## Facts

- The case concerned the compatibility of UK rules on National Health Service (NHS) reimbursement for healthcare received in another EU Member State with Article 56 of the Treaty on the Functioning of the European Union (TFEU), which guarantees the free movement of services.
- Ms. Watts sought medical treatment in another EU Member State and requested reimbursement from the NHS for those services.
- UK authorities had a requirement for prior authorization before NHS patients could receive treatment abroad and be eligible for reimbursement.
- The case involved the consideration of how national health systems may restrict or allow such reimbursements, particularly with respect to the organization and financing of national healthcare services.

## Issues

1. Whether a requirement for prior authorization by a national health system for NHS patients seeking treatment abroad is compatible with Article 56 TFEU on the free movement of services.
2. What conditions must apply to ensure that such prior authorization schemes do not constitute unjustified obstacles to the free movement of services.
3. How considerations of national budgetary management and clinical need should influence the assessment of requests for prior authorization and reimbursement.

## Decision

- The Court held that prior authorization schemes for cross-border healthcare may be justified based on the need to maintain a balanced, financially viable national health service.
- Such schemes must not be discriminatory and must apply objective, non-discriminatory criteria related to the patient's medical condition and treatment.
- Decisions on prior authorization must be timely; undue delay in the process constitutes an unjustified restriction under Article 56 TFEU.
- Member States must grant prior authorization for treatment abroad if equivalent treatment is not available domestically or not available within a reasonable time given the patient's condition.
- Member States retain the competence to organize and finance their healthcare systems, but this power cannot be exercised in a manner that infringes the Treaty rights of patients.

## Legal Principles

- Restrictions on the free movement of services, such as those imposed by prior authorization for cross-border healthcare, must be justified by overriding reasons of public interest, such as financial balance of the health service.
- Any prior authorization scheme must be based on objective, non-discriminatory criteria and must guarantee that individual circumstances, such as clinical need and domestic treatment availability, are adequately considered.
- Undue delay in authorization decisions may constitute an unlawful obstacle to the free movement of services.
- The rights guaranteed by Article 56 TFEU apply to healthcare services, and Member State healthcare financing competence must be exercised compatibly with these rights.

## Conclusion

The ECJ in Watts established that while Member States may require prior authorization for patients seeking healthcare abroad at the expense of national systems, such schemes must be transparent, objective, non-discriminatory, and ensure timely decisions, balancing the organization of national health services with the EU principles of free movement of services.

Watts v Secretary of State for Health (Case C-372/04) [2006] ECR I-4325