At its meeting earlier this month, the Otago board, in a split vote, decided not to wait for a national policy on the matter.
It expects to save about $1 million a year, and Southland $300,000, as a result.
Southland confirmed its position last week.
No date has been set for the stopping of the funding as management suggestions on how it will be implemented have yet to be considered by both boards.
The boards' decision means they will join Capital and Coast, Hutt Valley and Tairawhiti DHBs in opting to charge private patients - a move which has "hugely disappointed" the New Zealand Medical Association (NZMA).
"This decision will have patients in these two areas receiving a lesser level of health funding than those in 17 other DHBs," chairman Dr Peter Foley said.
"It is yet another example of `postcode health' - where what you have to pay for is determined by where you live.
"This extremely short-sighted move will have a very small impact on the DHBs' budgets but may have very serious health consequences for the people in those regions."
Dr Foley said public hospital waiting lists could increase as a result of the decision, as could serious health problems.
The public system was already under extreme pressure, which led to some people opting to go private.
"In fact, going private helps ease the pressure on the public system," Dr Foley said.
"Patients of private specialists are not necessarily well-off, or have health insurance, and many make sacrifices to afford their treatment.
It is important that patients do not now go without these important tests, which may make them sicker and compromise their care."
But Otago DHB chairman Richard Thomson, who successfully proposed the Otago board approve stopping the payments without waiting for a national policy, said it was unlikely a private patient paying $50,000 for a cardiac procedure would decide against treatment for the sake of an extra $1000 for lab tests.
"When you're spending thousands of dollars, the relative additional cost is, for most people, very small."
Lab tests cost on average $60 a patient, Mr Thomson said.
The Otago DHB was forced to make the decision as it had to prioritise services, he said.
"The decision that we have made is a prioritisation decision."
Southland board acting chief executive Brian Rousseau (who is also Otago's chief executive) said the two lower North Island DHBs had not noticed any change in tests ordered since they had started charging.
"Both the Otago and Southland DHBs are in very difficult financial positions and if we continue to pay for this we need to say `well what are we going to stop elsewhere'."
Health Funds Association executive director Roger Styles said patients would suffer as a result of the decision.
"There's clearly a fair degree of avoidance for some patients who aren't getting these vital tests done because of the cost," he said.
An evaluation in April on the effects in the Wellington area had shown it generated less revenue than expected.
"It's all about shifting health costs on to patients. This has increased total health costs for New Zealanders with little direct saving for the DHBs concerned.
"It is an exercise in ideology rather than sound health policy."
