Setting the record straight
Do Spanish hospitals or private collection agencies have a right to recoup the cost of medical care provided to tourists in possession of a European Health Insurance Card (EHIC) from international insurers? Spanish lawyer María González says, emphatically: ¡no!
Do Spanish hospitals or private collection agencies have a right to recoup the cost of medical care provided to tourists in possession of a European Health Insurance Card (EHIC) from international insurers? Spanish lawyer María González says, emphatically: ¡no!
To put it bluntly, the Spanish national healthcare system is in dire straits. Budgetary cuts for public hospitals are the order of the day. Therefore, it is hardly surprising that cash-strapped hospitals are resorting to any means in order to try and alleviate their financial situation. One such method is to twist the clear intent of European Community (EC) law and force private insurers to pay for medical care provided to foreigners in spite of them having an EHIC.
Deficit tangle
In a bid to resolve their budget deficits, hospitals have outsourced the handling of their bills to private collection agencies. Such agencies derive a hefty ‘cut’ from cashed invoices. It is no wonder, therefore, that such agencies are extremely aggressive when it comes to the collection of ‘alleged’ debts. Such vested interest in the successful collection of hospital invoices results in a strongly biased interpretation of EC law and Spanish law. Of course, such interpretation is not in the interest of the private insurers.
In a nutshell, the collection agencies’ argument runs as follows:
Article 83 of the ‘Ley General de Sanidad’ (General Healthcare Act) obliges a hospital to charge health expenses to the third parties obliged to pay. Since a private insurer providing healthcare coverage is obliged to pay out in accordance with its policy limitations, according to article 83 it appears to be a reasonable third party from which a hospital can claim its expenses back. Furthermore, since this Spanish legal provision does not make a distinction between ‘Spanish’ and ‘foreign’ third parties, there is no discrimination contrary to EC law and, particularly, it is in conformity with Article Four (Equality of Treatment) of EC Regulation 883/2004 on the Co-ordination of Social Security Systems. Additionally, it might be considered a free ride for the insurer if it wasn’t expected to pay for its policyholders’ treatment once it had collected premiums to cover such contingencies, and it would clearly be unfair for the Spanish public hospitals to bear such a cost.
Well, on initial consideration, this sounds impressive. Spanish law forces public hospitals to ‘find’ the ‘third party’ obliged to pay. If the tourist is in possession of a private insurance, then the insurer is supposed to foot the bill. But such reasoning is completely wrong.
First of all, the ‘third party obliged to pay’ is not the private insurer, but the social security institution of the country of residence of the tourist. Article 19 of EC Regulation 883/2004 states that: “An insured person and the members of his family staying in a Member State other than the competent Member State shall be entitled to the benefits in kind which become necessary on medical grounds during their stay, taking into account the nature of the benefits and the expected length of the stay. These benefits shall be provided on behalf of the competent institution by the institution of the place of stay, in accordance with the provisions of the legislation it applies, as though the persons concerned were insured under the said legislation.”
Furthermore, Article 35 of EC Regulation 883/2004 clearly states: “The benefits in kind provided by the institution of a Member State on behalf of the institution of another Member State under this Chapter shall give rise to full reimbursement.”
the ‘third party obliged to pay’ exists and it is not the private insurer, but the social security institution of the country of residence of the tourist
Thus, from the combined reading of Articles 19 and 35 of EC Regulation 883/2004, we can conclude that:
Spanish public hospitals are obliged by EC law (i.e. under EHIC) to provide medical services to tourists. The wording is clear; it is not facultative for Spanish hospitals but mandatory.
Such services are provided on behalf of the competent institution (that is on behalf of the British, German, Dutch, etc. social security institution of the patient being treated). Hence, the medical services are not provided on behalf of the tourist or her/his private insurer. The services are provided on behalf of the social security institution where the tourist lives. Thus, the ‘debtor’ is the ‘competent institution’.
The Spanish social security system has the right to be reimbursed from the competent institution and the competent institution is obliged to pay.
Thus, the ‘third party obliged to pay’ alluded to by Article 83 of the Spanish General Healthcare Act, exists: it is the social security institution of the tourist’s country of residence. If s/he is British, it will be the ‘Overseas Healthcare Team’, if s/he is a German, then it will be the ‘Deutsche Verbindungsstelle Krankenversicherung – Ausland’ (DVKA) and so forth.
In this vein, it is important to note that providing medical care to tourists in possession of the EHIC is not a burden on the stretched finances of the Spanish social security system. In other words, if the private insurer is removed from the picture, no harm results for the Spanish system. There is a clearly defined ‘debtor’ (the competent institution of the land of residence) and this debtor, by dint of Articles 19 and 35 of EC Regulation 883/2004, must pay.
Therefore, all the arguments about the unfairness of a situation whereby the private insurer would not be summoned to pay are without merit. Furthermore, forcing a private insurer to pay as a ‘first recourse’ payer is not neutral since it may increase the premium cost when renewing the insurance.
Since we have proven that the provision of medical services to tourists in possession of an EHIC is not detrimental to the Spanish social security system, why then the current onslaught on private insurers? The answer is clear: the reimbursement procedure laid down by Regulation 883/2004 (and also Regulation 987/2009) takes time, effort and does not directly benefit the hospital concerned. The money recouped by the Spanish social security (the so called ‘INSS’ – Instituto Nacional de la Seguridad Social) is allotted between the Spanish regions without directly benefiting the hospitals concerned with the treatment of relatively high numbers of tourists.
The core of the matter is this: the attempt of private collection agencies to force private insurers to reimburse medical costs is a misguided shortcut to circumvent the procedure established by EC law. It is as simple as that. It is a shortcut, albeit illegal, to quickly replenish empty vaults. It is much easier to obtain cash from private insurers by threatening them with litigation than following the straight and narrow path set forth by EC law.
the attempt of private collection agencies to force private insurers to reimburse medical costs is a misguided shortcut to circumvent the procedure established by EC law
In addition to this, and whilst we cannot always generalise, we know of some instances where apparently ‘inflated’ invoices have been submitted by a collection agency. In other words, the invoices presented to the private insurers did not correspond with the official published prices for medical services. By marking up the invoice, the collection agency makes sure that its services are also paid for by the insurer. This is, of course, both unethical and illegitimate.
It goes without saying that there are many more grounds (both based on EC and Spanish law) that advocate against the right of Spanish hospitals and private collection agencies to recoup costs from private insurers. We have merely revealed the tip of the iceberg.
Application of the law
It also goes without saying that depending on the specific general clauses and conditions, in some instances, the private insurer may be liable to pay. The Spanish healthcare system does not include dental care, specific medicines, etc., and in such instances, the private insurer might be summoned to pay. Furthermore, when Spanish law establishes, in the near future, new co-payment rules, then the private insurer might be obliged to pay the part of the medical service that is no longer provided for free. But such payments will be minor (i.e. €10 per doctor appointment) and many tourists probably wouldn’t bother to claim once they have realised that their excess exceeds the value of the claim. Another exception would be a tourist in Spain that is not insured within the framework of the social security system in his/her home country. But such cases are rare.
A final question comes to the fore: What if the tourist has forgotten or lost her/his EHIC? Article 25 of EC Regulation 987/2009 comes to our help and establishes the obligation of the country of stay to directly contact the competent institution (country of residence) to obtain a copy (even a faxed or emailed one) of the EHIC or any document evidencing the right to obtain healthcare in the country of residence. Therefore, Article 25 sets forth a specific obligation of activity of the country of stay. The country of stay, in our case Spain, may not simply dismiss a tourist and bill her/his private insurer because s/he happens not to have the EHIC at hand. An even greater illegality would be if, in spite of showing the EHIC, the card is ignored in order to charge the private insurer.
What to do if the private insurer has already paid in the past to a collection agency? Are such payments recoverable? Or are such payments lost for good? Such payments may be recouped since there was no legal basis for their exaction in the first place and Spanish law establishes that such payments are to be given back to the rightful owner – the insurer.