Remember Blockbuster Late Fees? It’s Time for Accountability in Prior Authorization

Remember Blockbuster’s late fees? If you didn’t return a video on time, you paid a fee. Why? Because your  actions made that video unavailable to someone else. Restaurants, beauty salons, and dental offices have similar policies. If you reserve a resource and fail to use it—or cancel too late for someone else to use it—you may be held financially responsible.

So, what about insurance companies?

Last August, I wrote a hopeful editorial about the possible end to the war of attrition between physicians and insurance companies over prior authorization. Alas, it continues, despite dozens of insurance companies signing a six-part pledge in June 2025 to reduce barriers to provider-recommended care, the passage of the Reducing Medically Unnecessary Delays in Care Act of 2025, and the finalization of the Interoperability and Prior Authorization Final Rule by the Centers for Medicare and Medicaid Services (CMS).

When an insurer fails to approve medically necessary care before the day of surgery after physicians and hospitals have submitted all required documentation according to the insurer’s policies, the consequences are substantial. Operating rooms sit empty. Nurses, surgeons, anesthesiologists, and support staff are idle. Another patient who could have received care loses that opportunity.

Who is financially responsible for that lost resource?

A recent KFF Health News article about the efforts to reform prior authorization quoted an America’s Health Insurance Plans (the national trade association representing the health insurance industry in the U.S.) spokesperson as saying, “Prior authorization is a vital patient safeguard.” Safeguard from whom? This statement implies that physicians, as a group, must be prevented from providing unnecessary or harmful care. Certainly, there are bad actors in every profession, but physicians take the Hippocratic Oath, which is grounded in a fundamental principle: First, do no harm. Perhaps those making decisions that delay or deny patient care should be held to the same standard.

The dysfunction extends beyond delayed authorizations.

Recently, our precertification team was told by an insurer that prior authorization was not required for a patient’s procedure. After surgery, the claim was denied—solely because prior authorization had not been obtained. The patient began receiving bills and understandably called our office. Only after additional intervention did the insurer acknowledge that the claim had been processed incorrectly and overturn their denial of the facility fees. The physician fees remained pending.

In another case, a patient’s surgery received prior authorization, only to be denied by the same insurance company afterward because the procedure supposedly was not covered by the patient’s plan. The patient’s plan had not changed between authorization and surgery.

Then there is January.

Every year, we experience a rash of cancellations in early January because of lack of precertification despite the patients having been on the surgical schedule for months. Insurance policies reset on January 1, so according to our precertification team, everything must be resubmitted at the start of the year. The precertification team works overtime to get all of the cases submitted, yet approvals frequently do not arrive before surgeries scheduled during the first weeks of the year. If this is simply an annual policy renewal, why shouldn’t insurers honor authorizations obtained in December? Otherwise, perhaps operating rooms should shutter for the first two weeks of January and send insurers the bill for the lost capacity.

Because, ultimately, this is about more than lost revenue.

The patient is the human being who needs the recommended care. The patient took time off work, arranged childcare, organized transportation, and planned for recovery. The patient lives with continued symptoms when surgery is canceled. And the patient receives frightening bills when previously authorized care is retroactively denied.

If hospitals and physicians are held accountable for access, utilization, efficiency, and patient experience, insurers should be as well.

When an insurer’s failure to act or its own error causes a preventable cancellation or an inappropriate denial, perhaps it is time for the insurance company to pay the late fee.   

—Robin