In proceedings between two Luxembourg nationals, Mr Decker and Mr Kohll, and their sickness funds, the Luxembourg Conseil Arbitral des Assurance Sociales (Social Insurance Arbitration Council) and the Cour de Cassation (Court of Cassation) sought a ruling from the Court of Justice of the European Communities on whether national rules under which reimbursement of medical expenses incurred abroad is subject to prior authorisation are compatible with Community law.
Mr Decker was refused reimbursement of the cost of spectacles which he had purchased from an optician established in Arlon, Belgium, on the ground that he had purchased them abroad without prior authorisation. In Mr Kohll's case, his doctor established in Luxembourg had requested authorisation from the Union des Caisses de Maladie for his daughter to receive treatment from an orthodontist established in Trier, Germany. That request for authorisation, made in accordance with the Luxembourg Code of Social Insurance, was turned down on the grounds that the treatment was not urgent and could be provided in Luxembourg.
Such measures, under which reimbursement of the cost of medical treatment abroad is subject to prior authorisation by the social security institution, were examined by the Court from the point of view of the provisions on the free movement of goods and those on freedom to provide services.
Mr Decker argued that national rules under which an insured person was refused reimbursement of the cost of medical products purchased in another Member State constitute an unjustified barrier to the free movement of goods.
The Court found that under those rules prior authorisation was required for reimbursement of costs incurred in another Member State, and insured persons who did not obtain such authorisation were denied reimbursement. It concluded that such rules constituted a barrier to the free movement of goods, as they encouraged insured persons to purchase medical products in Luxembourg rather than in other Member States, and were consequently liable to curb the import of spectacles assembled in those States.
The Court also noted that refusal to reimburse at a flat rate the cost of spectacles purchased in another Member State could not be justified, since it had no real effect on the financing or balance of the Luxembourg social security system. Moreover, the conditions for taking up and pursuing regulated professions have been the subject of a European directive setting up a general system for the recognition of professional education. This means that the purchase of a pair of spectacles from an optician established in another Member State provides guarantees equivalent to those afforded on the sale of spectacles by an optician established in Luxembourg.
Mr Kohll argued that the fact that reimbursement of the cost of medical services, in accordance with the legislation of the State of insurance, was subject to prior authorisation by the institution of that State where the services were provided in another Member State constituted a restriction on freedom to provide services.
The Court noted that the case concerned treatment by an orthodontist, outside any hospital infrastructure, and that such treatment was to be regarded as a service. It went on to hold that the rules in question deterred insured persons from approaching providers of medical services established in other Member States. Those rules therefore constituted, for them and their patients, a barrier to the freedom to provide services.
The Court also stated it could not be excluded that the risk of seriously undermining the balance of the social security system might justify such a barrier, but found that reimbursement of the cost of treatment in accordance with the Luxembourg tariffs would have no significant effect on the financing of the Luxembourg social security system. The Court observed, finally, that the Treaty permits a Member State to restrict the freedom to provide medical and hospital services on grounds of public health. However, it had not been shown that the disputed rules were necessary for providing a balanced medical and hospital service open to all. Nor had it been argued that the rules were indispensable for maintaining an essential treatment facility or medical service on national territory.
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