V.G. Müller-Fauré v Onderlinge Waarborgmaatschappij OZ Zorgverzekeringen UA and E.E.M. van Riet v Onderlinge Waarborgmaatschappij ZAO Zorgverzekeringen.
Date: 2003-05-13
38.  It should be borne in mind, as a preliminary point, that it is settled case-law that medical activities fall within the scope of Article 60 of the Treaty, there being no need to distinguish in that regard between care provided in a hospital environment and care provided outside such an environment (see, most recently,   Smits and Peerbooms  , paragraph 53).
39.  The Court also found, in paragraphs 54 and 55 of   Smits and Peerbooms  , that the fact that the applicable rules are social security rules and, more specifically, provide, as regards sickness insurance, for benefits in kind rather than reimbursement does not mean that the medical treatment in question falls outside the scope of the freedom to provide services guaranteed by the EC Treaty.  Indeed, in the disputes before the national court, the treatment provided in a Member State other than that in which the persons concerned were insured resulted in direct payment by the patient to the doctor providing the service or the establishment in which the care was provided.
41.  In that regard the Court has already held, in paragraph 62 of the judgment in   Smits and Peerbooms  , that while the ZFW does not deprive insured persons of the possibility of using a service provider established in a Member State other than that in which the sickness fund covering the insured is situated, it does nevertheless make reimbursement of the costs thus incurred subject to prior authorisation, which may be given, as the referring court points out, only where provision of the care at issue, irrespective of whether it involves a hospital, is a medical necessity.
42.  Since the requirement of medical necessity is in practice satisfied only where adequate treatment cannot be obtained without undue delay from a contracted doctor or hospital in the Member State in which the person is insured, this requirement by its very nature is liable severely to limit the circumstances in which such authorisation will be issued (Smits and Peerbooms  , paragraph 64).
43.  Admittedly, it is open to the Netherlands sickness insurance funds to enter into agreements with hospital establishments outside the Netherlands.  In such a case no prior authorisation would be required in order for the cost of treatment provided by such establishments to be assumed under the ZFW. However, with the exception of hospitals situated in regions adjoining the Netherlands, it seems unlikely that a significant number of hospitals in other Member States would ever enter into agreements with those sickness insurance funds, given that their prospects of admitting patients insured by those funds remain uncertain and limited (Smits and Peerbooms  , paragraphs 65 and 66).
44.  The Court has therefore already held that rules such as those at issue in the main proceedings deter, or even prevent, insured persons from applying to providers of medical services established in Member States other than that of the insurance fund and constitute, both for insured persons and service providers, a barrier to freedom to provide services (Smits and Peerbooms  , paragraph 69).
45.  However, before coming to a decision on whether Articles 59 and 60 of the Treaty preclude rules such as those at issue in the main actions, it is appropriate to determine whether those rules can be objectively justified, which is the subject of the second question.
The second and third questions
67.  It is apparent from the Court's case-law that the objective of maintaining a high-quality, balanced medical and hospital service open to all, may fall within one of the derogations provided for in Article 56 of the EC Treaty (now, after amendment, Article 46 EC), in so far as it contributes to the attainment of a high level of health protection (Kohll  , paragraph 50, and   Smits and Peerbooms  , paragraph 73).  In particular, that Treaty provision permits Member States to restrict the freedom to provide medical and hospital services in so far as the maintenance of treatment capacity or medical competence on national territory is essential for public health, and even the survival of the population (Kohll  , paragraph 51, and   Smits and Peerbooms  , paragraph 74).
68.  However, it is settled case-law that it is necessary, where justification is based on an exception laid down by the Treaty or indeed on an overriding general-interest reason, to ensure that the measures taken in that respect do not exceed what is objectively necessary for that purpose and that the same result cannot be achieved by less restrictive rules (see Case 205/84   Commission   v   Germany   [1986] ECR 3755, paragraphs 27 and 29; Case C-180/89   Commission   v   Italy   [1991] ECR I-709, paragraphs 17 and 18; Case C-106/91   Ramrath   [1992] ECR I-3351, paragraphs 30 and 31, and   Smits and Peerbooms  , paragraph 75).
70.  As to the Danish Government's argument that the actual competence of practitioners, working in surgeries or in a hospital environment, would be undermined because of numerous journeys abroad for medical purposes, the Court finds that no specific evidence has been adduced in support of this argument.
71.  The objective of maintaining a balanced medical and hospital service open to all is inextricably linked to the way in which the social security system is financed and to the control of expenditure, which are dealt with below.
The risk of seriously undermining the financial balance of the social security system
72.  It must be recalled, at the outset, that, according to the Court's case-law, aims of a purely economic nature cannot justify a barrier to the fundamental principle of freedom to provide services (see, to that effect, Case C-398/95   SETTG   [1997] ECR I-3091, paragraph 23, and   Kohll  , paragraph 41).
73.  However, in so far as, in particular, it could have consequences for the overall level of public-health protection, the risk of seriously undermining the financial balance of the social security system may also constitute   per se   an overriding general-interest reason capable of justifying a barrier of that kind (Kohll  , paragraph 41, and   Smits and Peerbooms  , paragraph 72).
75.  In that regard, the distinction between hospital services and non-hospital services may sometimes prove difficult to draw.  In particular, certain services provided in a hospital environment but also capable of being provided by a practitioner in his surgery or in a health centre could for that reason be placed on the same footing as non-hospital services. However, in the main actions, the fact that the care at issue is partly hospital treatment and partly non-hospital treatment has not given rise to disagreement between the parties to the main proceedings or on the part of the Member States which have submitted observations under Article 23 of the EC Statute of the Court of Justice or the Commission.
Hospital services
76.  As regards hospital services, such as those provided to Ms Van Riet in Deurne hospital, the Court, in paragraphs 76 to 80 of the judgment in   Smits and Peerbooms  , made the following findings.
77.  It is well known that the number of hospitals, their geographical distribution, the way in which they are organised and the facilities with which they are provided, and even the nature of the medical services which they are able to offer, are all matters for which planning must be possible.
78.  As may be seen, in particular, from the system of agreements involved in the main actions, this kind of planning generally meets a variety of concerns.
79.  For one thing, it seeks to achieve the aim of ensuring that there is sufficient and permanent accessibility to a balanced range of high-quality hospital treatment in the State concerned.
80.  For another thing, it assists in meeting a desire to control costs and to prevent, as far as possible, any wastage of financial, technical and human resources. Such wastage would be all the more damaging because it is generally recognised that the hospital care sector generates considerable costs and must satisfy increasing needs, while the financial resources which may be made available for health care are not unlimited, whatever the mode of funding applied.
81.  In those circumstances, a requirement that the assumption of costs, under a national social security system, of hospital treatment provided in a Member State other than that of affiliation must be subject to prior authorisation appears to be a measure which is both necessary and reasonable.
82.  As regards specifically the system set up by the ZFW, the Court clearly acknowledged that, if insured persons were at liberty, regardless of the circumstances, to use the services of hospitals with which their sickness insurance fund had no agreement, whether those hospitals were situated in the Netherlands or in another Member State, all the planning which goes into the system of agreements in an effort to guarantee a rationalised, stable, balanced and accessible supply of hospital services would be jeopardised at a stroke (Smits and Peerbooms  , paragraph 81).
83.  Although Community law does not therefore in principle preclude a system of prior authorisation for this category of services, the conditions attached to the grant of such authorisation must none the less be justified in the light of the overriding considerations mentioned above and must satisfy the requirement of proportionality referred to in paragraph 68 above.
84.  It likewise follows from settled case-law that a scheme of prior administrative authorisation cannot legitimise discretionary decisions taken by the national authorities, which are liable to negate the effectiveness of provisions of Community law, in particular those relating to a fundamental freedom such as that at issue in the main proceedings (see Joined Cases C-358/93 and C-416/93   Bordessa and Others   [1995] ECR I-361, paragraph 25; Joined Cases C-163/94, C-165/94 and C-250/94   Sanz de Lera and Others   [1995] ECR I-4821, paragraphs 23 to 28, and Case C-205/99   Analir and Others   [2001] ECR I-1271, paragraph 37).
85.  Thus, in order for a prior administrative authorisation scheme to be justified even though it derogates from a fundamental freedom of that kind, it must be based on objective, non-discriminatory criteria which are known in advance, in such a way as to circumscribe the exercise of the national authorities' discretion, so that it is not used arbitrarily (Analir and Others  , paragraph 38). Such a prior administrative authorisation scheme must likewise be based on a procedural system which is easily accessible and capable of ensuring that a request for authorisation will be dealt with objectively and impartially within a reasonable time and refusals to grant authorisation must also be capable of being challenged in judicial or quasi-judicial proceedings (Smits and Peerbooms  , paragraph 90).
86.  In the main actions, the disputes do not concern the actual cover provided by the Netherlands sickness insurance scheme for the medical and hospital treatment with which Ms Müller-Fauré and Ms Van Riet were provided.  In those actions, what is disputed is whether it was a medical necessity for them to have the treatment at issue in Germany and Belgium respectively, rather than in the Netherlands.  In that regard, in paragraphs 99 to 107 of   Smits and Peerbooms  , the Court also ruled on that condition concerning the necessity of the proposed treatment, to which the grant of authorisation is subject.
89.  The condition concerning the necessity of the treatment, laid down by the legislation at issue in the main proceedings, can be justified under Article 59 of the Treaty, provided that the condition is construed to the effect that authorisation to receive treatment in another Member State may be refused on that ground only if treatment which is the same or equally effective for the patient can be obtained without undue delay from an establishment with which the insured person's sickness insurance fund has an agreement (Smits and Peerbooms  , paragraph 103).
90.  In order to determine whether treatment which is equally effective for the patient can be obtained without undue delay in an establishment having an agreement with the insured person's fund, the national authorities are required to have regard to all the circumstances of each specific case and to take due account not only of the patient's medical condition at the time when authorisation is sought and, where appropriate, of the degree of pain or the nature of the patient's disability which might, for example, make it impossible or extremely difficult for him to carry out a professional activity, but also of his medical history (see, to that effect,   Smits and Peerbooms  , paragraph 104).
91.  The Court also stated, at paragraphs 105 and 106 of   Smits and Peerbooms  , that:
─  thus construed, the condition concerning the necessity of treatment can allow an adequate, balanced and permanent supply of high-quality hospital treatment to be maintained on the national territory and the financial stability of the sickness insurance system to be assured;
─  were large numbers of insured persons to decide to be treated in other Member States even when the hospitals having agreements with their sickness insurance funds offer adequate identical or equivalent treatment, the consequent outflow of patients would be liable to put at risk the very principle of having agreements with hospitals and, consequently, undermine all the planning and rationalisation carried out in this vital sector in an effort to avoid the phenomena of hospital overcapacity, imbalance in the supply of hospital medical care and logistical and financial wastage.
92.  However, a refusal to grant prior authorisation which is based not on fear of wastage resulting from hospital overcapacity but solely on the ground that there are waiting lists on national territory for the hospital treatment concerned, without account being taken of the specific circumstances attaching to the patient's medical condition, cannot amount to a properly justified restriction on freedom to provide services. It is not clear from the arguments submitted to the Court that such waiting times are necessary, apart from considerations of a purely economic nature which cannot as such justify a restriction on the fundamental principle of freedom to provide services, for the purpose of safeguarding the protection of public health.  On the contrary, a waiting time which is too long or abnormal would be more likely to restrict access to balanced, high-quality hospital care.
Non-hospital services
93.  As regards non-hospital medical services such as those supplied to Ms Müller-Fauré and, in part, to Ms Van Riet, no specific evidence has been produced to the Court, not even by the Zwijndrecht and Amsterdam Funds or the Netherlands Government, to support the assertion that, were insured persons at liberty to go without prior authorisation to Member States other than those in which their sickness funds are established in order to obtain those services from a non-contracted provider, that would be likely seriously to undermine the financial balance of the Netherlands social security system.
96.  Furthermore, care is generally provided near to the place where the patient resides, in a cultural environment which is familiar to him and which allows him to build up a relationship of trust with the doctor treating him.  If emergencies are disregarded, the most obvious cases of patients travelling abroad are in border areas or where specific conditions are to be treated.  Furthermore, it is specifically in those areas or in respect of those conditions that the Netherlands sickness funds tend to set up a system of agreements with foreign doctors, as the observations submitted to the Court reveal.
98.  In any event, it should be borne in mind that it is for the Member States alone to determine the extent of the sickness cover available to insured persons, so that, when the insured go without prior authorisation to a Member State other than that in which their sickness fund is established to receive treatment there, they can claim reimbursement of the cost of the treatment given to them only within the limits of the cover provided by the sickness insurance scheme in the Member State of affiliation.
The argument based on the essential characteristics of the Netherlands sickness insurance scheme
100.  In that regard it follows from settled case-law that Community law does not detract from the power of the Member States to organise their social security systems (see, in particular, Case 238/82   Duphar and Others   [1984] ECR 523, paragraph 16, and Case C-70/95   Sodemare and Others   [1997] ECR I-3395, paragraph 27).  Therefore, in the absence of harmonisation at Community level, it is for the legislation of each Member State to determine the conditions on which social security benefits are granted (see, in particular, Case 110/79   Coonan   [1980] ECR 1445, paragraph 12; Case C-349/87   Paraschi   [1991] ECR I-4501, paragraph 15, and Joined Cases C-4/95 and C-5/95   Stöber and Piosa Pereira   [1997] ECR I-511, paragraph 36). However, it is nevertheless the case that the Member States must comply with Community law when exercising that power (Decker  , paragraph 23, and   Kohll  , paragraph 19).
102.  First, achievement of the fundamental freedoms guaranteed by the Treaty inevitably requires Member States to make some adjustments to their national systems of social security.  It does not follow that this would undermine their sovereign powers in this field. It is sufficient in this regard to look to the adjustments which they have had to make to their social security legislation in order to comply with Regulation No 1408/71, in particular with the conditions laid down in Article 69 thereof regarding the payment of unemployment benefit to workers residing in the territory of other Member States when no national system provided for the grant of such benefits to unemployed persons registered with an employment agency in another Member State.
103.  Second, as has already been made clear in paragraph 39 above, a medical service does not cease to be a provision of services because it is paid for by a national health service or by a system providing benefits in kind.  The Court has, in particular, held that a medical service provided in one Member State and paid for by the patient cannot cease to fall within the scope of the freedom to provide services guaranteed by the Treaty merely because reimbursement of the costs of the treatment involved is applied for under another Member State's sickness insurance legislation which is essentially of the type which provides for benefits in kind (Smits and Peerbooms  , paragraph 55).  The requirement for prior authorisation where a person is subsequently to be reimbursed for the costs of that treatment is precisely what constitutes, as has already been stated in paragraph 44 above, the barrier to freedom to provide services, that is to say, to a patient's ability to go to the medical service provider of his choice in a Member State other than that of affiliation.  There is thus no need, from the perspective of freedom to provide services, to draw a distinction by reference to whether the patient pays the costs incurred and subsequently applies for reimbursement thereof or whether the sickness fund or the national budget pays the provider directly.
104.  It is in the light of those observations that it is appropriate to determine whether removal of the requirement for sickness insurance funds to grant prior authorisation for non-hospital health care provided in a Member State other than that of affiliation, is such as to call in question the essential characteristics of the system of access to health care in the Netherlands.
105.  First, when applying Regulation No 1408/71, those Member States which have established a system providing benefits in kind, or even a national health service, must provide mechanisms for   ex post facto   reimbursement in respect of care provided in a Member State other than the competent State.  That is the case, for example, where it has not been possible to complete the formalities during the relevant person's stay in that State (see Article 34 of Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation No 1408/71) or where the competent State has authorised access to treatment abroad in accordance with Article 22(1)(c) of Regulation No 1408/71.
106.  Second, as has already been stated in paragraph 98 above, insured persons who go without prior authorisation to a Member State other than the one in which their sickness fund is established to receive treatment there can claim reimbursement of the cost of the treatment received only within the limits of the cover provided by the sickness insurance scheme of the Member State of affiliation.  Thus, in the present case, it is apparent from the documents before the Court that, in relation to the EUR 3 806.35 paid by Ms Müller-Fauré to a provider established in Germany, the Zwijndrecht Fund would in any event, given the extent of the insurance cover provided by the Fund, contribute only up to a maximum amount of EUR 221.03.  Likewise, the conditions on which benefits are granted, in so far as they are neither discriminatory nor an obstacle to freedom of movement of persons, remain enforceable where treatment is provided in a Member State other than that of affiliation.  That is particularly so in the case of the requirement that a general practitioner should be consulted prior to consulting a specialist.
107.  Third, nothing precludes a competent Member State with a benefits in kind system from fixing the amounts of reimbursement which patients who have received care in another Member State can claim, provided that those amounts are based on objective, non-discriminatory and transparent criteria.