FACULTY OF LAW Stockholm University
Disparities in EU legal
instruments regarding cross- border healthcare
A comparative study of Regulation 883/2004 and Directive 2011/24/EU and their potential effect on Union goals;
especially the free movement provisions
Alexander Bortfeldt
Thesis in European Economic Law, 15 HE credits Supervisor: Jaan Paju
Stockholm, Spring term 2020
Table of contents
ACKNOWLEDGMENTS ... IV ABBREVIATIONS ... V
1. INTRODUCTION ... 1
2. RESEARCH QUESTIONS ... 2
3. LIMITATIONS AND OUTLINE ... 3
4. METHODOLOGY AND APPROACH ... 4
4.1. EU traditional legal method ... 4
4.2. Comparative legal method ... 5
4.3. Integrative methodological approach ... 5
5. HEALTHCARE IN THE EUROPEAN UNION ... 6
5.1. A short history of healthcare ... 6
5.2. Healthcare from a national perspective ... 7
5.3. EU healthcare legislation ... 9
5.3.1. Treaty based healthcare ... 9
5.3.2. Regulation 883/2004 ... 13
5.3.2.1. A need for a third coordinating Regulation? ... 13
5.3.2.2. Structure and features of the ‘new Regulation’ ... 14
5.3.3. Directive 2011/24/EU ... 17
5.3.3.1. Background and history of the Directive 2011/24/EU ... 17
5.3.3.2. Structure and features of the Directive 2011/24/EU ... 19
6. CROSS-BORDER SITUATIONS ... 21
6.2. Impact of EU legislation on cross-border healthcare ... 21
6.2.1. The relationship between Regulation 883/2004 and Directive 2011/24/EU ... 21
6.2.2. Effectiveness of healthcare under national and European provisions ... 24
6.3. Summary ... 27
7. DISCUSSION: A PROBLEM SOLVING APPROACH ... 30
7.1. Current initiatives by the Commission ... 30
7.2. Discussing a new European Health Care model ... 31
8. CONCLUSION ... 34 BIBLIOGRAPHY ... V
TABLE OF CASES ... VII TABLE OF SOURCES ... IX
Acknowledgments
To my family, whose effort and support made everything possible.
I also would like to acknowledge the support of my supervisor, Jaan Paju, whose advice and legal work have been a great source of inspiration.
Stockholm, May 2020
Abbreviations
CJEU, the Court Court of Justice of the European Union
EC European Communities
ECHR European Convention on Human Rights
ECtHR European Court of Human Rights
EU European Union
GKV Gesetzliche Krankenversicherung (statutory
health insurance in Germany)
TEU Treaty on the European Union
TFEU Treaty on the Functioning of the European
Union
MS Member States (in particular those of the EU)
‘Before there were doctors, we would only know health or death.’
Wilhelm von Humboldt, Prussian Scholar (1791)
1. Introduction
The health care sector usually belongs to most economically potent sectors in western democracies, especially within the EU.1 Moreover, its relationship to social security2 frequently gives grounds for ongoing public debates about functioning and financing as well as political fuel for change and revolution. Socio-economic developments in Member States call for constant change in the fields of social security and health care, demanding an adaptive system fit enough to tackle the challenges of the 21st century like the rise of chronic diseases, changes in age structure towards longevity and rising number of elderly, shifting in demographics through migration and cross-border services, as well as even pandemics.
But flexibility does not seem to be an issue of our social security and health care systems. For example, the German Social Code on Health Care (Sozialgesetzbuch V)3 has been changed more than 200 times since its entry into force in 1989.4 The Regulation 3/585 – the first somewhat successful of many attempts at coordinating social security – has been modified 14 times and its successor, Regulation 1408/716 even 39 times.7 The current coordination scheme, Regulation 883/20048 has already been amended six times. But in spite of all the efforts made we are currently far away from a seamless healthcare coverage within the EU which proves to be inherently problematic as intra-union migration is on the rise and more and more people make use of their right to free movement by either settling or picking up work in another member state.9 Health care within the EU seems to be stuck at a cross-road, lingering
1 For example, in 2018 the healthcare sector was responsible for roughly 12% of the GDP in Germany, see Federal Ministry of Health (Bundesgesundheitsministerium), Bedeutung der Gesundheitswirtschaft
(web source)
https://www.bundesgesundheitsministerium.de/themen/gesundheitswesen/gesundheitswirtsch aft/bedeutung-der-gesundheitswirtschaft.html <accessed 12 May 2020>
2 The original six member states of the Union all have health care system founded on the solidarity principle, based on the Bismarck tradition of social security.
3 Where not declared otherwise all translations from German and Swedish into the English language are made by the author.
4 Klaus Engelmann, Sozialgesetzbuch Fünftes Buch, Gesetzliche Krankenversicherung, vol 3 (Rainer Schlegel and Thomas Voelzke eds, 2016).
5 Regulation (EEC) No. 3 of 25 September 1958, OJ No. 3 of 16 December 1958.
6 Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, OJ L 149, 5.7.1971, p. 2-50.
7 Rob Cornelissen, ‘50 Years of European Social Security Coordination’ (2009) 11 European Journal of Social Security 9.
8 Regulation (EC) No 883/2004 of the European Parliament and the Council of 29 April 2004 on the coordination of social security systems, OJ L 166, 30.04.2004, p. 1.
9 The Commissions Annual Report on intra-EU labour mobility show that the number of ‘EU-28 movers’ increased by 3,4% compared to 2017, see European Commission, 2019 Annual Report on intra
EU labour mobility (web source)
https://ec.europa.eu/social/main.jsp?catId=89&furtherNews=yes&langId=en&newsId=9550
<accessed 25 April 2020>
between the influence of Member States and political actors trying to maintain the status quo while constant need for action and change driven by structural issues is leading to a growing demand for healthcare. This calls for a European solution as the presented issues can only be solved on a cooperative basis. Demographic change and technological progress are not concepts that even each other out but rather factors reinforcing each other in stretching the boundaries of healthcare.
In order to explain why the EU and its Member States are stuck, the social security schemes and regimes of the EU and of the Member States need to be analyzed.
However, for the purpose of brevity and precision this thesis shall limit its analysis to the two main EU legal instruments, the Regulation 883/2004 (Social Security Regulation) and the Directive 2011/24/EU10 (Patients’ Rights Directive) and their potential hindering effects. Relevant case law of the CJEU will play a vital role in the analysis, as well as national peculiarities of healthcare and social security systems. For the purpose of intensity and brevity, the focus regarding national systems shall concentrate on the Member States Sweden and Germany.
2. Research Questions
Analysing health care entitlements in EU law cannot solely be done from the perspective of EU law. This is, however, not for a lack of existence of Union law, the two regimes mentioned in the title are only some – albeit most important (among secondary law) – legal instruments regarding health care within Union. It is owed to the fact that it is the Member States’ sole right to determine the content of their own social security schemes.11 As the Court has clarified in a variety of judgments the regulations based on Article 51 EEC (now Article 48 TFEU) have only a limited objective12 and are not made to harmonise, but merely to coordinate social security systems of the member states. The Treaty’s legal basis for social coordination is limited to form measures which relate to the free movement of workers and it is impossible to base other measures such as realising a ‘social union’ on it.13 The EU legal system does
10 Directive 2011/24/EU of the European Parliament and the Council of 09 March 2011 on the application of patients’ rights in cross-border healthcare, OJ L 88, 4.4.2011, p. 45-65.
11 See Case C-110/79 Coonan EU:C:1980:112 para 15 and Case C-254/84 De Jong EU:C:1986:78 para 13.
12 Cases C-2/67 De Moor EU:C:1967:28 p. 204; C-9/67 Colditz EU:C:1967:30 p. 234; C-27/71 Keller EU:C:1971:105 para 13; C-140/73 Mancuso EU:C:1973:149 para 17; C-50/75 Massonet EU:C:1975:159 para 29; C-100/78 Rossi EU:C:1979:54 para 12; C-733/79 Laterza EU:C:1980:156 para 6, C-807/79 Gravina EU:C:1980:184 para 6; C-41/84 Pinna EU:C:1986:1 para 11; C-227/89 Rönfeldt EU:C:1991:52 para 12; C-165/91 Van Munster EU:C:1994:359 para 18; C-340/94 de Jaeck EU:C:1997:43 para 18; C- 221/95 Hervein EU:C:1997:47 para 16 and joined cases C-393/99 and C-394/99 Hervein & Lorthiosis EU:C:2002:182 para 50.
13 Frans Pennings, ‘Introduction: Regulation 883/2004 – The Third Coordination Regulation in a Row’
(2009) 11 European Journal of Social Security 3, 4.
not – and cannot – grant a universal entitlement to healthcare for its citizens because it lacks the competence to do so.14 This influences the research question by widening the scope, thus entailing the national perspective as well:
1) How do the Regulation 883/2004 and the Directive 2011/24/EU interact with each other in the field of cross-border health care?
2) Is there an accumulative effect to those regimes which essentially impacts outcomes in EU or national law?
3) Does the current situation need altering from the EU law makers in order to prevent or stop any form of hindering of goals recognized by Union law, especially the free movement of services or workers?
Concerning the EU legislation, the two regimes Directive 2011/24/EU (or patients’ rights directive) and Regulation 883/2004 (social security regulation) are necessarily to be assessed. A special focus is given to their correlating effects towards each other. For example the Directive remains unclear towards its relation to the Regulation [883/2004] and to healthcare under the Treaty provisions.15 Even the deliberations made in the Guidance Note of the Commission16 regarding the relationship of the Directive and the Regulation make no comments on the issue of two regimes being possibly applicable at the same time and matter.17 At this point lies the core of the issues that are to be discussed in this paper: the question of how the unclear relationship of two pieces of EU legislation can affect the outcome of (national) healthcare entitlement issues.
3. Limitations and outline
Keeping in mind that the scope of insurance claims and health care entitlements is governed by national law, analyzing the effects of health care on free movement requires that certain national provisions and pieces of legislation are to be assessed. As mentioned above, the analysis of national provisions shall focus on Sweden and Germany and their respective health care systems. Other systems will not be analysed
14 See Art. 48 and 168 TFEU.
15 Jaan Paju, Suveränitetserosion? Om EU-Rättens Påverkan På Nationella Sociala Trygghetsmodeller; Särskilt Sverige (2015) 309.
16 European Commission, Guidance note of the Commission services on the relationship between Regulations on the coordination of social security systems and Directive on the application of patients' rights in cross border healthcare, AC 246/12 EMPL/-/12-EN. https://tinyurl.com/umsk7yz <accessed 01 March 2020>
17 Paju (n 15) 314.
as a whole but will find mentioning through relevant CJEU case law. Especially with regards to putting issues of law into perspective the known principles of EU law will be taken into account as well.
As described above the main purpose of this thesis is to identify differences in treatment under the respective health care regimes in EU law and to examine how the differences in legal bases may affect the outcome on national level and how those affect goals that are recognized by Union law. Ultimately the question will be raised whether or not the differences show a potential hindering effect on the freedom of movement for workers and services. Whether or not this calls for action by EU or national law makers is part of a final assessment which follows the traditional legal principle de lege ferenda. This thesis shall not be stretched to an extent where it covers the overall health care systems of the member states in regard to a possible hindering effect on free movement. A coverage like that would exceed the page limit and make it simply impossible to go into the depth necessary for a legal academic analysis of the issues presented.
4. Methodology and approach
This Thesis in European Law requires research techniques that apply the methods known to the field. The challenge of dealing with rather broad topics – entailing social, constitutional and international law on national and international level – lies already in choosing the correct method to apply. A single, universally available methodological ius commune europaeum does not exist.18 For the purpose of this paper there is not one specific method that will be applied, but rather a combination of methods, for dealing with a multi-faced issue requires a multi-faced analysis of the material.
4.1. Traditional legal method
With regards to more broad and abstract tasks like analyzing and classifying principles and abstract legal issues, the traditional legal method will be applied, because it grants the possibility of creating an overview in order to answer abstract legal questions in the field of EU law.19 Traditional legal scholarship systematically organizes law in different domains and can be viewed as commenting on rules, case
18 Rob van Gestel and H Micklitz, ‘Revitalising Doctrinal Legal Research in Europe: What about Methodology?’ [2011] Social Indicators Research - SOC INDIC RES p 27.
19 Jan Smits, ‘What Is Legal Doctrine? On the Aims and Methods of Legal-Dogmatic Research’, SSRN Electronic Journal (2015) p 5.
law and developments in national and international jurisdictions.20 This approach will aid significantly in the task of putting national and international or European legal frameworks into coherence, organizing the different provisions and regimes. In traditional legal scholarship authoritative sources like legislation, case law and doctrinal literature are considered main sources of information.21 Analyzing these sources and reproducing the information gathered will be necessary when it comes to explaining the overarching system of healthcare that is to be analyzed throughout this thesis.
4.2. Comparative legal method
In order to better understand the outcomes of certain cases the social security systems of the EU, Sweden and Germany will briefly be studied. The assessment shall remain within the scope of the objectives provided in the Thesis and will not display a complete comparative analysis of the Member States’ social security systems.
However, to some extent such comparison will be necessary and in order to support this the comparative law method will be of use. Comparative law stands for a method of examining principles and rules originating in another legal order than the judge's own.22 The essence of that method is the act of comparing the law of one country to that of another.23 Comparative law is used to explain why there are different answers to (functional) equivalent legal questions and what the argumentation is behind those answers.24
4.3. Integrative methodological approach
As national law and EU law are very much intertwined it will at some point be necessary to set the comparative aspects aside – as they separate things from each other - and apply methods of integration, i.e. how the national perspective can fit into the scope of Union law. The separation of national and international law – or the integration; depending on the point of view – constitutes one of the biggest issues of EU law with a longstanding tradition. With the judgments delivered in Van Gend en Loos and Costa v. ENEL the Court stated early on that the EU legal order displays a new
20 Philip Langbroek and others, ‘Methodology of Legal Research: Challenges and Opportunities’ (2017) 13 Utrecht Law Review 1, 1.
21 ibid 2.
22 Koen Lenaerts, ‘Interlocking Legal Orders in the European Union and Comparative Law’ (2003) 52 International and Comparative Law Quarterly 873.
23 Edward J Eberle, ‘The Method and Role of Comparative Law’ (2009) 8 Washington University Global Studies Law Review 452.
24 van Gestel and Micklitz (n 18) 21.
legal order under which the member states gave up part of their sovereignty making Union law able to trump national provisions.25 The member states’ unwillingness to accept the supremacy of a foreign legal order expresses quite clearly in cases like Dansk Industri26 or – of course – the infamous Solange-saga27 by the German Constitutional Court (Bundesverfassungsgericht). Dealing with multi-level legal issues in different legal systems requires shifting the perspective towards a view where the national legal order is not trumped by its international ‘cousin’ but rather remains intact as an integrated vital part of the larger legal order. Reviewing the national law through an EU law perspective is also anchored in one of the general principles of EU law.28 5. Healthcare in the European Union
5.1. A short history of healthcare
Healthcare has a longstanding tradition in EU law. And this is not because it displays one of the Unions original goals, but rather because it is a necessary element to major goals like e.g. the internal market, for realizing the latter would require facilitating healthcare among EU workers and citizens since their status as a productive workforce is tied to their physical well-being. The freedom of movement would necessarily entail the right of social security29 and thus the EU law makers were forced to adjust and align the different systems in the member states in a manner that would not – or least - impair the movement of workers and their families throughout the union. This applies to health care issues as well, since many Member States’
systems are based on the Bismarck’sche Modell der Sozialversicherung30 – a German tradition where social security entails health care insurance.
While the scope of health care and insurance at first glance still belongs to the Member States, ever since the Maastricht Treaty’s entry into force31 more often than ever issues regarding public health fall within the scope of Union law. Subsequent
25 See Case C-26/62 Van Gend en Loos EU:C:1963:1 p. 7 and C-6/64 Costa v. ENEL EU:C:1964:66 p. 593.
26 Case C-441/14 Dansk Industri EU:C:2016:278.
27 See C-11/70 Internationale Handelsgesellschaft, EU:C:1970:114, for the German judgment see BVerfG v. 29.5.1974 – BvL 52/71, BVerfGE 37, 271, German version available at https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%2037,%20271 <accessed 06 March 2020>
28 See e.g. duty of consistent interpretation, Case C-282/10 Dominguez EU:C:2012:33
29 Catherine Barnard, The Substantive Law of the EU: The Four Freedoms (2019) 308.; See also Joined Cases C-286/82 and 26/83 Luisi and Carbone EU:C:1984:35 and Case C-159/90 SPUC v. Grogan EU:C:1991:378.
30 Otto von Bismarck, first Chancellor of the unified Germany, introduced social security for workers in 1883.
31 The 1991 Maastricht Treaty gave the Union new competences in public health and more scope for international cooperation; See European Parliament, Health Care Systems in the EU (research paper) https://www.europarl.europa.eu/workingpapers/saco/pdf/101_en.pdf <accessed Feb 2020>.
development in Treaty amendment and secondary law show clear signs of Union wide cooperation bordering on the harmonizing. But still the scope of the insurance claim abroad is governed by the respective national law. Although the Maastricht Treaty introduced competence for completing and coordinating the Member State’s health policies (Art. 129 EC, now Art. 151 and 153 TFEU), the Union itself lacks a specific competence for the matters described, for its competence is mostly confined within matters of public health.32
There were three major attempts to tackle social security coordination in the Union, the Regulation 3/58, its successor Regulation 1408/71 and its successor Regulation 883/2004. None of them arched to a final and fully satisfying result as their vast number of amendments show.33 In its first decision concerning Regulation 3/58 the Court felt it was necessary to emphasize that the legal basis for social security coordination in force at the time, Art. 42 EC (now Art. 48 TFEU), was placed in Title III of the Treaty which concerned the ‘free movement of persons, services and capital’.34 Thus it became clear that coordination was to be viewed in relation to the internal market and its provisions on free movement of workers. And the measures adopted on the basis of that article must relate to the freedom of movement for workers but cannot be used to realize a ’social Europe’. They have to prevent the rules of social security from impeding free movement.35 The Court’s willingness to give preferential treatment to the freedom of movement was already visible early on.
5.2. Healthcare from a national perspective
Understanding the legal issues presented requires a profound knowledge of national social law in its constitutional and public law context as well as an advanced legal understanding of the EU legislation on social security. Addressing these issues requires at first to take a look at the different healthcare systems of the two member states at hand, Sweden and Germany. Sweden implemented the Patients’ Rights Directive with the Reimbursement Act (ersättningslag)36. Together with the Health Care Act (hälso- och sjukvårdslag)37 it displays the national regime regarding cross-border healthcare. However, both pieces of legislation remain unclear on the question what
32 Paju (n 15) 289.
33 Cornelissen (n 7) 9.
34 C-75/62 Unger.
35 Pennings (n 13) 4.
36 Lag (2013:513) om ersättning för kostnader till följd av vård i ett annat land inom Europeiska ekonomiska samarbetsområdet
37 Lag (2017:30)
exactly is covered when seeking care abroad.38 In 2005 Sweden started to implement a national healthcare guarantee (nationella vårdgaranti) which is now a part of both the Health Care and the Patients Act (patientlag)39. The Swedish health care system cannot be considered a one-for-all insurance apparatus but rather a decentralized system, which is governed by local authorities and financed through a municipal tax.40 Since the system is decentralized and run by the 21 different counties of Sweden it might even occur that the care received differs depending on which county is responsible for the patient. And when the health care differs intra-state this situation even worsens when discussing intra-Union issues.
This issue applies to Germany as well. In Germany – as in any other of the original six Union member states - the healthcare system is a vital and inseparable part of the massive social security apparatus.41 Within this apparatus lies a system of over 100 statutory health insurance companies all combined under one roof.42 However, the overarching institution, the Gesundheitsfond, is merely more than a financial trust, collecting and allocating money from and to the insurance bodies. The statutory insurance companies remain independent in their decisions, having only to obey the guidelines of the Gemeinsamer Bundesausschuss, a council consisting of political, medical and civil representatives.43
The German laws on statutory health care are confined in the Fifth Book of the Social Code of the Federal Republic (Fünftes Buch Sozialgesetzbuch or SGB V44). The laws regarding private insurance are to be found in the Insurance Contract Act (Versicherungsvertragsgesetz or VVG45). Relevant legislation may also be the Act on Benefits for Employees of the State46 (Beihilfeordnungen des Bundes und der Länder). With regards to the Swedish system the Healthcare Act (hälso- och sjukvårdslag), the Patients Act (patientlag),the Reimbursement Act (ersättningslag) and the Municipal Tax Act (kommunalskattelag) are of notable importance. Throughout this thesis attention shall
38 Paju (n 15) 310.
39 Lag (2014:821)
40 See § 3 Healthcare Act (1982:763) and § 1 Municipal Tax Act (1928:370)
41 Paju (n 15) 291.
42 GKV Spitzenverband, Die gesetzlichen Krankenkassen (web source) https://www.gkv- spitzenverband.de/krankenversicherung/kv_grundprinzipien/alle_gesetzlichen_krankenkassen/
alle_gesetzlichen_krankenkassen.jsp <accessed 13 April 2020>.
43 Gemeinsamer Bundesausschuss, Aufgabe und Arbeitsweise (web source) https://www.g- ba.de/ueber-den-gba/aufgabe-arbeitsweise/ <accessed 13 April 2020>
44 Dpt. of Justice of the Federal Republic of Germany, Sozialgesetzbuch V (websource) https://www.gesetze-im-internet.de/sgb_5/ <accessed Feb 2020>.
45 Dpt. of Justice of the Federal Republic of Germany, Versicherungsvertragsgesetz (websource) https://www.gesetze-im-internet.de/vvg_2008/ <accessed Feb 2020>.
46 Dpt. of Justice of the Federal Republic of Germany, Bundesbeihilfeverordnung (websource) https://www.gesetze-im-internet.de/bbhv/ <accessed Feb 2020>.
also be given to the two healthcare regimes of the European Union, the Social Security Regulation and the Patients’ Rights Directive. While examining their effects and outcome the relevant case law of the Court of Justice needs be taken into account
5.3. EU healthcare legislation 5.3.1. Treaty based healthcare
The origins of cross-border healthcare are not to be found in some piece of legislation, for healthcare was not an original goal of the Communities and initially healthcare was actually not thought of as even containing a cross-border element.47 As matter of fact, one seminal change in the development of cross-border healthcare did not happen through a regulation or a directive but – as it often happens in EU law – through the case law of the Court.
With the decisions made in the Kohll and in the Decker cases48 the Court caused a bit of a stir by stating that healthcare – even statutory - was within the limits of the free movement provisions thereby granting it a special level of protection under the Treaties.49 The decision staged major uproar among EU lawyers and politicians as it claims the existence of a possibility for cross-border healthcare parallel to the Coordination Regulation 1408/71.50 The rules of coordination were to be supplemented in the eyes of the Court by something that can best be described as healthcare based on Treaty provisions, or ‘Treaty care’ (fördragsvård) as Paju so aptly described it.51 In the judgements regarding two Luxembourg families seeking reimbursement for prescribed spectacles and respectively dental care trying to circumvent the authorization requirement the Court held that the conditions of the authorization requirement of the Coordination Regulation proved to be inconsistent with Treaty provisions.
In particular the Court stated that the coordination article in question was not intended to regulate, and therefore did not prohibit the reimbursement by Member States of costs following from a treatment provided in another Member State at the tariffs in force in the competent state, even where prior authorization was not sought or granted.52 Therefore the question remained, whether the disputed national rules
47 Paju (n 15) 291.
48 C-158/96 Kohll EU:C:1998:171; C-120/95 Decker EU:C:1998:167
49 Paju (n 15) 294.
50 Jaan Paju, ‘Sagan Om Patientrörligheten – När Politiken Vinner Över Juridiken; En Pyrrhusseger?’
2010 Europarättslig tidskrift 227.
51 Paju (n 15).
52 C-158/96 Kohll EU:C:1998:171 para 27; C-120/95 Decker EU:C:1998:167 para 29.
were consistent with the Treaty provisions regarding the freedom to provide services or goods. Answering this question required examining whether or not the disputed rules constituted a restriction on that freedom and if so, whether the restriction could be objectively justified. In the decision the Court held that healthcare was indeed subject to the Treaty provision as it constituted a service within the meaning of the Treaty and was to be considered an economic good.53
The judgments delivered in Kohll and Decker were of course revelations as they broke ground for a new way of receiving cross-border healthcare within the Union.
Not only could citizens seek reimbursement for treatments under the rules of the Coordination Regulation, now it was also possible to claim that right directly from Treaty provisions. Obviously this decision led to a lot of disapproval among lawyers, politicians and member states. For the latter originally held that cross-border healthcare was fully covered by the Regulation and could therefore – following the legal theory of lex specialis derogat legi generali not be viewed from a primarily law perspective.54 The Court however - even before the seminal judgements in 1998 - maintained a stance that was all too friendly for citizens and patients seeking medical attention abroad and continued its course throughout numerous cases. For example in 1984 in the Case Luisi & Carbone55 the Court already stated that healthcare was to be considered a service (within the meaning of the Treat[y]) in cross-border situations. In the Geraets-Smits & Peerboms56 case the Court held that the obtained medical care displays a service in the meaning of the Treaties – regardless whether the patient or the national health care system paid for the treatment. The Court further argued that a requirement for prior authorization by the Member States’ healthcare systems can be justified by the possible risk of seriously undermining the financial balance of the social security system if this constitutes and overriding reason of general interest capable of justifying a barrier to the freedom to provide services within the meaning of the Treaties.57 Article 56 TFEU allows Member States to restrict freedom to provide medical services on its territory if this is within the interest of public health.58
53 Frans Pennings, ‘The Cross-Border Health Care Directive: More Free Movement for Citizens and More Coherent EU Law?’ (2011) 4 European Journal of Social Security 424, 431.
54 Paju (n 15) 288.
55 Joined Cases C-286/82 and C-26/83 Luisi and Carbone EU:C:1984:35 para 16.
56 Case C-157/99 Geraets-Smits & Peerbooms EU:C:2001:404.
57 Case C-157/99 Geraets-Smits & Peerbooms EU:C:2001:404 para 72; C-158/96 Kohll EU:C:1998:171 para
58 Case C-157/99 Geraets-Smits & Peerbooms EU:C:2001:404 para 74; C-158/96 Kohll EU:C:1998:171 para 41.
51.
With the judgement delivered in Müller-Fauré & Van Riet59 the Court set requirements for member states’ insurance systems demanding a permission before obtaining healthcare abroad. In particular, the Court held that in cases where the national institution is refusing the authorization for the treatment, they might only do so if the specific circumstances attached to the patient were taken into account.
Again when the question was raised whether medical care was subject to the free movement of services provision (ex Art. 49 EC now Art. 56 TFEU) in the Watts60 judgement the Court made clear that medical services, as they are being paid for, constitute an economic activity within the meaning of the Treaties, regardless of who is paying for them, opening up the existing rules on reimbursement and freedom of medical services for cases involving the British National Healthcare System (NHS).61 Since the door of one economic activity was opened it was difficult to close it just for one system.62 Furthermore, the Court made some clarification in regard to possible refusal of authorization of cross-border treatments. One of them being that in their decisions, the respective bodies or states may not disregard European Union law. 63 All authorization processes must easily be accessible and must ensure that the request for authorization will be handled in an objective and impartial manner. Refusals must be challengeable in a judicial or at least quasi-judicial manner and within the refusal the proper reason and the specific provisions that it is based upon must be referred to.64
Authorization may only be refused when the same, or an equally effective, treatment can be obtained without undue delay.65 The meaning of this term was clarified in the Müller-Fauré & Van Riet66 judgement and was described as follows. First, the Court set an example by stating that a refusal to grant prior authorization that is essentially based not on the fear of wastage resulting from hospital overcapacity, but solely on the ground that there are existing waiting lists, constitutes an unjustified restriction.67 Instead it should be of essence to take into account the specific circumstances attached to a patient’s medical condition. National bodies and authorities are required to consider every relevant aspect of each specific case and they
59 Case C-385/99 Müller Fauré & Van Riet EU:C:2003:270
60 C-372/04 Watts EU:C:2006:325.
61 Ibid para 90.
62 Julio Cruz, ‘The Case Law of the European Court of Justice on the Mobility of Patients: An Assessment’ in Johan Willem van de Gronden and others (eds), Health Care and EU law (TMC Asser Press 2011) 81.
63 Pennings (n 52) 434.
64 Ibid; also C-372/04 Watts EU:C:2006:325 para 116.
65 Pennings (n 52) 434.
66 See n 46.
67 See n 46 para 92; See also Pennings (n 52) 434.
need to take due account of the patient’s health condition at the time the authorization is sought, which includes, where appropriate, level of pain, nature of the patient’s disability and his overall medical history.68
The Court also ruled (in numerous decisions) that the EU provisions on free movement are applicable regardless of national health care rules.69 Also the Court held that patients may seek healthcare abroad even with private healthcare providers – where the national healthcare system denies paying for private providers. For the free movement provisions are not applicable intra-state, but become applicable when the patient moves abroad.70
With the presented series of judgement that started the Treaty-based healthcare the Court put itself in a difficult position, having to defend their view of the legal situation to Member States trying to maintain the integrity of their social security system and keeping their social security apparatus from overflowing with claims. The free movement provisions needed to be weighed against the Member States’ right to determine the specifics of their own national healthcare systems, i.e. independency of national legislation versus applicability of EU primary law. When discussing this issue a certain battle for supremacy automatically comes to mind, namely the infamous
‘Solange’-saga of the German Constitutional Court.71 But other Cases like Dansk Industri seem to have relevance in this matter. Both cases entailed the question of supremacy of EU law over national (constitutional) law and in both cases the national constitutional court remained on a stance of independency towards the EU legal order.
Issues of competences keep surfacing in the particular field of social security, which might have its origin in the fact that the EU is constrained by its Treaty bases, meaning that its powers itself are very limited and regarding healthcare its competences not only lack a certain degree of democratic legitimation, the measures taken in this field seem distorted by the requirement that it operates on the basis of internal market, social security and other Treaty bases.72 The above mentioned supremacy issue the German Constitutional Court had with previous Court decisions were never really resolved. Because one of the more recent decisions the Bundesverfassungsgericht
68 ibid.
69 Paju (n 50) 228.
70 ibid.
71 See Case C-11/70 Internationale Handelsgesellschaft EU:C:1970:114; Case C-69/85 Wünsche Handelsgesellschaft EU:C:1986:104; for the judgements by the Bundesverfassungsgericht see BVerfGE 37, 271 and BVerfGE 73, 339.
72 Scott Greer and Bart Vanhercke, ‘The Hard Politics of Soft Law: The Case of Health’ in Elias Mossialos and others, Health Systems Governance in Europe: The Role of European Union Law and Policy (Cambridge University Press 2010) 190.
adopted in this area73 seemed to be merely a proposal of a truce and the promise to lay down their weapons as long the Court and the Union do not give any reason to do otherwise.74 And in the most recent decision, the Bundesverfassungsgericht reacting on the Weiss judgement by the Court75 held that the decisions of the ECB on Public Sector Purchase Programme exceed EU competences, thus rendering the Courts judgment ultra vires.76 The ramifications and impacts on the healthcare and social security sector are yet to be awaited.
5.3.2. Regulation 883/2004
5.3.2.1. A need for a third coordinating Regulation?
The coordination of social security has a longstanding tradition in EU law, as the history of the three major regulations and their amendments show. Adapting to major changes and revelations in social and judicial developments, including the several hundred judgements by the CJEU regarding the coordination regulation it thus became necessary to harmonize, enhance and optimize EU law in this field as the implementation of the coordination regime became lengthy and complicated.77 And so in order to bring social security coordination into the 21st century the Regulation EC No 883/200478 (henceforth ‘the Regulation’) was adopted, setting out to clarify issues of understanding which ensued through the various cases that landed in front of the Court. Some of these cases were already discussed in the sections above and it was necessary to consider some of the changes made by the Court in the text of the new Regulation. However, this is not what happened, at least not to the extent some wished for, because the case law existing at the point of time where the text of Regulation was formed, seemed to have little impact on said process. Or, as Cornelissen put it, ‘it is regrettable that the case law of the Court on cross-border health care, based on the Treaty provisions on the free movement of goods and on the freedom to provide
73 The so called Maastricht decision („Solange III“) by the German Constitutional Court: BVerfGE 89, 155, See German version at; https://www.servat.unibe.ch/dfr/bv089155.html <accessed 19 April 2020>
74 Kevin D Makowski, ‘Solange III: The German Federal Constitutional Court’s Decision on Accession to the Maastricht Treaty on European Union’ (1995) 16 University of Pennsylvania Journal of International Law 157.
75 Case C-493/17 Weiss and others, EU:C:2018:1000.
76 BVerfG, Judgment of the Second Senate of 05 May 2020 - 2 BvR 859/15 -, para 116, see English version at: http://www.bverfg.de/e/rs20200505_2bvr085915en.html <accessed 24 May 2020>
77 International Labor Organization, Coordination of Social Security Systems in the European Union, ILO 2010 (web source) https://www.ilo.org/wcmsp5/groups/public/---europe/---ro-geneva/---sro- budapest/documents/publication/wcms_166995.pdf <accessed 18 April 2020>
78 Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ L 166, 30.4.2004, p.1), available at https://eur- lex.europa.eu/eli/reg/2004/883/2014-01-01 <accessed 26 April 2020>
services, has not been reflected in the text of the new Regulation 883/2004.’79 For example, when the chapter regarding sickness benefits was negotiated in the Council in 2002, some Member States expressed their concern as to the fact that the existing case law on the matter at that time did not concern their national systems.80 According to Cornelissen there lied a missed opportunity and in 2009 he already saw that there likely will be two legal instruments dealing with cross-border healthcare81, which is obviously ironic as the original legislative attempt (the Regulation) set out to simplify the provisions and clarify questions, ergo untangling a mess, instead of keeping on tying more and more knots.
5.3.2.2. Structure and features of the ‘new Regulation’
As healthcare normally being a part of the social security system82, the Coordination Regulation 883/2004 lays down some ground rules for cross-border situation without extensively covering the subject. Chapter 1 on sickness, maternity and paternity benefits, in particular Art. 17 to 20 cover the cross-border healthcare situations. The Regulation distinguishes between situations where the insured person stays inside and outside the competent Member States (Art. 18 and 19) and travelling abroad for the purpose of receiving benefits – like reimbursement for treatments (Art.
20).
Obtaining necessary medical care while staying outside the competent MS is governed by Art. 19 of the Regulation. The provision entails situations where a person’s condition requires benefits in kind which become necessary on medical grounds while the person is situated on the territory on a member state other than the competent state. The application of this provision (Art. 19) is generally not problematic, since the provisions mostly covers cases where short-term emergency becomes necessary, i.e. cases where no procedures of great length and intensity that display large monetary burdens. However, there are some uncertainties regarding the interpretation of necessary medical care.83 For each Member State’s healthcare system might have a differing understanding of the term ‘necessary on medical grounds’ and even within the national systems there might be discrepancies. For example, all healthcare providers in Germany apply the definition of ‘medical necessity’ that has
79 Cornelissen (n 7) 42.
80 Ibid.
81 Ibid.
82 See n 1
83 See OJ 2010, C 106.
been established by the Federal Social Security Court; however private healthcare providers may use a different definition since they are not bound by law to the rulings of that court.84 Another problem is that healthcare providers do not always know of or how to apply said rules.85
If applicable, Art. 19 entitles the patient to benefits in kind from the institution of the stay, e.g. visit to local doctor, hospital stay or ambulance transport. An authorization requirement by the competent state is not necessary within the scope of Art 19. The necessary care shall be granted to the patient no matter what.86 The institution granting the benefit (e.g. delivering the treatment) is bound to the rules and provisions it administers as if the patient would be insured in that state. Ergo, the rules of reimbursement and cost sharing are that one of the place of stay. That means that the state of affiliation – or the relevant institution – need not reimburse the patient for cost sharing if the cost sharing was the usual proceedings in the state of stay, even if the state of affiliation does not require cost sharing in their own system.87 This procedure differs from the rules regarding planned care but it does not contravene the Treaty provision of (now) Article 56 (freedom to provide services) of the TFEU.88
Art. 20 of the Regulation deals with cases where a person goes abroad for the purpose of receiving benefits in that state. At this point the Regulation gets stricter because Art. 20 does not primarily handle cases of emergency care, ergo care that must be given, but rather care that can eventually be given abroad because it might be better for the patient or it might occur on account of the national system which is not able anymore to grant the benefit in question, therefore sending the patient to another state.
In Art. 20 (2) it is provided that an insured person may be authorized by the institution of the competent state to seek appropriate medical treatment for his/her condition in another state. If the authorization is granted the person becomes entitled to receiving benefits in kind on behalf of the competent state in the state of stay. The treatment is provided under the rules of the state of stay, as if the person was insured in that state.
The expenses of the treatment are borne by the competent state which reimburses the state of stay through direct payment, so the patient does not have to advance the cost.89 Obviously, the authorization requirement only concerns the reimbursement in the case
84 See para 27 SGB V (Social Code Book Five), para 5 NBhVO (Lower Saxony State-Employed Benefits Act) or para 6 BBhVO (Federal Benefits Act for State-Employed)
85 Pennings (n 52) 427.
86 As to the interpretation who should decide whether medical care is necessary see e.g. Case C-145/03 Keller EU:C:2005:211 para 63.
87 Pennings (n 52) 427.
88 See Case C-211/08 Commission v. Spain EU:C:2010:340; ibid.
89 ibid 428.
that expenses for treatment occur. Patients are entitled to seek medical care abroad if they wish, they just have to bear the cost if they do not ask for permission or if the permission was denied by the competent institution. However, according to the judgement delivered in the Vanbraekel case, should the institution deny the request wrongfully, this entitles the patient to be reimbursed by his competent institution at the rate equivalent to what he/she ordinarily would have gotten if the authorization would have been granted in the first place. 90
The issue with planned care is that Member States, fearing the possibility of higher rates outside their territory, often are reluctant to grant the permission sought.91 But also quality assurances are problematic in this particular area. If the competent Member State grants authorization for treatment, they lose the possibility of controlling the procedure, the quality and the costs of the treatment. A popular reason for patients to seek care abroad are – apart from waiting time – that the treatment in question might not yet be available in the home state. This is however not always beneficial as the country which approves a treatment earlier might not have gathered enough experience with the procedure. The authorization requirement can be beneficial when it is used to assure that the patient receives the best possible treatment in time. However, it constitutes a great burden on patients who need the treatment fast and whose authorization request takes an unbearable amount of time. This significantly affects the willingness of patients to seek care abroad. Although modern information technologies and intermediaries such as care brokers have been facilitating patients’ mobility greatly during the past years, figures show that the public expenditure on healthcare only contains small amounts of expenses for treatments sought in another Member State.92 And one main reason for this, is that the rules of cross-border healthcare are confusing and not generally known to patients. A survey from 2007 showed that roughly 70 per cent of Union citizens were aware of the fact that under the current EU legislation they are entitled to receive medical treatment and reimbursement for treatment conducted in another Member State.93 Whereas the remaining 30 per cent were either unaware or under the false impression that it would be impossible to receive care abroad and get reimbursed.94 This is a missed
90 Case C-368/98 Vanbraekel EU:C:2001:400 para 34.
91 Pennings (n 52) 428.
92 ibid.
93 The Gallup Organization, Flash Eurobarometer No 210 – Cross-border healthcare in the EU, (web source) 2007, available at https://ec.europa.eu/commfrontoffice/publicopinion/flash/fl_210_en.pdf
<accessed 26 April 2020>
94 Ibid. p. 6
opportunity, because granting healthcare – even for large and expensive – treatments abroad may also have the effect of removing pressure from national health care providers and are positive for the patients as it may reduce waiting time and therefore in general influence the overall health of the people in a member state. This rather unsatisfying situation emphasizes the need for new development in cross-border healthcare. And after the failed attempt95 at equipping the 2006 Services Directive96 with a chapter on patient’s rights the Commission started a consultation process for a new directive.97
Regardless of previously mentioned case law it can be stated that a permission to seek cross-border health care in line with Reg 883/2004 entails only such care that is being granted within the respective national health care system. A permission according to 883/2004 entails that the insured person does not need to pay for the treatment.98 Where the Member State’s system does not work with the permission system it is up to the patient whether or not he wants to carry the risk of an insufficient or non-existent reimbursement, a situation that can be viewed as an impairment to the free movement provisions.99
5.3.3. Directive 2011/24/EU
5.3.3.1. Background and history of the Directive 2011/24/EU
Since the Regulation 883/2004 made very little regards to the existing CJEU case law at the time reflecting the situation concerning the free movement provisions, it was foreseeable that another legislative attempt would have been made. Like Cornelissen predicted: ‘it is now likely that we will have to face the coexistence of two legal instruments regarding cross-border healthcare.’100 The history of a proposal for a new Directive began long before it was ever published, since a proposal on cross- border healthcare was already included in the Draft Services Directive101, but was later on left out.102
95 Pennings (n 52) 425.
96 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ L 376, 27.12.2006, p. 36–68) available at https://eur- lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32006L0123 <accessed 26 April 2020>
97 Paju (n 50) 230.
98 Paju (n 15) 302.
99 Paju (n 50) 229; Paju (n 15) 302.
100 Cornelissen (n 7) 42.
101 See COM (2004) 2: Proposal for a Directive of the European Parliament and of the Council on services in the internal market [SEC(2004)21], https://eur-lex.europa.eu/procedure/EN/188810 <accessed 20 April 2020>
102 Pennings (n 52) 425.
In order to settle on how healthcare issues should be handled on community level the Commission initiated a consultation process in the fall of 2006.103 The consultations showed that the Member States principally agreed on the fact that there was a need to clarify which rules were applicable when seeking care abroad. The Commission then developed a draft Directive on Patients mobility104 based on the existent codified legal practice, enhancing patients’ rights through facilitating the availability of information regarding healthcare in other Member States and establishing national points of contact where patients could gather information and get help regarding their rights.105 The Commission even proposed enhanced cooperation between the Member States in several departments such as mutual recognition of prescriptions, establishing a reference network between specialized caregivers and cooperation concerning testing of new clinical methods.106
Because the case law of the Court of Justice107 interpreted Treaty provisions as requiring such reimbursement in cases where Regulation 883/2004 did not, a need for legal certainty regarding the cost of cross border healthcare arose.108 Moreover, the general situation of legal certainty needed to be improved as the subjects to and the operators of cross-border healthcare provisions, i.e. administrative bodies and patients, had it difficult knowing exactly what the applicable rights according the current healthcare regime consisting of Regulation, Treaty provisions and CJEU case law were. And thus on 9 March 2011, Directive 2011/24/EU of the European Parliament and of the Council on the application of patients’ rights in cross-border healthcare (henceforth ‘the Directive’) was adopted.109
The Directive shows the long and dreadful way to legislation, which originated already in the Services Directive which originally was thought of entailing cross- border healthcare110 and underwent several seminal changes from the original Commission draft during the negotiations within the Council, especially during the Czech Council presidency in 2009.111 And also the European Parliament contributed a
103 Paju (n 50) 230.
104 COM/2008/0414, https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52008PC0414
<accessed 20 April 2020>
105 Paju (n 50) 230.
106 ibid.
107 See among others Case C-158/96 Kohll and Case C-120/95 Decker
108 Pennings (n 52) 424.
109 Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare (OJ L 88, 4.4.2011, p. 45–65), available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32011L0024 <accessed 26 April 2020>
110 Paju (n 15) 308.
111 Paju (n 50) 231.
considerable amount of amendments (122) to the Draft Directive, of which many made their way into the final version.112
5.3.3.2. Structure and features of the Directive 2011/24/EU
The Directive itself shows a larger a grasp that any previous legislation – like the Regulation 883/2004 - or Court judgement, introducing cooperation in health care matters and others.113 The Directive was intended out to codify the legal practice regarding cross-border healthcare, but it does not itself present new provisions. It does however build certain bridges to other relevant legal instruments in terms of definitions. However, its relation to the Regulation and to health care under the Treaty provisions remains unclear.114
As opposed to what was laid down in Article 2 of the proposal115, the Directive now employs a narrower definition of healthcare, defining the term through health services that are provided by health professionals to patients in order to assess, maintain or restore their state of health, including the prescription, dispensation and provision of medicinal products and medical devices.116 The Commission proposal envisaged that the Directive would apply to the provision of healthcare (in general) regardless of how it is organized, structured or financed.117
Concerning the scope of the Directive it explicitly rules out long-term medical care, vaccination programmes and organ transplants. The scope also greatly differs from the Commission’s proposal which originally intended to leave out nothing. It seems that in the final version the Member States’ desire for sovereignty with regards to healthcare applications that might affect the financial balance (such as long-term care) or the overall public health (e.g. vaccination and organ transplants) of the Member States has prevailed.
The Directive does not introduce a new general prior authorization system, it barely seeks to regulate existing systems in Member States.118 Article 8 of the Directive sets the baseline for prior authorization by demanding that the system, including the
112 Pennings (n 52) 437.
113 Paju (n 15) 309.
114 ibid.
115 Proposal for a Directive on the application of patients’ rights in cross-border healthcare, COM/2008/0414, https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52008PC0414
<accessed 20 April 2020>
116 See Article 3 of Directive 2011/24/EU.
117 See Article 2 of the Commission’s proposal of the Directive, COM/2008/0414, https://eur- lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52008PC0414 <accessed 27 April 2020>
118 Pennings (n 52) 439.
criteria, the application of those criteria, and individual decisions of refusal to grant prior authorisation, shall be restricted to what is necessary and proportionate in regards to the objective that is to be achieved. Also the system and its criteria may not constitute a means of arbitrary discrimination or an unjustified obstacle to the free movement of patients. Also, Member States must make all information for the prior authorization requirement scheme publicly available.119 At this part of the Directive the influence of the Court is clearly visible, as the Court made the conditions for authorization requirements already clear in its case law prior to the Directive.120 For example, in the Elchinov judgement121 the Court held that Member States – while they are free to determine the specifics of their own social security system – cannot disregard Union law in the exercise of their powers. The conditions for an authorization requirement must not exceed what is necessary in order to achieve its purpose and it is required that the same result cannot be achieved by a less restrictive measure. Also the system must be based on objective non-discriminatory criteria which are known in advance.122 But there are more signs of the impact of case law in the directive. In Art. 8 (5) the Directive lays down rules for situations where the prior authorization may not be refused by the competent institution namely when ‘the health care cannot be provided on its territory within a time limit which is medically justifiable, based on an objective medical assessment of the patient’s medical condition, the history and probable course of the patient’s illness, the degree of the patient’s pain, and/or the nature of the patient’s disability at the time when the request for authorization was made or renewed.’ The argumentation seen here also follows the ruling the Court gave in Müller-Fauré & Van Riet. Mirroring the provision found in the Watts123 judgement by the Court, Art. 7 (6) of the Directive lays down criteria for cost calculation of cross-border healthcare, requiring Member States to employ a transparent mechanism based on objective non-discriminatory criteria that are known in advance.
Art. 7 (8) of the Directive forbids Member States from employing prior authorization schemes with exception to those cases laid down in Art. 8 of the Directive. However, Art. 7 (9) allows Member States to limit the application of reimbursement rules if this aids an overriding reason of public interest, such as
119 ibid.
120 See for example Case C-385/99 Müller Fauré & Van Riet EU:C:2003:270.
121 Case C-173/09 Elchinov EU:C:2010:581
122 Case C-173/09 Elchinov EU:C:2010:581 para 2;
123 Paju (n 50) 230.
