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The federal agency said because the clinics were more than nine miles away from the hospital and there was no direct line of authority, the clinics were free standing and could not claim the provider-based billing rate.
Health Care Financing Administration said the merger violated billing guidelines because there was no longer a direct line of authority between the county hospital and its clinics.
Powers was assigned the job of rewriting the contract between the county and its 43 clinics to show a more direct line of authority between the clinics and the hospital.
Flynn said the reimbursements likely will be forthcoming if county officials can prove there is a direct line of authority between the Ventura County Medical Center and county-run outpatient clinics.
The agency also determined that the merger failed to establish a direct line of authority between Behavioral Health doctors and the Ventura County Medical Center.
In a 4-1 vote, with Susan Lacey dissenting, the board decided to disassemble the $171 million-a-year conglomerate after the federal Health Care Financing Administration determined that the county had failed to show a direct line of authority between the Ventura County Medical Center and behavioral health doctors.