Wall Street Journal, Politico, Washington Post have all been covering the shake-up in senior management at HHS - here. Chris Klomp rises to #2 at HHS.
Which gives extra importance to a one-hour interview that Paragon Institute posted just a few weeks ago.
- Find the text here,
- the YouTube archive here.
- He's interviewed by Brian Blase, President of Paragon Institute, and policymaker Demetrios Kouzakas.
Here's an AI article based on the interview transcript. [Chat GPT 5.4]
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Chris Klomp’s Policy Playbook:
Markets, Incentives, and the Power to Convene at CMS
In a wide-ranging Paragon interview, new HHS deputy Chris Klomp outlines a Medicare strategy built on incentives, market signals, and stakeholder convening rather than regulation, offering insight into emerging federal health policy direction. (January 27, 2026).
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The sudden elevation of Chris Klomp to the de facto number-two management role at HHS makes a late-January Paragon interview more interesting than it might have seemed at the time. In recent days, the Wall Street Journal and Washington Post reported that the White House tightened control over HHS, elevated Klomp, and gave him broad responsibility for operations, coordination, and message discipline across the department. Paragon’s January 27 event therefore reads, in retrospect, less like a routine policy seminar and more like an early statement of management philosophy from a figure whose influence has now clearly expanded.
The event itself was a conversation between Klomp, then already heading the Center for Medicare, and Demetrios Kouzoukas, who had held that job in the first Trump administration.
Paragon framed the discussion around incentives, competition, and fiscal sustainability in Medicare. That summary is accurate, but it undersells how revealing the interview was. Klomp was not speaking in the cautious, narrow style of a caretaker program manager. He was speaking as someone with a broad theory of how government should behave: use formal regulation when necessary, but whenever possible use government’s power to convene, align incentives, reduce mistrust, and move markets rather than merely issue commands.
A striking feature of the interview was Klomp’s tone toward the career staff at CMS. In a period when Washington rhetoric often defaults to attacks on the bureaucracy, he instead went out of his way to praise civil servants as knowledgeable, hardworking, and indispensable. That was not a throwaway courtesy. It fits with later reporting that he has cultivated a reputation as an operational fixer and a manager who solicits feedback from staff rather than simply dictating from above. In policy terms, that matters: someone trying to move quickly inside Medicare cannot do much without the trust of the people who actually know the machinery. [BQ: See, "Who is Government," book by Michael Lewis, 2025].
From there, the interview turned to what Klomp regarded as the major accomplishments of 2025. The list was familiar but still notable: efforts to strengthen the Part A trust fund, advance site-neutral payment, reduce low-value spending, continue telehealth flexibilities, support primary care, and streamline quality measurement. Paragon’s summary also highlighted his claim that reforms to skin substitute payments would save on the order of $20 billion annually, which he presented as a vivid example of correcting distortions created by Medicare’s own payment rules. The deeper point was not any one payment reform. It was that Klomp sees Medicare as a vast system full of arbitrage opportunities created by administered pricing, and he appears intent on chipping away at them one by one.
The most distinctive policy theme in the interview was Klomp’s emphasis on convening power as a third instrument of government, alongside legislation and regulation. He argued that rulemaking is slow, litigation-prone, and often too blunt. By contrast, when stakeholders actually share many of the same incentives but distrust one another, government can create faster progress by bringing them together.
He applied that framework first to prior authorization. Paragon’s write-up highlighted his goal that 80% of codes still requiring prior authorization be resolved in real time, and outside reporting in early 2026 likewise described the administration’s push for most prior-auth determinations to be adjudicated rapidly at the point of care.
In Klomp’s telling, prior auth is not just a payer-versus-provider fight; it is a trust problem among parties who all, in principle, want appropriate utilization and fewer useless delays.
Whether one agrees with that diagnosis or not, it is a revealing one. Klomp’s style is not to deny conflict, but to recast it as a problem of misaligned incentives plus institutional mistrust. That same structure appeared again when he discussed most-favored-nation drug pricing. In the interview, he defended the administration’s MFN approach as a fairness policy rather than a classic price-control regime, arguing that companies remain free to set launch prices but should not charge Americans more than similarly situated patients abroad. The Washington Post separately reported that Klomp gained stature inside the administration in part through his work on drug-price negotiations, and that Trump came to regard him as one of the administration’s most effective health-policy operators.
The interview became especially interesting when Kouzoukas pressed him on a deceptively simple question: Does Medicare pay too much or too little? Klomp’s answer was basically that Medicare often does not really know, because its prices are produced by formulas, cost reports, and inherited administrative structures rather than clean market signals. That led into the interview’s most coherent intellectual thread: both men argued that Medicare too often pays for inputs instead of outcomes, and that the absence of reliable market price discovery leaves policymakers guessing. Paragon’s summary captured this well, noting their shared concern that Medicare lacks dependable market prices and thus struggles to know when it is overpaying, underpaying, or simply distorting care.
That critique led naturally to market-based pricing. Klomp spoke favorably about efforts to use private-market information, including in the hospital context through renewed attention to market-based DRGs. Kouzoukas acknowledged the usual criticism that this can sound circular if Medicare Advantage prices themselves reflect Medicare benchmarks. Klomp’s response was that the point is precisely to give private plans an incentive to negotiate around real value, rather than reflexively accept Medicare rates plus a percentage add-on. In that view, the goal is not an overnight conversion to textbook markets, but a gradual creation of better price signals that Medicare can then observe and learn from. It is a very Paragon-adjacent argument, but in this interview it came directly from the sitting Medicare chief.
The discussion of Medicare Advantage was similarly revealing. Klomp did not disown MA; to the contrary, he repeatedly said it must remain a central part of Medicare’s future. But he drew a line around what risk adjustment is supposed to do. In his formulation, risk adjustment exists to prevent adverse selection against sicker beneficiaries. It is not supposed to become a source of competitive advantage for plans that are merely better at coding. That is the framework he applied to the controversy over unlinked chart reviews, arguing that if a plan records a diagnosis that drives payment, CMS should want to see some connection to actual care and follow-up, not just a payment-enhancing data artifact. That broader interpretation of the chart-review debate aligns with contemporaneous reporting that CMS proposed excluding diagnoses not tied to real medical care from MA risk adjustment.
This is where the interview was arguably most politically important. Klomp tried to occupy a middle position: pro-Medicare Advantage, but not pro-anything-goes. He framed the issue not as hostility to MA, but as support for program integrity and public trust. That stance also fits later press accounts that he has been willing to frustrate some MA stakeholders even while remaining broadly committed to competition and consumer choice in the program.
The final portion of the discussion was almost philosophical. Kouzoukas offered a rapid-fire series of tensions that every Medicare official faces: taxpayer savings versus regulatory burden, prevention versus paternalism, speed versus system stability.
Klomp’s answers were consistent. He rejected the idea that more micromanagement is the natural route to savings. He argued that markets should be freed to reward better outcomes. He said government should not become paternalistic. And he emphasized that stability and predictability matter, even while insisting that some disruption is unavoidable because the current trajectory of health spending is itself destabilizing. His recurring formulation was that CMS serves two stakeholders: beneficiaries first, taxpayers second. That sentence, more than any single policy point, may be the cleanest summary of his governing posture.
So why does this hour-long Paragon interview matter more now?
Because Klomp is no longer just a policy official with interesting views on site-neutrality, market pricing, and prior auth. He has now been elevated into a broader HHS management role at a moment when the White House wants sharper execution, fewer operational stumbles, and more disciplined messaging. Read in that context, the interview sounds like an early governing memo. It shows a manager who admires career staff, dislikes unnecessary bureaucracy, trusts incentives more than commands, believes in Medicare Advantage but worries about gaming, and thinks government should use convening power more aggressively to move complicated health-care actors toward shared goals.
For Medicare policy readers, that is the real takeaway. The interview is not just a snapshot of what Klomp said in January. It is probably the clearest public preview we have of how one of the administration’s newly empowered health officials thinks about the machinery of Medicare, the limits of administered pricing, and the use of federal leverage short of formal regulation. In that sense, it has become newly worth a close read.
Five Surprising Takeaways
CMS actually reads every comment submitted during rulemaking.
Prior authorization reform relied mainly on voluntary industry commitments.
Drug companies reportedly welcomed changes to global pricing incentives.
Medicare leadership openly admits it cannot tell if many services are overpriced.
A central policy tool is simply convening competitors to negotiate solutions.
