As hospitals and health systems brace for another year of financial pressure, regulatory audits and shifting reimbursement models, many are beginning to recognize that one of their most underused levers for resilience lies in an often-overlooked asset: contracts.
Labor shortages continue, Medicare and Medicaid reimbursement cuts are reshaping budgets, and tariffs and material costs are rewriting supplier agreements. While many providers experiment with AI in patient-facing use cases, few apply AI where it could deliver substantial impact – simplifying physician contracting, strengthening supply chain performance, optimizing payer agreements and improving compliance confidence.
Contracts govern every dollar that flows through a health system, yet most remain static PDFs in digital filing cabinets. Uncertainty about AI’s role in contracting continues to hold providers back from unlocking millions in efficiency, minimizing risk and protecting margins. As 2026 approaches, separating myth from reality will help healthcare providers deploy AI where it matters most.
Myth 1: AI replaces humans
AI is often viewed as a threat to the human element of healthcare, but in contracting, it strengthens – not replaces – the people who make critical decisions. Countless hours are spent searching for clauses, verifying obligations and updating templates. AI automates those repetitive tasks, freeing the hospital’s payer contracting, legal and compliance, and finance teams to focus on strategic priorities like negotiation strategy, risk analysis and alignment with clinical and operational goals.
With contract intelligence, hospitals can automatically surface key provisions, like escalation caps or rebate terms across thousands of agreements. AI augments expertise and accelerates decision-making without losing the human judgment that healthcare depends on.
Myth 2: Healthcare already uses AI
AI adoption is widespread – 80 percent of health systems use it in some form, often through tools like ChatGPT, AI transcription or chatbots. Yet these cases barely scratch the surface of AI’s potential. Most hospitals rely on shared drives and spreadsheets to track supplier and payer agreements, leaving value untapped and compliance risks unmonitored.
Unlike generic tools that merely extract or summarize information, AI with enterprise-grade integrations, advanced analytics and automated workflows can materially improve key provider KPIs– shortening contracting cycle times, reducing revenue leakage and strengthening compliance performance.
Myth 3: AI is too expensive or complex
The perception that AI is costly or difficult to implement prevents the adoption of solutions that deliver measurable value faster.
Modern AI platforms integrate with existing ERP and EHR systems to deliver results without large upfront investments or disruption. Healthcare-focused contract intelligence with pre-configured templates, deep analytics and obligation management capabilities helps hospitals shorten physician onboarding times, optimize payer contracting and improve compliance with government regulations – proving AI is practical, not prohibitive.
Myth 4: AI creates risk
Another common misconception is that adopting AI invites new risks or weakens regulatory control. In reality, AI strengthens compliance by embedding governance into contracting processes. As mandates around CMS, 340B drug-discount programs and HIPAA privacy rules continue to evolve rapidly, AI helps providers remain accountable and data-driven to keep pace with regulatory change.
AI-powered contract intelligence also delivers real-time visibility into regulatory obligations, enabling hospitals to monitor compliance across thousands of contracts simultaneously. Through automation, providers can proactively maintain audit readiness, reinforcing trust with regulators, partners and patients.
Myth 5: AI doesn’t deliver results
Skeptics may argue that AI healthcare is more hype than substance. But hospitals adopting purpose-built, enterprise-grade AI are already proving otherwise. For example, Stanford Medicine used Icertis to modernize contracting and projects $11.6 million in savings through AI-powered contract intelligence.
With labor costs consuming more than half of total expenses and the medical cost trend climbing to nearly nine percent, every dollar truly matters. By centralizing supplier agreements and using AI to identify cost-sensitive terms, hospitals can enforce escalation caps, link pricing to market indices and execute mass amendments when conditions change. AI gives providers visibility across their supplier base to anticipate risk, strengthen vendor accountability and manage cost volatility proactively.
The bottom line for healthcare providers
As 2026 approaches, hospitals face a paradox: they are investing heavily in innovation but overlooking the full impact that AI can deliver to their organization. Dispelling myths about AI in contracting is the first step toward addressing this gap.
In an era of enduring volatility, AI isn’t just transforming how hospitals manage contracts – it’s redefining how they create value and lead with confidence in the future of healthcare.
Learn more about how Icertis helps healthcare providers realize value with AI-powered contracts here.
