The HSE has ordered staff to impose a strict weekly ration on allocating nursing home places for patients who are fit to be discharged from hospital.
An internal HSE memo warns officials around the country they must stick rigidly to a set weekly quota of convalescent and long-term nursing home places which are in most demand from older people.
The memo from HSE Older Persons Services warns: "We have a strict number of allocation for convalescence and long-term care on a weekly basis now.
"If a client is not approved this week, they are placed on a waiting list and they may or may not be approved the following week."
It states: "This is country-wide now."
The instruction makes clear there is no room for flexibility.
"Please note if clients are discharged to a nursing home without approval from this office, we will not be in a position to approve transitional care funding."
The dispatch from the Delayed Discharges Funding section comes as the HSE's €1bn budget for Fair Deal is under growing pressure.
There are 23,042 nursing home residents supported by the Fair Deal scheme but it has a growing waiting list.
The number on waiting lists for Fair Deal was 557 in March but has now grown to 803, many of them lying in a hospital bed.
It also comes as hospitals this week endured winter levels of overcrowding and difficulties freeing up beds occupied by patients, many of whom need a nursing home.
It was recently revealed that new HSE director-general Paul Reid was told in briefing documents by senior officials that the Fair Deal scheme is facing a deficit of €30m by the end of this year.
Nursing Homes Ireland, which represents private nursing homes, confirmed its members had noticed a slowdown in the number of patients being discharged to their facilities in recent weeks.
The organisation's CEO Tadhg Daly said HSE officials admitted the memo had been issued, reiterating the Fair Deal scheme was under severe financial pressure. "The HSE stated it has a responsibility to manage within its allocated resources.
"The Department of Health today informed Nursing Homes Ireland monitoring of the budget is ongoing.
"We reminded the department of Minister for Older People Jim Daly's statement in Dáil Éireann as recently as May 29 the target four weeks for approval of funding remains a commitment in the Programme for a Partnership Government."
He said the significant delays in financial approval for nursing home care under Fair Deal, together with reductions in transitional care funding, was exacerbating hospital overcrowding.
"We are aware of a number of acute hospitals that have not approved a single patient for transitional care funding this week.
"The Government needs to move quickly to a decision to increase funds for Fair Deal and transitional care.
"If this isn't addressed immediately by the Government, it will mean great hardship for older people and their families as they wait in acute hospitals.
"It will exacerbate delayed discharges, which are a lead contributor in the record overcrowding numbers in our hospitals."
The latest rise in hospital waiting lists - which has seen the numbers waiting for surgery increase to 69,671 compared to 68,765 in May - is also being partly linked to the lack of hospital beds.
The HSE said yesterday it was within target this year to offer a nursing home place to Fair Deal applications within an average of four to six weeks. Transitional care funding is for four weeks' nursing home convalescence. The HSE said "managed control" around this funding was in place and a number were assigned on a weekly basis.