The Southern District Health Board sent letters to parents and caregivers of 1350 children who were seen by the service between 2007 and 2010.
The letter said a recent restructuring, and subsequent review, "identified some issues with the protocols used".
"Based on this, there is a possibility that there may be a small number of children with hearing problems that have been overlooked," it said.
Chief operating officer (Otago) Vivian Blake said a restructuring of the service was undertaken in July 2010 to ensure it was ready for the introduction of a new programme for newborn hearing testing.
As a result of the restructuring, a review was carried out and it was found "there were some areas where there were gaps", namely a double-check procedure which covered both a subjective and technical assessment.
The review also coincided with a complaint received from a parent who "had a concern about potential for their child being missed".
Mrs Blake described the issuing of letters as "overly cautious" and a "precaution" and said the number of children at risk of being adversely affected was "low".
"At the moment we don't really know if there is a problem, but we need to make sure so in order to do that we are sending out letters," she said.
One parent contacted by the health board, who wished to remain anonymous, believed the issue could be a "hassle" for some parents and a serious problem for some children.
He and his wife took their now 3-year-old son to the hospital for a grommet operation more than one year ago.
"We went in there and everything was fine, it seemed like a really good process," he said.
However, it was "not good enough" to expect parents, particularly from rural areas, to bring their children back to the hospital for further assessment.
He was also concerned about the ability of parents to identify signs of hearing problems in younger children.
The letter noted children with hearing loss may, among other problems, have difficulty learning and be frequently inattentive, which he believed many toddlers would be.
"Are parents the best judges if children have hearing loss?"
As a precaution, his son would be booked in for another assessment at the hospital, and he was hopeful he had not suffered hearing loss.
"I would imagine there would be some concern for other parents out there."
Mrs Blake said children tested outside the years of 2007 to 2010 would have been re-tested by other means, such as B4 school checks.
About 40 parents had contacted the hospital after receiving letters to request follow-up screening.
The reason for the delay in contacting parents about concerns raised was to ensure the protocols were being adhered to, in line with modern best practice.
