California Controller Race Highlights Hospice Fraud Risks
Candidates offer conflicting audit strategies as operators face increased scrutiny of Medicare billing practices.
Updated on Oct. 7, 2026 in Healthcare
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California controller candidates Malia Cohen and Herb Morgan have proposed diverging oversight plans to combat widespread hospice fraud. The policy debate follows a period in which over 1,000 hospices were removed from Medicare since early 2025.
Why it matters
The state controller manages fiscal oversight and auditing for public programs, making the outcome of this race a significant factor for healthcare operators regarding regulatory compliance and payment audits. Fraud in the industry remains rampant, with an estimated $3.5 billion in fraudulent claims originating from Los Angeles County alone.
Regulatory pressure has intensified as the California Department of Health revoked hundreds of hospice licenses over the past two years. More than 1,000 hospices have been removed from Medicare nationally since early 2025.
The players
Malia Cohen
The incumbent California controller who manages state fiscal oversight and auditing functions.
Herb Morgan
The founder of Efficient Market Advisors with 40 years of financial market experience.
The details
The California state controller holds independent authority to audit state payments and review internal controls. Malia Cohen, who has served as controller since 2022, advocates for modernizing the existing fiscal management system to catch discrepancies. Challenger Herb Morgan, founder of Efficient Market Advisors, proposes increasing transparency by publishing every material state payment on a public-facing ledger.
Timeline
- 2026-10-07
Controller candidates discuss hospice fraud strategies.
2025: More than 1,000 hospices were removed from Medicare.
2022: Malia Cohen began her tenure as California controller.
2004: Herb Morgan founded Efficient Market Advisors.
November 3, 2026: Election Day for the controller race.
Market Landscape
The push for tighter oversight follows systemic concerns surrounding the Medicare hospice benefit program. Candidates are responding to a regulatory climate where the state has already revoked hundreds of licenses to combat fraud.
Healthcare operators should anticipate heightened audit activity regardless of the election result, given the state's ongoing license revocation efforts. Owners should ensure their internal billing documentation is prepared for increased transparency requirements.
The takeaway
The race underscores a shift toward more aggressive state-level financial surveillance in healthcare. Operators should prioritize auditing their own Medicare billing logs now to ensure compliance with current standards.
Further reading
For more on industry regulatory trends, read our coverage on Healthcare.
Source note: This article includes information reported by Daily Bulletin.
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Should local government prioritize fraud prevention over auditing and recovering lost taxpayer funds?
