What to Know

• AI can make FMV processes more efficient, but professional judgment remains firmly human.
• The greatest opportunities for AI lie in supporting the valuation process, not performing the valuation itself.
• As organizations adopt AI, the technology can create new FMV considerations beyond the valuation process itself.

Healthcare organizations are increasingly looking for ways to incorporate AI into provider compensation design, valuation, and administration workflows, but enthusiasm for the technology is outpacing clarity about where it can safely and compliantly be used. That tension is especially relevant to fair market value (FMV) assessments, where efficiency cannot come at the expense of professional judgment.

Recent findings from a survey conducted at the American Association of Provider Compensation Professionals’ annual conference underscore the growing demand for AI-enabled solutions¹. Survey respondents were particularly interested in using AI to model new compensation plans, perform contract review and FMV assessments, and automate monthly close processes.

That demand reinforces the need to distinguish between applications where AI can strengthen provider compensation processes and those where its role should be limited.

Putting AI in Perspective: The FMV Context

Despite the high demand for incorporating AI into FMV assessments, these tools lack the foundational elements that underpin credible valuation: professional judgment, transparency, and replicability. Provider compensation appraisers are held to professional standards requiring credible, transparent analyses based on reputable data, relevant expertise, and the facts and circumstances of a specific engagement. In contrast, AI generates results based on probabilities and cannot replace or replicate the appraiser’s judgment or accountability.

The Appraisal Foundation and the International Valuation Standards Council have made it clear that using automated processes, such as automated valuation models (AVMs), to perform valuations without further applying professional judgment does not produce compliant valuation opinions. These tools may be used as a basis for a compliant valuation-but only if the appraiser also exercises their professional judgment and believes the output is credible for the specific engagement. (Importantly, AVMs should not be confused with deterministic FMV calculators, which apply valuation techniques based on the appraiser’s own professional judgment and are considered defensible FMV opinions.)

While AVMs and similar AI tools may be used in developing a valuation, these tools cannot be relied on to produce valuations that comply with professional standards.

Where AI Can Add Value

The limits of AI in FMV don’t diminish its potential value. Rather, they help define where the technology can be most effectively applied. When used thoughtfully and appropriately, AI can help increase efficiency within FMV processes by supporting:

• Centralizing inputs (i.e., data sources utilized for FMV analyses)
• Sourcing, cleaning, and formatting data
• Augmenting analytical tasks previously done manually (e.g., market benchmarking, compensation modeling, document development)
• Supporting compliance monitoring
• Sequencing and prioritizing task flow

These applications can position AI as an evolution of the FMV process rather than a revolution, improving how the work gets done without changing who is responsible for the valuation itself.

Risks and Additional Considerations

The FMV implications of AI extend beyond how the technology is used in the valuation process. As organizations introduce AI into clinical and administrative workflows, they also need to consider whether such tools are being provided to physicians and other referral sources.

Making AI tools available to physicians at no cost or below market value may be considered a form of remuneration that implicates fraud and abuse laws and regulations. Organizations should therefore consider not only how AI is used, but whether providing access to the technology creates value that must be assessed and documented.

Guardrails and the Future State

Whether AI solutions are being introduced to boost clinical efficiency or strengthen the FMV process, effective governance is the safeguard to protect the integrity and regulatory alignment of compensation decisions. To ensure regulatory compliance, healthcare organizations should:

• Analyze the value of the AI tools provided to physicians, such as ambient scribes, clinical decision support software, and automated medical billing and coding software, under FMV standards and document this assessment along with related requirements.
• Establish clear rules for how AI is used, how outputs are reviewed, and what responsibilities remain exclusively human.
• Clearly document how AI-supported steps fit into the broader FMV workflow to protect the integrity of the valuation and support consistent decision making.

The future state of valuation is a human-led, AI-enabled environment. While AI improves speed, organization, and access to information, valuators remain solely accountable for the reasoning, methodology, and final opinion.

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1. What 64 Provider-Comp Leaders Said: A Report from AAPCP 2026.