Your pharmacy has been offered a contract with Express Scripts, the nation’s largest pharmacy benefit manager. There is just one requirement that stops many applicants cold: a $500,000 surety bond. Without it, you cannot join their network. This guide covers everything you need to know—the exact bond amount, surety rating requirements, costs, application process, and how to get approved even with less than perfect credit.
What Is an Express Scripts Surety Bond?
An Express Scripts Surety Bond is a $500,000 performance bond required by Express Scripts, the largest pharmacy benefit manager in the United States, for pharmacies that wish to participate in their network. The bond guarantees that the pharmacy will adhere to all provisions of the contract and serves as a financial guarantee against potential exposures that Express Scripts assumes with regards to medical plan sponsors.
The bond is a three-party agreement between:
- Principal: The pharmacy (must purchase the bond)
- Obligee: Express Scripts (requires the bond)
- Surety: The company issuing the bond (must meet Express Scripts’ rating requirements)
If a pharmacy violates the terms of its contract, Express Scripts has the right to file a claim against the bond. If the surety determines the claim is valid, it will make payment to Express Scripts. The pharmacy is then legally obligated to reimburse the surety for the amount of the claim.
Who Needs an Express Scripts Surety Bond?
| Required | Not Required |
|---|---|
| Independent pharmacies joining Express Scripts network | Pharmacies not contracting with Express Scripts |
| Pharmacies providing home delivery medications | Retail-only pharmacies not in network |
| Manufacturers and distributors contracting with Express Scripts | Other PBM network participants (different requirements) |
Key Requirements for the Bond
| Requirement | Specification |
|---|---|
| Bond amount | $500,000 |
| Minimum duration | 2 years (continuous) |
| Surety A.M. Best rating | A-VII or better (some sources say A-VIII) |
| NCPDP number | Required before applying |
| Initial account setup | ESIProvider.com |
How Much Does an Express Scripts Surety Bond Cost?
The premium you pay is a percentage of the $500,000 bond amount. Factors affecting your rate include credit score, business financials, and owners’ financial strength.
| Credit Profile | Premium Rate | Annual Cost (on $500,000) |
|---|---|---|
| Excellent credit (750+) | 1% | $5,000 |
| Good credit | 2-5% | $10,000 – $25,000 |
| Average credit | 5-7% | $25,000 – $35,000 |
| Challenged credit | 7-10% | $35,000 – $50,000 |
Important note: The bond must be maintained for a minimum of two years, so factor the total two-year cost into your business planning.
Documents Required for Application
Before applying for an Express Scripts surety bond, gather the following documents:
- Commercial Surety Application
- Owner’s Personal Financial Statement
- Pharmacy Applicant’s Current Business Financial Statement
- NCPDP number
- Owner’s resume or business experience summary (some sureties require this)
How to Get an Express Scripts Surety Bond
The process follows four simple steps, and specialists like Swiftbonds have placed these bonds for pharmacies nationwide, working with A.M. Best A-rated sureties that meet Express Scripts’ strict requirements. Here is how it works:
- Apply: Complete a surety bond application along with a personal financial statement and current business financial statement. Your NCPDP number is required.
- Quote: Within hours, the surety returns a premium quote based on your credit profile and financial strength.
- Pay: You pay the annual premium via credit card, ACH, or wire transfer.
- File: The surety issues the bond, and you file it with Express Scripts as part of your credentialing process.
Swiftbonds LLC
2025 Surety Bond Technology Provider of the Year
4901 W. 136th Street
Leawood KS 66224
(913) 214-8344
https://swiftbonds.com/
Surety Company Requirements
Express Scripts is strict about which surety companies they accept. Your bond must come from a surety with:
- An A.M. Best rating of A-VII or better (some sources specify A-VIII)
- Treasury-listed status (acceptable surety on the U.S. Treasury Department’s list)
- Financial strength and stability to back a $500,000 obligation
This requirement eliminates many smaller or regional surety companies. Only larger, well-capitalized sureties qualify, which can limit competition but also ensures the bond will be accepted without question.
What the Bond Covers
The Express Scripts surety bond serves as a financial guarantee that the bonded pharmacy will:
- Adhere to all provisions of the Express Scripts provider contract
- Comply with all regulatory requirements set forth by Express Scripts
- Perform home delivery services according to agreed terms
- Avoid mismanagement or fraudulent activities
- Protect Express Scripts and medical plan sponsors from financial losses due to pharmacy default or non-compliance
What Does NOT Trigger a Bond Claim?
Not every contract dispute leads to a bond claim. The bond is typically not triggered by:
- Minor administrative errors corrected in a timely manner
- Billing disputes resolved through normal channels
- Performance issues that are cured within cure periods specified in the contract
However, any material breach of the provider agreement could result in a claim.
Frequently Asked Questions
Q: Why does Express Scripts require a $500,000 bond?
The bond serves as a financial guarantee to protect Express Scripts and the medical plan sponsors from potential losses due to non-compliance, mismanagement, pharmacy default, or fraudulent activities by the pharmacy.
Q: How long must I maintain the bond?
The bond must run continuously for a minimum of two years. Upon expiration, Express Scripts may waive the bond requirement or require a replacement bond.
Q: What A.M. Best rating does my surety need?
Express Scripts requires the surety company to have an A.M. Best rating of A-VII or better. Some sources specify A-VIII, so confirm with Express Scripts directly.
Q: Can I get this bond with bad credit?
Yes, but you will pay a higher premium. Some sureties specialize in challenged credit and are willing to write Express Scripts bonds for applicants with less than perfect credit.
Q: What happens if Express Scripts files a claim against my bond?
If a claim is filed and the surety determines it is valid, the surety pays Express Scripts. You are then legally obligated to reimburse the surety for the full amount of the claim.
Q: Where do I start the credentialing process?
Create an initial account at ESIProvider.com. You will need your NCPDP number. Questions can be emailed to PharmacyContracts@express-scripts.com.
Q: Is this bond required by federal or state law?
This is a contractual requirement from Express Scripts, not a federal or state law. However, it is mandatory for network participation.
Q: Can Express Scripts waive the bond requirement after two years?
Yes. Upon expiration of the initial two-year obligation, Express Scripts has the discretion to waive the bond requirement entirely for compliant pharmacies.
Q: Does the bond cover me if I make an honest mistake?
The bond is designed to protect Express Scripts, not the pharmacy. If Express Scripts suffers a financial loss due to your actions (even unintentional), they can still file a claim. Your best protection is strict compliance with your provider agreement.
Q: How quickly can I get this bond?
Bond approval can take 1-2 business days once your application and financial statements are submitted. Some sureties offer expedited processing for an additional fee.
5 Interesting Things About Express Scripts Surety Bonds Not in the Top 10 Sites
- Express Scripts is the largest PBM in the United States. The company processes prescriptions for over 100 million people annually. This massive scale is why the bond requirement is so high compared to other PBM network bonds.
- The A.M. Best rating requirement (A-VII or A-VIII) eliminates many smaller surety companies. Only larger, well-capitalized sureties qualify, which can limit competition and affect pricing for pharmacies seeking this bond.
- Unlike many surety bonds, the Express Scripts bond has no statutory cap on claims. While the bond amount is $500,000, multiple claims can be filed up to the full penal sum each time, subject to aggregate limits in the bond language.
- The bond requirement was not always in place. According to industry sources, Express Scripts implemented this requirement relatively recently, catching some established network pharmacies off guard when their contracts came up for renewal.
- Express Scripts may waive the bond requirement after two years. Upon expiration of the initial obligation, Express Scripts has the discretion to waive the bond requirement entirely for compliant pharmacies—a significant incentive for maintaining flawless contract performance.
Conclusion
An Express Scripts Surety Bond is a $500,000 performance bond required for any pharmacy wishing to contract with Express Scripts, the nation’s largest pharmacy benefit manager. The bond must be issued by a surety with an A.M. Best rating of A-VII or better and maintained continuously for at least two years. Premiums typically range from 1% to 10% of the bond amount ($5,000 to $50,000 annually), depending on credit and financial strength.
Before applying, ensure you have your NCPDP number, complete financial statements, and contact Express Scripts through ESIProvider.com to begin the credentialing process. The bond is filed as part of your provider agreement, and once approved, your pharmacy can begin participating in the Express Scripts home delivery network.
Leave a Reply