Mrs Geraets-Smits claimed the refusal of reimbursement for treatment for Parkinson’s disease in Kassel, which she believed was better than that available in the Netherlands by focusing on individual symptoms, was contrary to TFEU article 56. Mr Peerbooms received neurostimulation treatment in Innsbruck, which likewise would not have been covered in the Netherlands. Experts testified in both cases that it was unjustified or experimental. Dutch social insurance covered medical costs of low income people, but only if it was approved. Funding came from individual premiums, from the state, and some from other private insurance funds. Geraets-Smits and Peerbooms had paid up front in Germany and Austria. Dutch law said authorisation had required that (1) treatment had to be regarded as ‘normal in the professional circles concerned’, and (2) ‘necessary’ so that adequate care could not be provided without undue delay by a care provider in the home state. The prior authorisation requirement was challenged as being contrary to TFEU article 56. Governments submitted that hospital services were not an economic activity if it was provided free of charge under a sickness insurance scheme.
The Court of Justice held that member states could organise their social security systems, if it was compatible with EU law rules. Article 57 did not require services to be paid for by those who received it, for it to fall within article 56 – and thus a restriction required justification. However the restrictions in these cases could be justified in the interests of maintaining social security’s financial balance, or essential health reasons under TFEU article 52.
55 It must be accepted that a medical service provided in one Member State and paid for by the patient should not 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.
80 From both those perspectives, a requirement that the assumption of costs, under a national social security system, of hospital treatment provided in another Member State must be subject to prior authorisation appears to be a measure which is both necessary and reasonable.
90 It likewise follows from settled case-law that a scheme of prior 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, to that effect, Joined Cases C-358/93 and C-416/93 Bordessa and Others  ECR I-361, paragraph 25; Joined Cases C-163/94, C-165/94 and C-250/94 Sanz de Lera and Others  ECR I-4821, paragraphs 23 to 28, and Case C-205/99 Analir and Others  ECR I-1271, paragraph 37). Therefore, in order for a prior administrative authorisation scheme to be justified even though it derogates from such a fundamental freedom, it must, in any event, 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.
94 Only an interpretation on the basis of what is sufficiently tried and tested by international medical science can be regarded as satisfying the requirements set out in paragraphs 89 and 90 above.
95 It follows from those requirements that the institution of a system such as that at issue in the main proceedings, under which the authorisation decision needed to undergo hospital treatment in another Member State is entrusted to the sickness insurance funds, means that the criteria which those funds must apply in reaching that decision must be objective and independent where the providers of treatment are established.