THE HSE has climbed down from threats to hit medical cards in its service plan for 2014.
The budget for next year totals cost reductions of €619m in health services.
However, threats to claw back €113m in savings from medical card holders have been significantly watered down.
Overall, the expected reduction of €666m came down to €619m, with savings coming mainly from pay and pensions.
The HSE, working with Minister for Health James Reilly and his department, said that it had "succeeded in ensuring that the target of €113m set against medical card probity will now come from other sources rather than from medical cards."
But it warned that this sum remained a target to be achieved, and would come from €47m of additional monies from Government, with the balance in turn coming from a reduction in money set aside for lump-sum pension payments in 2014.
Minister Reilly said that vital health services including bichochlear implants, additional medical cards and organ transplants had been identified as the main recipients for additional funding through the National Service Plan.
But the IMO said that the plan amounted to an "austerity charter" for health services.
"There is little doubt that we are facing into a New Year with a budget for our health services that we all know is simply not adequate to provide the level of care necessary," said president Dr. Matthew Sadlier.
"It is past time that the Government takes responsibility for the provision of a safe and effective health service that allows frontline staff to deliver quality care."
Dr Sadlier added that waiting lists would increase as a result of cuts to services.
And he claimed that the HSE was wrong to persist with plans to extend GP cards to all children under six at the same time as it was recalling them from older people who have depended on them for years.
Minister for Health Reilly said that the savings target, which was an element of the overall targeted payroll savings, would now be put to one side and would also be subject to a separate process over the coming months.