Mr Peerbooms, who is of Netherlands nationality, fell into a coma following a road accident. He received special intensive therapy in an Austrian clinic, which proved beneficial. Mr Peerbooms did not satisfy the requirements for admission to two Netherlands establishments offering the same medical technique on an experimental basis (as this technique was available in the Netherlands only to persons under the age of 25 years). Mr Peerbooms was also refused reimbursement by his Netherlands sickness insurance fund of the costs incurred, since, according to the authority dealing with his claim, the treatment given to the comatose patient in Austria had no advantage over the treatment available in the Netherlands.

Under the Netherlands social security legislation, a patient can receive medical treatment, either in the Netherlands or abroad, at an establishment which has not entered into agreement with his sickness insurance fund only after obtaining prior authorisation.

The Netherlands court hearing the disputes between the persons concerned and their sickness insurance funds has asked the Court of Justice whether legislation of that type is compatible with the principle of freedom to provide services.

The Court observes that Member States are free to organise their social security systems. In the absence of harmonisation at Community level, it is for the legislation of each Member State to determine the conditions concerning the right or duty to be insured with a social security scheme and the conditions for entitlement to benefits.

Nevertheless, the Member States must comply with Community law and in particular with the principle of freedom to provide services. Medical activities, even taking into consideration the particular nature of the services concerned (benefits in kind, for which the hospital establishment is paid by the fund with which the person concerned is insured), do indeed fall within the scope of freedom to provide services.

The Court then considers whether the effect of the rules in question is to restrict freedom to provide services. By subjecting reimbursement of costs to authorisation, which is granted only where two conditions are satisfied (the treatment must be regarded as normal in the professional circles concerned; and the treatment abroad must be necessary), the rules in question constitute an obstacle to freedom to provide services.

Is there any justification for that obstacle?

The Court recalls that a risk of seriously undermining a social system's financial balance and the maintenance of a balanced medical and hospital service open to all constitute financial and public-health requirements capable of justifying an obstacle to freedom to provide services.

In the Court's view, the need to have resort to a system of prior authorisation, in the context of a system of agreements to provide health care, makes it possible to ensure that there is sufficient and permanent access to a balanced range of high-quality hospital treatment on the national territory, to ensure that costs are controlled and to prevent any wastage of financial, technical and human resources. None the less, any conditions, such as those applied in the Netherlands, which must be satisfied in order to obtain prior authorisation must be justified and must satisfy the principle of proportionality.

Thus, the condition that the proposed hospital treatment in another Member State must be regarded as normal is acceptable only in so far as it refers to what is sufficiently tried and tested by international medical science.

The second condition, namely the necessity of the proposed treatment, that is to say the requirement that the insured person receive treatment in a foreign establishment owing to his medical state, must mean that authorisation can be refused only if the patient can receive the same or equally effective treatment without undue delay from an establishment with which his sickness insurance fund has contractual arrangements.

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