Surety Bonds: An Added Financial Burden for Pharmacy in the Future?

Tom Modeen
8,476 0 0

Express Scripts Requiring Some Pharmacies to Post Surety Bonds: 2017

As has been reported, the Medicare Task Force recently announced groundbreaking indictments of 412 individuals involved in illegal healthcare scams totaling 1.3 billion dollars in fraudulent billing. That fraud has brought about consequences for honest providers requiring them to purchase surety bonds. Reporting on the indictments can be found here:

Unfortunately, this has led to government agencies and private insurance companies to identify geographical “hot spots” where fraud is most likely to occur.

Fraud not only undermines our healthcare system and the citizens it serves, but penalizes honest providers, as well.

Shot Across the Bow


In response, the first “shot across the bow” aimed at providers comes with Express Scripts’ announcement it will require some pharmacies to post surety bonds for enrollment. No one is quite sure how “some” providers will be defined, but it will certainly effect those in “hot spot” areas.

Surety Bonds Defined

Surety (also referred to as performance bonds) are purchased by the service provider that guarantee fulfillment of the obligations of a contract to the agreement of both parties.  Obviously, fraud would never be agreed upon by two parties. In this case, Express Scripts is spreading that risk and fiduciary responsibility to numerous providers in pinpoint locations.

The Sins of the Few Effect the Many!

In the announcement, Express Scripts with be requiring a $ 500,000 surety bond policy that will be a minimum of Suretytwo years’ duration. In some provider cases, this may be extended beyond the mandatory two-year period. Such bonds can be both difficult to obtain, require legal assistance and can exceed $ 15,000. In cost.  No pun intended, but this is certainly a bitter pill to swallow for already strapped pharmacy providers.

Here are some additional details on the announcement:

Regrettably. “One-Sided” Fits All for Pharmacy

The business and profession of pharmacy has been under siege for far too long and the challenges continue to mount. SuretyDownward pressure from insurance company reimbursements are accompanied by upward pressure in medication costs and rising overhead. Certainty in the financial wellness of the pharmacy business is further clouded by the rise in DIR fees, which represented another curve ball lobbed at the pharmacy provider. For more on DIR Fees, please refer to:

Ethical Equilibrium

SuretyIt’s time to reach an ethical equilibrium between insurance companies and pharmacy providers alike to underscore the critical contribution that community makes to the patients it serves. This is long overdue.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.