This article centralizes around the use of risk averse approaches to appraise the intangible assets of a medical practice in comparison with the regulatory environment when considering the alignment of exempt hospitals and physicians. Different forms of alignment and integration have arisen rapidly within the healthcare industry, especially involving acquisition of physician practices and subsequent employment of physicians by hospitals. This is motivated by the concern over rising healthcare costs and general condition of the economy. Along with the increase in physician employment by hospitals has come enhanced regulatory scrutiny. Valuation of both tangible and intangible assets is necessary but the article’s focus is on the intangible asset of physician practices known as trained and assembled physician workforce in place or TAWF. The underlying concepts discussed around TAWF can be applied to other intangible assets, as well. Also discussed, are the issues with healthcare valuation among legal professional communities over the past few years. The author goes onto explain human capital related intangibles, which includes TAWF. Economic concepts related to the relationship between tangible and intangible assets to the value of an entire physician practice enterprise depicted through Bonbright’s text is explained, as well. The next concept in the article is that of the intangible asset goodwill. It’s explained from both accounting and financial economics perspectives. Standard of value is then defined and the various types are given: fair market value, fair value market value, investment (strategic) value, and fundamental (or intrinsic) value. The author then goes on to say that value in use is the premise of value that assumes the assets will continue to be used as part of an ongoing business enterprise producing an economic benefit of ownership of a going concern. Highest and best use is said to be use among possible alternatives which is legally permissible, socially acceptable, physically possible and financially feasible resulting in the highest economic return. Values in exchange and the existence of any particular asset in a valuation is dependent on the facts and circumstances of that particular appraisal. Cost-based valuation methods are told from the rationale that a prudent investor would pay no more for a fungible intangible than the cost that would be incurred to replace the subject with a substitute of comparable utility or functionality. The article states this method can be relied on to an extent but just not exclusively. The recent surge in exempt hospital/physician practice transactions coincides with an increase in OIG review and an overall heightened amount of regulatory scrutiny. Legislation such as the Anti-Kickback Statute, Stark’s Law and Internal Revenue Code are all related to this. The conclusion ends with restating that the new forms of alignment of organizations has caused some confusion regarding valuation of TAWF as an intangible asset of a physician practice and that the cost based method is acceptable under the value in exchange premise to appraise fair market value of TAWF of a physician practice being acquired by a tax exempt hospital.