Social Protection Minister Joan Burton has heaped pressure on the bosses of five under-fire hospitals and agencies to prove that they are compliant with the government's pay rules.
The Irish Independent revealed today that the hospitals, which include St James's and St Vincent's in Dublin, face the prospect of having their funding cut by 20pc in one weeks time.
St John Of God, Brothers of Charity Southern Services, and Brothers of Charity Services South East have also been told that their funding will be slashed.
In a statement released last night the HSE said the five agencies are deemed non-compliant as they have not made business cases for their pay levels.
They are also required to submit the necessary detailed business cases.
Speaking at the Labour Party conference in Enfield, Co Meath, Ms Burton heaped pressure on the agencies to become fully compliant with the government-imposed pay rules.
She also expressed concern that vulnerable patients may feel "frightened" as a result of the potential funding cut.
"I think what is important here is that the five organisations, whom I think have been identified by the HSE, as not being in compliance, not giving in the information - I think it really is incumbent on them to actually go to the HSE, sit down and actually settle it," she said.
"At the end of the day, government policy in relation to policy is quite clear. And those organisations will have to be accountable to the HSE. And I do not think the issue should be used to frighten people who are particularly vulnerable in terms of medical needs or in terms of disability," she added.
The HSE said the reduction in cash funding is not a budget cut and therefore should, under no circumstances, impact on the provision of services to patients or clients.
A total of 10 agencies are compliant with pay policy and further 27 have presented 88 business cases for additional allowances to be paid to senior staff.
An internal review panel of senior staff within the HSE has now been appointed to examine the business cases.
The review comes after a detailed audit of Section 38 agencies and whether or not they were in compliance with pay policy began last December.
As a result, some organisations stopped paying top-ups to senior staff while others are in the process of submitting a “business case” to the HSE outlining why they feel they should be maintained.
The cuts in funding for the five hospitals and agencies is the latest development in the top-up scandal which came to a head last year with revelations surrounding details of payments at the Central Remedial Clinic (CRC).