HEADER. Chris Klomp is about to become the official #2 at HHS - the Deputy Secretary. How does Klomp think Medicare should pay for innovation? His recent WSJ interview and two Senate hearings offer revealing answers: reward outcomes, make clinical AI reduce costs, and align FDA and CMS evidence expectations earlier. But the details matter: RAPID excludes laboratory tests, and senators challenged AI-assisted prior authorization. Our deep-dive AI review examines and connects all three appearances to explain an increasingly influential HHS official’s priorities—and what they could mean for diagnostics, biotechnology, and reimbursement.
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AI CORNER
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In March, this blog featured several articles about Chris Klomp, a senior CMS policymaker who was being moved to a #2 position under RFK Jr at HHS. A Senate committee recently moved his nomination for Deputy Secretary forward.
What's new for him? WSJ just published a 25-minute interview between Klomp and Liz Whyte. Find it here. We cover that first. Then, in a second section, we provide highlights from his Senate appearances in September.
Across all three appearances, Klomp returns to several consistent themes:
- Reward outcomes rather than activity. The hearings emphasize shared savings and appropriate preventive spending; the WSJ interview extends this argument to clinical AI and explicitly cites ACCESS.
- Accelerate innovation while preserving standards. September 15 highlights FDA–CMS evidence alignment; September 16 emphasizes inspections and development timelines; WSJ broadens this into faster trials and biotechnology competitiveness.
- Lower drug costs without weakening American biotechnology. He repeatedly presents these as simultaneous obligations.
- Modernize government technology. The hearings focus on aging Medicare systems; WSJ emphasizes interoperable data as essential infrastructure for clinical AI.
- Manage through trust, competence and accountability. These leadership principles recur almost verbatim.
The strongest continuity is his belief that better incentives and better execution can improve access while restraining costs. The WSJ interview develops that philosophy more expansively; the hearings expose the difficult implementation questions.
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Chris Klomp’s WSJ interview offers a consequential view of CMS priorities: lower drug costs, stronger primary and preventive care, and reimbursement that makes clinical AI improve outcomes while reducing spending. He cites CMMI’s ACCESS model as a guide and supports faster biotechnology development without sacrificing safety. Although he provides little direct genomics news, his influence over payment, innovation and HHS operations makes him an important official for diagnostics stakeholders to read closely and follow over time.
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Klomp presents CMS as an instrument for changing healthcare’s economics: lowering drug costs, moving resources toward prevention, and ensuring that AI produces savings rather than simply more billable activity. His most revealing discussion concerns reimbursement for clinical AI. For diagnostics and genomics readers, that passage deserves more attention than the interview’s headline emphasis on pharmaceutical negotiations.
The supplied transcript runs approximately 24 minutes. Drug pricing occupies roughly seven minutes, clinical AI and reimbursement nearly four, and hospitals and payment reform another three. Much of the interview therefore concerns CMS or policies closely connected to its purchasing power.
His clearest CMS priority is making technology reduce costs. Klomp distinguishes between AI used in revenue-cycle management and AI used clinically. He describes providers deploying algorithms to increase collections while insurers deploy competing algorithms to resist payment. His objection is that considerable technical talent is being consumed by this administrative contest rather than improving care.
He is strongly enthusiastic about clinical AI, calling it a potentially democratizing force for access and quality. His example is dermatology: long appointment waits and expensive, brief examinations suggest an opportunity for computer vision to identify patients needing specialist attention. He describes AI as a physician extender that could expand access and channel appropriate patients toward clinicians.
But his enthusiasm comes with a financing condition. He identifies three requirements:
| Requirement | What it reveals about his priorities |
|---|---|
| Interoperable healthcare data | AI adoption depends on usable information moving across institutions. |
| An FDA framework supporting innovation while preserving safety and efficacy | Regulatory modernization is part of the deployment strategy. |
| A “deflationary” reimbursement mechanism | Clinical productivity must translate into affordability. |
The third is the most consequential CMS signal.
Klomp argues that applying existing payment arrangements to rapidly expanding AI applications could generate a substantial spending increase.
He describes physician reimbursement principally through time inputs and RVUs—a simplified account—and questions whether that structure captures technology’s promise.
His preferred direction is to pay for outcomes rather than time. He explicitly cites CMMI’s ACCESS model, led by Abe Sutton, as an example of initiatives intended to reimburse technology for outcomes. He then broadens the ambition, suggesting that restructuring reimbursement generally along those lines could serve more patients while reducing costs.
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For developers of diagnostic AI, this is a significant statement of policy preference. Demonstrating that software saves physician time may support adoption, but Klomp’s remarks suggest that CMS will also ask how those productivity gains reach patients and purchasers. He does not announce a specific reimbursement pathway for pathology AI, autonomous diagnostics or laboratory software.
Drug pricing remains his most developed operational portfolio. Klomp discusses both Medicare negotiations under the Inflation Reduction Act and the administration’s most-favored-nation initiative. He presents the latter as having two linked objectives: reduce Americans’ costs and preserve U.S. biotechnology leadership.
His account is more sympathetic to pharmaceutical manufacturers than Means’s interviews might lead a listener to expect. He describes executives as people motivated by therapeutic innovation who can be brought toward a negotiated agreement. He also identifies PBMs, group purchasing organizations and distribution arrangements as domestic reform targets.
His most concrete Medicare disclosure is his statement that 1.1 million beneficiaries had enrolled in a bridge model offering $50 GLP-1 access for previously uncovered obesity indications. He presents that enrollment figure as newly public. That is a potentially newsworthy claim from the interview, although its eligibility rules, cost-sharing terms and enrollment definition would need confirmation before publication as an independently established program statistic.
Hospital policy reveals a deliberate redistribution agenda. Asked about Medicaid cuts, 340B changes and site-neutral payment, Klomp acknowledges hospitals’ narrow margins and substantial fixed costs. He nevertheless argues that sustaining the existing system through continually increasing spending is untenable.
CPT and RVUs
He describes physician fee schedule changes as shifting reimbursement from specialty and reactive services toward primary and preventive care. The practical message is that providers should expect continued pressure to move investment into community care rather than additional hospital infrastructure.
His preferred transition is gradual and predictable, with acute hospitals stabilized while demand for expensive interventions declines. He does not, however, answer the interviewer’s individual questions about Medicaid, 340B or site neutrality in operational detail. His claim that 340B accounts for approximately half of hospital margins is presented without supporting methodology.
For genomics, the signal is supportive but indirect. Klomp explicitly includes cell and gene therapies in his concern about U.S. biotechnology competitiveness. He advocates faster trials, easier patient recruitment, greater data interoperability and more use of postmarket evidence. His proposed ambition—reducing average concept-to-commercialization time from 15 years to five—is aspirational, not a demonstrated result.
He says nothing substantive about molecular diagnostic coverage, MolDX, laboratory pricing, MRD, CGP or screening tests. His emphasis on prevention should therefore not be treated as a commitment to pay for particular early-detection technologies.
Finally, his description of White House management sharply differs from Means’s. Asked directly about Susie Wiles, Klomp praises her efficiency, judgment, delegation and accountability. He links HHS personnel changes to competence, integrity and trust. Means portrays substantially the same power structure as obstructive and compromised. The interviews establish contrasting public accounts; they do not resolve which account better explains particular decisions.
Klomp emerges as an executive focused on negotiation, organizational control and payment incentives. [See also the recent HHS white paper on renal care reform and incentives. Remember that renal is a priority for Abe Sutton at CMMI].
His most important message for CMS-dependent innovators is that technological progress should improve access and outcomes while restraining spending—and that reimbursement must be designed to make that happen.
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His Senate hearings in September (one, two) were coverd by Bloomberg Law (subsc) and STAT (subsc).
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Klomp appears in both hearings. The PDF labeled “20260215” contains the September 15, 2026 Senate Finance hearing; the other is the September 16 HELP hearing. Both are unofficial transcripts with occasional transcription errors.
Chris Klomp’s September confirmation hearings offer a more specific account of his healthcare agenda than his subsequent Wall Street Journal interview. For reimbursement and diagnostics stakeholders, the most consequential passages concern the gap between FDA authorization and Medicare coverage, the incentives behind prior authorization, and the government’s capacity to evaluate what its spending accomplishes. His testimony combines support for faster innovation with an explicit insistence that Medicare retain an independent judgment about what deserves coverage.
Faster coverage through earlier evidence planning. At the September 15 Finance hearing, Senator Bill Cassidy described a familiar predicament: a small company finally secures FDA approval, only to face another lengthy process before Medicare coverage. Klomp called this interval a “valley of despair” and endorsed closer coordination between the agencies.
His example was RAPID—Regulatory Alignment for Predictable and Immediate Device coverage. He described FDA and CMS engaging manufacturers early enough to agree on endpoints before trials begin, allowing one evidence-development program to address both agencies’ needs. The objective is to reduce sequential reviews and avoid discovering Medicare’s evidentiary expectations only after completing FDA development.
For companies financing clinical studies, this is a significant policy preference. Klomp recognizes delay as an economic problem for innovators and treats coordination within HHS as part of the solution.
But FDA authorization does not establish Medicare coverage. Klomp expressly distinguished FDA’s safety-and-effectiveness standard from Medicare’s reasonable-and-necessary standard. He argued that an intervention can satisfy the former without necessarily deserving public payment, given available alternatives. His position favors earlier clarity about evidence requirements while preserving Medicare’s separate judgment.
That distinction matters for technology assessment. The opportunity he describes is a more predictable development process, rather than an assurance that regulatory success will produce coverage.
There is also a substantial limitation for laboratory readers: CMS’s published RAPID proposal excludes in vitro diagnostics, including diagnostic laboratory tests, leaving their coverage largely with existing MAC pathways. Klomp did not discuss that exclusion in this exchange. His enthusiasm for RAPID should therefore not be mistaken for a new accelerated route for molecular tests.
Payment incentives should determine how much administrative control is necessary. Senator Sheldon Whitehouse supplied another revealing exchange. He argued that providers participating in shared-savings arrangements already have incentives to avoid unnecessary spending, weakening the rationale for insurers to impose prior authorization.
Klomp agreed that those incentives are substantially aligned. He also emphasized the converse: failing to spend appropriately on prevention can increase total costs later. The discussion goes beyond a general endorsement of value-based care. It suggests that utilization controls should reflect who bears financial responsibility for patients’ outcomes and spending.
Whitehouse proposed requiring insurers to obtain CMS permission before imposing prior authorization on participating providers. That was the senator’s proposal; Klomp did not announce its adoption.
The exchange also illustrated Klomp’s engagement with detailed payment mechanics. He agreed that Rhode Island’s position within a regional healthcare market warranted attention to its Area Wage Index problem and offered technical assistance. STAT subsequently reported that Whitehouse supported his nomination because he was “good on payment issues.”
WISeR exposes a harder question about technology and incentives. At the September 16 HELP hearing, Senator Patty Murray challenged the AI-assisted prior-authorization model in traditional Medicare. She argued that contractors’ compensation encouraged denials and cited an actuarial warning. Klomp initially said he understood that contractors did not make more money by denying care, then emphasized penalties for inappropriate denials, CMMI oversight and anticipated vendor-level reporting.
He acknowledged that prior authorization has often been misused, recounting a family member’s six-week delay. Nevertheless, he defended carefully targeted utilization management as potentially appropriate.
For oncology stakeholders, Murray’s warning about possible expansion into cancer care deserves attention. Klomp did not confirm a defined oncology expansion. He committed instead that the program should not expand unless it was operating appropriately. The exchange leaves an unresolved accountability question: how CMS will demonstrate that technology-supported review improves care rather than merely restricting expenditure.
Medicare’s own technology is another priority. Asked about outdated systems, Klomp described Original Medicare paying approximately $1.5 billion daily through a roughly fifty-year-old, COBOL-based claims system. He said basic operating measures—including emergency-department and inpatient utilization—were not readily available when he requested them.
His complaint was managerial: inadequate information slows policy decisions, weakens fraud detection and prevents timely assessment of performance. Modernization, in his account, is necessary infrastructure for better purchasing and oversight. He described funding and recruitment efforts, without presenting completed results.
Innovation policy extends beyond CMS. Klomp repeatedly linked American biotechnology competitiveness to faster FDA processes. He supported conducting manufacturing inspections during construction rather than waiting until facilities were finished, and argued for stronger scrutiny of overseas production and clinical evidence.
When Senator Steve Daines questioned whether drug-pricing models could undermine smaller biotechnology companies, Klomp reiterated the administration’s paired objectives: lower American drug costs and preserve U.S. biotechnology leadership. He did not provide a detailed answer demonstrating how the models would protect smaller developers’ financing.
His broader agenda includes prevention, chronic disease, pharmaceutical pricing, PBM transparency and operational accountability. Senators also pressed him on vaccines, staffing and responsiveness to Congress, testing whether his management philosophy translates into difficult decisions.
For diagnostics stakeholders, the hearings reveal an influential official who understands the practical consequences of coverage delays and payment design. His support for innovation is substantial, but conditional: evidence must satisfy Medicare’s needs, incentives must support appropriate care, and administrative modernization must produce measurable results. Neither hearing supplies a new commitment on MolDX, molecular-test pricing, MRD or comprehensive genomic profiling.
Sources: September 15 hearing, particularly PDF pages 24–26 and 35–37: klomp 20260215 Hearing.pdf
September 16 hearing, particularly PDF pages 20–21 and 41–45: klomp 20260916 Hearing.pdf
Prepared statement: klomp 20260916 Hearing EsSAY 3p.pdf
STAT coverage: Klomp STAT.pdf
