverage has
because "Everything was paid prior to 1998", which is no longer the case even though her
now is roughly identical to her pre-1998 treatment.
On cross-examination, Lemke testified that she had 171 chiropractic visits in 7 years
she has seen a physical therapist and a medical doctor regarding her pain. She also said that
fill out her treatment card which measures her level of pain; that some claims were denied
some of Dr. Washa's notes supposedly were deficient; and that she sometimes forgets to do
exercises. She also said that most of her pain is attributed to her job; that she has never filed
worker's compensation claim; that Dr. Washa has told her she has a deteriorating disk in her
that her back pain is caused by a prior injury; and that he has taken X-rays of her condition.
City employee Alan Tauscher, who has been treated by Dr. Sharon Fuller, is on a
absence because of his back problem and surgery. Gundersen has refused to pay about $400
chiropractic bills and it told him in December, 1998: "If treatment continues beyond
charges will be denied as not medically necessary." (Union Exhibit 44). He also said that all
pre-1998 chiropractic bills were paid and never challenged and that his treatment since 1998
the same. He filed an appeal and attended a hearing, where he asked for the guidelines
followed, only to be told that the City had them. He then asked City representative Pam
the guidelines, only to be told that Gundersen had them. He also said that Dr. Fuller
that he see a neurosurgeon and that he subsequently was examined by Dr. Burton M.
neurosurgeon, who told him in 2000: "the chiropractor, heat and massage seems to have
beneficial to him and I think that continuing would be a good idea." (Union Exhibit 70).
also said that there has been a change in his chiropractic coverage because "you keep getting
and it never happened before."
On cross-examination, he testified that Gundersen has paid some of his recent bills;
does not know whether it will pay the remaining unpaid bills; that his chiropractic coverage
changed because "we never had to go through all the paperwork"; and that treatment by
neurosurgeons has not relieved his back pain, for which he has had 3 operations. He also
he has taken many pain medications and that "Ibuprofen does more for me."
City employee Maria Italiano testified that she has received chiropractic treatment for
and neck for about 9 years and that while WPS sometimes questioned her pre-1998
eventually paid for it. She said that Gundersen since 1998 has refused to pay for similar
that she has appealed that refusal; that unpaid bills now total $372; and that she has foregone
treatment because of Gundersen's refusal to pay for it.
On cross-examination, she stated that she has never taken medicine for her back pain;
Dr. Cassellius has never referred her to a medical doctor or physical therapist; that she
her back at work; that she sees Dr. Cassellius for her back and Dr. Washa for her knees;
and that Dr.
Cassellius has never given her a date as to when her treatment would end. She also said that
never seen a medical doctor about her neck pain because: "I don't want to be put on muscle
I don't want to be put on pain medication. My stomach does not take medication well", and
"I have a lot of allergic reactions to medicine."
Dr. Cassellius has treated Linda Italiano since 1999 for neck pain, low back pain,
and arm pain. He testified that he has seen a "rather dramatic change" since 1998 in getting
paid; that Gundersen has lowered its payments for certain treatment; and that unlike WPS,
has not paid for treatment rendered on an intersegmental traction table and certain other
treatment. He also said that some of Linda Italiano's treatment was billed under worker's
compensation; that some claims remain unpaid; and that he was never told before 1998 to
a four-week care plan. He also said that chiropractic coverage
since 1998 "has dramatically changed" because of "the extreme amount of
downcoding of services (i.e. the fees that would be paid), and the denial of either
adjustments of adjunctive therapies. He also said that information requested in a September,
letter (Union Exhibit 63) from Gundersen was never a condition of payment before 1998 and
Gundersen in that letter also refused to pay for mechanical traction that was previously paid
On cross-examination, Dr. Cassellius testified that there was only one chiropractic
manipulations and adjustments before 1997; that Linda Italiano has reached "treatment
many occasions"; and that he has never referred her to a medical doctor because "she hadn't
problem that we haven't been able to effectively deal with."
Dr. Sharon Fuller testified that she saw City employees both before and after 1998,
since 1999, "there's been less coverage for the adjustments" and ultrasound treatment, slower
payment, and much more documentation in order to get paid. She has treated City employee
Tauscher since 1989 because he has suffered from low back pain, mid-back pain, and neck
also said that Gundersen has failed to pay $455 in claims; that she disputes Gundersen's
Tauscher has not improved under her care; and that she referred Tauscher to a neurosurgeon
recommended that Tauscher continue with chiropractic treatment if it gave him relief.
On cross-examination, she testified that payment depends on a number of factors; that
claims were denied before she submitted any documentation; that she is unaware of
internal appeal process; that Tauscher's condition varied over time; and that she uses travel
mark Tauscher's treatment.
2. City Witnesses
City Employee Benefits Coordinator Ghouse administers the City's self-funded health
insurance plan. She testified that there was no chiropractic care in 1978 and that the
medical necessity over the years "has not changed or changed very little." She said that
1998 had denied certain chiropractic claims filed by Christine Abramnowski, Mary
Italiano, George Italiano, and Linda Italiano on the ground that the treatment was not
necessary and that the City nevertheless agreed to pay for those claims because it retains the
to grant exceptions via the issuance of an "Exception For Claim Denial Form". She also
WPS formerly made retrospective claim denials as to whether past claims would be paid and
health plan now is better because Gundersen makes its determinations prospective in nature,
guaranteeing payment for services up to that point.
Ghouse also testified that Niedercorn was denied certain claims because they were
the City's worker's compensation system which also is self-funded, and that George and
Italiano had filed worker's compensation claims that were also denied by WPS. Asked
is any difference in coverage between WPS and Gundersen, she replied: "No, it's not. We
very hard to make sure it didn't."
On cross-examination, she testified that the City paid for all of Maria Italiano's
making "an exception" for her; that the Union was not copied with correspondence relating
exceptions; and that she did not respond to certain of Niedercorn's inquiries (Union Exhibits
15) because of advice of counsel.
Carla Marcou is employed by Gundersen and Gundersen Lutheran Medical Center as
provider-relations field representative. She formerly worked for WPS between 1992 and
said that Maria Italiano received "an out-of-pocket exception" which paid for her chiropractic
She said that unlike Gundersen, WPS did retrospective denials which could result in
paying for past claims that were denied, and that the present system is more liberal because
no out-of-pocket reviews or exceptions are needed "because the claims will not be denied
back to the date the
medical necessity was not documented and therefore the patient has no financial liability
out-of-pocket." She also said that there is no difference in the amount of documentation
required by WPS
and Gundersen; that there is no difference in the administration of chiropractic claims; and
health care booklet given to employees under Gundersen is the exact booklet given under
except for changing its cover.
On cross-examination, Marcou testified that all of Maria Italiano's chiropractic claims
paid under WPS when the City overrode WPS' initial denials and that the Union never
of the City's override policy. She also said that Gundersen refused to pay for future surface
studies in 1999 (Union Exhibit 3), and that 15 visits represent the trigger for reviewing
claims under Gundersen, which is something that is not spelled out in the benefits booklet.
Ann Kiel is employed by Gundersen. She testified that a number of claims "appeared
excessive" in 1998; that, "We started requesting records to make medical necessity
and that the documentation in some cases was "very poor". She said that the standard for
necessity now used is the same as WPS'; that the plan does cover subluxations; that EMG's
covered for certain treatment; that no claims have ever been denied without receiving the
documentation; and that she recommended in 1999 that "we try to educate the chiropractors"
sending them certain information. She also said that all chiropractic bills were paid in 1998;
about 452 visits or only 5 percent - have not been paid since 1998 (City Exhibit 30);
that some of
Lemke's and Neidercorn's claims should have been filed under worker's compensation; that
a "mistake" to tell Lemke that all of her claims since 1993 were not medically necessary;
never provided Lemke with
Gundersen's guidelines upon Ghouse's advice; and that maintenance therapy is
excluded under the
On cross-examination, Kiel testified that she has no direct knowledge of WPS'
practices; that she has never reviewed WPS' internal policies; and that she lacks any
knowledge to dispute the testimony of those employees who testified that Gundersen is not
paying for services previously paid for by WPS. She said that Gundersen will not pay for
studies; that she cannot dispute Niedercorn's testimony that Gundersen has refused to pay for
previously paid for by WPS; that the denial of some of Neidercorn and Lemke's bills had
do with worker's compensation; and that one of Gundersen's consultants determined that
Lemke's care from 1993 to 1998 was medically necessary.
Kiel also said that the booklets given to employees do not relate that a review is
triggered if there are more than 15 visits, and that some members of the internal appeal
Marc Williams and Gary Bryant, sit in and discuss the very cases where they themselves
claims, but that they do not vote on those cases. Asked whether she developed new
Yes, we did. Gundersen Lutheran Health Plan is a relatively new
plan and we didn't have any
guidelines in place yet for reviewing chiropractic claims for medical necessity, because we
Chirocare Managed Care Network for all of our other groups, so we were developing these
She was then asked:
All right. So I understand the process you followed is
you were setting up new procedures for
processing of claims, right?
All right. In addition to that, you
were setting up new standards for the determination of medical
necessity, weren't you?
Based on the industry standard
guidelines, that's correct.
Director of Personnel Jim Geissner testified that the Union refused to provide the
any details when the parties first met to discuss the Union's grievance; that chiropractic care
provided to City employees until 1988; that the City in the past has paid for claims that were
denied; and that the City has not cut health benefits. He also said that the City has paid all
$25,000 worth of claims out of $540,000; that "chiropractors have a vested interest in
checkbook flowing"; and that the City is adhering to industry standards by taking the position
On cross-examination, he said that the City "generally" committed itself to
same level of benefits when it agreed to Memorandum of Understanding No. 5.
Dr. Kevin McCabe, a chiropractor, reviewed many of the disputed claims herein.
that he agreed with the decision to deny those claims; that the notes prepared by
Dr. Peterson, Dr.
Cassellius, Dr. Washa, Dr. Bentz, Dr. Sterba and Dr. Fuller were all inadequate for one
another; and that Gundersen simply requires "the same level of documentation that is
throughout the profession." He also said that he never heard of adjustments for the ear; that
doubted the testimony of Dr. Bentz, Dr. Washa, Dr. Sterba, and Dr. Peterson to the effect
had a claim denied by WPS and/or that they have experienced special difficulties under
He also said that Tauscher (51), Lemke (57), Maria Italiano (57), Doerre (59), George
and Linda Italiano (183), had an inordinate number of visits between January 1, 1998
2001 (City Exhibit 34). He added that he had no first-hand knowledge regarding any
differences between WPS and the present plan.
On cross-examination, McCabe testified that he has been paid by the City to review
pertinent records and to testify in this proceeding. He said that he never personally
examined any of
the City employees who testified; that his knowledge about them is limited to having
files; that he is unfamiliar with WPS' claims review practices; and that the weaknesses he
Dr. Peterson's documentation were the same weaknesses that existed before 1998 and under
Charles Stanfield, a benefits consultant, testified that chiropractors are reluctant to
patients out for other medical treatment; that certain other health plans in other Wisconsin
exclude maintenance treatment from chiropractic coverage; and that the new service plan
the City and Gundersen added a phrase stating that services would be rendered in a
level. He also said that he spoke to a WPS representative who told him that WPS before
used 15 visits as a trigger mechanism for reviewing claims; that the Gundersen plan is
identical to the
prior WPS plan as far as the "level of benefits" being rendered; and that the definition of
necessity has remained the same.
On cross-examination, Stanfield testified that he has been hired by the City over the
perform various duties, and that he has no first-hand knowledge as to how WPS formerly
administered certain aspects of the health plan.
POSITIONS OF THE PARTIES
The Union mainly asserts that the City violated Article 3, Section G, of the contract
Memorandum of Understanding No. 5 by failing to maintain the pre-January 1, 1998, level
chiropractic care after Gundersen succeeded WPS and became the City's third-party
administrator for the City's self-insurance health plan. The Union thus claims that the
arbitrable and that it "followed all arbitrable procedural requirements"; that Gundersen "has
incentive to deny chiropractic claims"; that the past practice surrounding the "interpretation
application of medical necessity. . ." changed after Gundersen became the third party
and that the City has failed "to rebut the testimony of eight union members and their six
chiropractors that their chiropractic benefits have been dramatically reduced." As a remedy,
Union asks that the City be ordered to restore the status quo
ante and that it make employees whole
for all of their out-of-pocket costs spent on chiropractic care.
The City, in turn, contends that the grievance is not substantively or procedurally
because an arbitrator here lacks "subject matter jurisdiction" over the issue presented, and
Union members "failed to exhaust their internal remedies available. . ." under the Gundersen
The City also claims that the "Union has not met its burden of proof in establishing a
reduction in insurance benefits"; that the "evidence does not support the Union's past
argument"; that the City's witnesses have effectively rebutted the Union's past practice
Gundersen in fact does not have any incentive to deny chiropractic claims; and that Dr.
successfully rebutted the Union's chiropractic testimony.
In resolving the issues presented herein, it is first necessary to point out what this
Contrary to the City's claim, it does not center on the
very narrow question of whether individual
employees are or are not entitled to chiropractic care because it is "medically necessary"
current health plan. Instead, the larger issue here turns on whether the City has violated the
practice and the parties' agreements by changing the interpretation and application of the
"medically necessary" that was formerly followed by WPS, the City's prior third-party
up until Gundersen assumed that role on January 1, 1998. The Union therefore correctly
that the issue here involves what changes, if any, were made once Gundersen became the
administrator in January, 1998, and whether any such changes violated the parties'
requirements. Since individual employees cannot raise these larger questions when they have
denied chiropractic care, the instant proceeding is the proper forum for determining whether
parties' contractual agreements have been violated.
In this connection, Article 3, Sections G and H, of the contract state:
G. Level of Benefits
The health insurance benefits shall
be no less than the level of benefits quoted by WPS on
May 2, 1978.
H. City's Right to Name
The City shall have the right to
name the health insurance carrier and/or to self insure the level
of benefits described in paragraph G above. (Emphasis added.)
In addition, Memorandum of Understanding No. 5 of the parties' collective bargaining
. . .
This letter is to confirm the understandings reached by the parties
during negotiations for the
2000-2001 collective bargaining agreement. The parties both believe that additional
regarding the health insurance provisions contained in the 2000-2001 collective bargaining
may need to take place. The parties further agree that the level of health insurance benefits,
and the practices concerning UCR charges as of 12/31/93, specifically, shall not be altered
unless any such changes are negotiated in the contract.
. . .
The Union asserts that the City has violated this latter proviso because it has reduced
the level of
benefits formerly provided by WPS through the different interpretation and application of the
Since health care benefits can be reduced by the simple expedient of giving different
to the same terms and/or by following different administrative procedures even though the
themselves have not changed on the face of a plan document, the Union's challenge is proper
Article 2 of the contract, entitled "Grievance Procedure", which states:
. . .
Matters involving the interpretation,
application or enforcement of this contract shall constitute
a grievance under the provisions set forth below:
Step 1. The employee shall
meet with and discuss the grievance with their immediate
supervisor, with union representative present, within thirty (30) calendar days or by the first
regular working day following thirty (30) calendar days, of the date the employee should
known of the grievable matter. If no solution is reached, the employee may,
Step 2. Reduce the grievance
in detail to writing within seven (7) calendar days
following the meeting, using an "Initiation of Grievance Form" and submit it to the
who will forward it to the Director of Personnel, who, with the Department Head, within ten
(10) working days (Monday through Friday, excluding holidays) shall attempt to resolve the
grievance and answer the grievance in writing. Within those ten (10) working days,
representatives of the Union, the grievant, the Personnel Director, the Department Head and
the supervisor shall meet to attempt a resolution of the disputed matter.
Step 3. If a satisfactory
solution cannot be reached, the Union may, within thirty (30)
calendar days of the grievance meeting, appeal to the Wisconsin Employment Relations
Commission who will appoint a neutral arbitrator. The Union shall copy the City on all
requests for grievance arbitration, the findings of the arbitrator to be final and binding on the
It is understood that the 30 calendar day
requirement to file a grievance in Step #1 above shall
be interpreted to mean the next regularly scheduled working day that both the employee and
supervisor are present at work.
The parties may by written agreement
extend the time limits contained in the grievance
The arbitrator shall not add to, or subtract
from the terms of this agreement.
. . .
There is nothing in this part of the contract or any other
part of the contract for that matter that
excludes health insurance disputes from the contractual grievance procedure.
To the contrary, Article 2 goes on to state: "The grievance procedure set forth herein
be the exclusive complaint of any employee as to any matter involving the interpretation or
application of this agreement." Accordingly, it must be assumed that grievances can be filed
"the interpretation, application or enforcement of this contract. . .", including Memorandum
Understanding No. 5, supra, which guarantees that the preexisting level
of health care benefits shall
The March 13, 2000, grievance (Joint Exhibit 4) also was timely filed because it
the City's alleged ongoing violation of Memorandum of Understanding No. 5 by refusing to
the same level of chiropractic benefits that previously existed when WPS was the third-party
administrator before Gundersen took over in January, 1998. As such, it is a continuing
can be filed at any time under the continuing violation doctrine. See Elkouri and Elkouri,
Arbitration Works (BNA, 5th Ed., 1997),
pp. 281-282. In addition, the Union properly filed its
grievance within 30 days of first learning from its members that they were being denied
care because it did not have any prior knowledge of their problems. For, as the Union's
points out, the Union did not file its grievance earlier because: "It is very difficult for a
discover when health insurance coverages are being changed" given the fact that insurance
represent "a private, privileged matter for each employee." The Union therefore complied
30-day filing requirement set forth in Article 2, Step 1, above.
The City nevertheless argues that the grievance cannot be heard because it is not
because all but one employee did not first exhaust the internal grievance procedure set forth
There also is no merit to this claim which was not formally raised by the
until the first
date of the hearing - because there is no contractual requirement that employees must do so.
addition, the City's claim runs contrary to Article 25 of the contract, entitled "Amendment
Provision", which states: "This agreement is subject to amendment, alteration or addition
only by a
subsequent written agreement between and executed by the City and the Union wherein
agreeable. . ." Here, no such written agreement relating to an exhaustion requirement exists.
In addition, the City's challenge to arbitrability claims in essence that the grievance
set forth in Article 2 quoted above should in effect be read as providing: "Matters involving
interpretation, application or enforcement of this contract except for
Understanding No. 5 and Article 3, Section G, dealing with the level of health insurance
which can only be addressed in a health plan's internal appeals system shall
constitute a grievance
under the provisions set forth below." But, the contract does not contain the underlined
that the City is insisting must be read into this part of the contract. Since an arbitrator under
2 is elsewhere prohibited from adding to the terms
of the contract in the manner urged by the City, its attempt to change the language in
cannot be sustained. Accordingly, it is immaterial whether such an appeal procedure is
under state law, as that is a separate question from whether such a procedure must be
before the Union can grieve to enforce the provisions of the collective bargaining agreement.
Moreover, any such exhaustion requirement which would be limited to the
circumstances of each individual employee each and every single time that chiropractic care
- would prevent the Union from challenging the wholesale
changes it asserts have taken place in
violation of the contract and it likewise would prevent the Union from obtaining the
it seeks here. That is why the City's approach, if adopted, would lead to endless, piecemeal
and why it would not address the broader issues raised by the Union which can be, and have
fully addressed in this proceeding.
Given the broad presumption of arbitrability noted by the courts, I therefore find the
here is arbitrable. See United Steelworkers of America v. Warrior and Gulf Navigation
Co., 363 U.S. 574 (1960); United Steelworkers of America v. American Enterprise Wheel
and Car Corp., 363 U.S. 593 (1960); Jefferson Jt. School Dist. No. 10 v. Jefferson
78 Wis. 2d 94 (1977).
The City further argues that the Union should have earlier identified the individual
who complained about their chiropractic care. As I ruled at the hearing, I agree that the
the Municipal Employment Relations Act was legally obligated to supply the City with such
information. However, nothing in the contract requires the Union to do so and the City itself
file a prohibited practice complaint to get this information. Moreover, Arbitrator Lee
earlier was designated to hear this matter, ruled that such information did not have to be
While I disagree with that ruling, the principle of res
judicata must be applied here because the City
at the beginning of the January 18, 2001, hearing had this information and because
there is no proof
that the City was prejudiced at the hearing before me by not having this information earlier.
Turning now to the substantive merits of the grievance, it must be pointed out here
record is factually complex and that there was an enormous amount of very detailed
the various witnesses who testified. As a result, it is impossible to here detail every nuance
they said. I therefore have summarized the most salient points of their testimony. This is
suggest that the entire record has not been considered. It has.
The combined testimony of City employees Niedercorn, Lemke, Doerre, Hammond,
Italiano, Maria Italiano and Tauscher, which I credit, establishes one paramount fact: All of
seen changes in their chiropractic health benefits after Gundersen took over from WPS as the
The combined testimony of Drs. Bentz, Washa, Sterba, Peterson, Fuller, and
which I also credit, establishes another paramount fact: All of them have seen changes in
chiropractic health benefits have been provided by Gundersen, including the need for
documentation, after Gundersen took over from WPS on January 1, 1998.
In the face of these massive changes, the City argues: "The Union has not met its
proof in establishing a unilateral reduction in insurance benefits."
But, how can that possibly be when: 1.), chiropractic care has been denied to
though he received similar treatment before 1998 and even though a neurosurgeon with the
Gundersen Lutheran Clinic wrote that chiropractic care for him "is a very reasonable
alternative, and certainly cheaper in the long run" (Union Exhibit 6); 2.), Gundersen
claimed that all
of Lemke's chiropractic care from 1993 to 1997 was not "medically necessary" even though
determined otherwise; 3.), Gundersen claimed that certain treatment for Doerre was not
necessary" even though WPS determined otherwise for similar treatment; 4.), Gundersen
certain chiropractic treatment given to Linda Italiano was not medically necessary even
determined otherwise for similar treatment; 5.), Gundersen told Dr. Bentz that charges for
surface EMG studies will not be covered in the future even though WPS paid for them; 6.),
Gundersen told Hammond that it would not pay for future chiropractic treatment after
2000, unless it was for "a new condition" even though WPS had determined otherwise for
treatment; 7.), Gundersen informed Tauscher that it would not pay for treatment after
2000, because it was not "medically necessary" even though WPS had determined otherwise
similar treatment and even though a neurosurgeon wrote: "the chiropractor, heat and massage
to have been beneficial to him and I think continuing would be a good idea."
In the face of all this, the City claims that the Union's chiropractic testimony was
rebutted by City witness Dr. McCabe." It certainly is true that Dr. McCabe testified
to why he believed all of the disputed chiropractor bills were properly denied based upon the
standards followed elsewhere and why he believed some of the documentation here was
commonly-accepted professional standards.
But, what goes on elsewhere is not the issue here. Rather, the issue here turns on
the pre-1998 level of benefits relating to chiropractic treatment and chiropractic
they represent the level of benefits that must be maintained under this collective
and Memorandum of Understanding No. 5. Since McCabe admitted on cross-examination
had no personal knowledge of WPS' prior claim review process, his testimony cannot be
weight when it is weighed alongside the combined, composite testimony of Drs. Bentz,
Fuller, Peterson, Sterba and Washa all of whom have direct personal knowledge and all of
testified in substance that there
has been a major change between the way Gundersen and WPS have administered and
paid for the
chiropractic health care benefits in dispute.
It therefore is immaterial whether some of the treatment here is not medically
whether some of the documentation is not proper under established health care guidelines
elsewhere. What matters here is what the parties have bargained for in
Understanding No. 5. As to that, Memorandum of Understanding No. 5 protects and
the level of benefits formerly provided by WPS even if they were not provided in any other
care plan, and even if some employees have taken advantage of WPS' and the City's largesse
seeing chiropractors once a week for several years. That is why this is not a Cadillac plan.
instead, more appropriately can be described as a Rolls Royce plan, as a Cadillac pales in
to what was formerly provided by WPS and/or the City before 1998, i.e.
In this connection, the record establishes that Linda Italiano had about 183
between January 1, 1988, and March 7, 2001 (City Exhibit 5). This most certainly
maintenance care as that term is used elsewhere in the health care industry. It therefore is
that the City has tried to rein in its chiropractic costs.
However, WPS and/or the City paid for all of Linda Italiano's 77 or so visits in 1996
or so visits in 1997. Having paid for that treatment then, the City cannot now yank the plug
continued treatment since Memorandum of Understanding No. 5 provides for such continued
treatment irrespective of costs.
I therefore want to emphasize the very narrow scope of my ruling below. Nothing
should be misconstrued to mean that I favor or that I think it is right for certain individuals
excessive treatment. All that is being decided here is whether Memorandum of
5 has been violated. If the City therefore wants to curtail its chiropractic costs
which it most
certainly has the right to do it must do so at the bargaining table rather than through
the back door
measures it and Gundersen have taken here.
That therefore raises the question of what remedy is appropriate to rectify the City's
As to that, the City must restore the status quo
ante that existed before January 1, 1998, when
WPS was the plan's administrator and when the City granted exceptions for those claims
initially denied. The City thus must immediately pay all outstanding chiropractic bills of the
above-named employees (including Linda Italiano), and it also must immediately reimburse
all of them for
any out-of-pocket expenses they may have spent on chiropractic care because of the City's
to pay for it. (Such payment need not be made for any other City employees because their
not part of this proceeding.) The City in the future also must pay for any chiropractic care
above-named employees (including Linda Italiano)
that is similar to what was provided for under WPS and/or paid by the City. As a
result, the City,
through its agent Gundersen, is expressly precluded in the future from denying payment on
ground that any such treatment for these above-named employees is "not medically
addition, the City in the future must pay for all such treatment based on the kind of
that doctors provided to WPS before January 1, 1998. As a result, the City, through its
Gundersen, is expressly precluded in the future from denying payment on the grounds that
documentation is inadequate.
As for other bargaining unit members who were not directly involved in this
City, through its agent Gundersen, is expressly precluded in the future from: (1), denying
for any chiropractic treatment that is the same or similar to what was previously paid for
and/or the City; and (2), denying payment in the future because of a purported lack of proper
documentation if such documentation was previously accepted by WPS and/or the City.
In other words, the City is contractually required pursuant to Memorandum of
No. 5 to adhere to the level of benefits, which includes documentation, previously provided
January 1, 1998. If the City fails to do that, and if chiropractic treatment is not properly
based upon the pre-January 1, 1998, level of benefits for all bargaining unit
employees and their
dependents, I will consider whatever future remedy the Union asks for after it specifically
all such nonpayments to the City and after the City has had the opportunity to respond.
In light of the above, it is my
1. That the grievance is arbitrable.
2. That the City violated Memorandum of Understanding No. 5 of the contract
changed the third-party administrator for its self-insurance plan and after certain employees
denied chiropractic benefits under the contractually-provided health insurance plan.
3. That to rectify that contractual violation, the City shall take all of the remedial
stated above which includes: (1), paying all outstanding chiropractic bills of the above-named
employees and dependents who testified herein; (2), reimbursing all said employees and
who testified herein for any out-of-pocket chiropractic expenses that have not been paid by
(3), paying for all of the chiropractic treatment that said employees and dependents receive in
future if such treatment is the same or similar to what WPS and/or the City paid for in the
honoring all documentation that chiropractors submit in the future if that is the kind of
that was accepted by WPS and/or the City before
January 1, 1998; and (5), paying for all future chiropractic treatment given to any
unit employees and their dependents if such treatment is the same or similar to what WPS
City paid for in the past.
4. That to resolve any questions that may arise over application of this Award, I
retain my jurisdiction for at least 90 days.
Dated at Madison, Wisconsin this 12th day of December, 2001.