The Federal Government has slashed almost $200 million from health flexible funds over the next three years, with the cuts to take effect from the end of June.
Public Health Association of Australia spokesman Michael Moore said the organisations affected provide essential services in rural, regional and remote Australia.
He said the organisations worked to close the gap in health outcomes for Indigenous Australians, manage vital responses to communicable diseases, and deliver substance-use treatment services around the country.
A coalition of 11 peak health organisations is calling on the Federal Government to reverse its planned cuts.
"Obviously it's of great concern to all the services and organisations potentially affected," he said.
"To cut the best part of $200 million from frontline services in drug and alcohol, frontline services in Aboriginal and Torres Strait Islander health and frontline services in rural and remote health is inexcusable."
Alcohol and Other Drugs Council spokeswoman Rebecca MacBean said alcohol and drug rehabilitation services would be severely impacted by any funding cuts.
It comes at a time when drugs such as methamphetamine or ice are creating serious social problems across Australia, particularly for rural and regional Australia.
"To think that funding for these vital services is currently under threat beggars belief," Ms MacBean said.
She said the foreshadowed cuts would significantly reduce the capacity of non-government organisations and peak bodies to deliver services across the country.
Experienced drug and alcohol workers already quitting
Several drug and alcohol treatment services across Australia contacted the ABC are worried about the impact the funding uncertainty is having.
Brendan Pont, from the Queensland Network of Alcohol and Other Drug agencies, said highly trained drug and alcohol workers were already leaving the sector.
"While we keep hearing about the need for alcohol and other drug treatment services and particularly the 'ice epidemic', this uncertainty is meaning that quality clinicians who have years of experience in the sector are starting to look for work elsewhere as they have no guarantee of work post June 30," he said.
Experts said Indigenous health services were also under threat.
Any cuts to Indigenous health programs will make access to life-saving medical services more difficult, Public Health Association's Michael Moore said.
"We are particularly concerned about the future of the Close the Gap Indigenous chronic disease package, which aims to prevent diseases through GP services, medications and tackling smoking," he said.
Indigenous health workers said further funding cuts for non-government health agencies would lead to worse health outcomes.
Janine Mohamed, chief executive of the Congress of Aboriginal and Torres Strait Islander Nurses and Midwives, said all the evidence shows support is needed for preventive health care and timely interventions that reduce the likelihood of expensive hospitalisation.
"Services provided by the community sector are integral to the achievement of key health and economic goals and maintaining funding is vital to achieving the key targets for Closing the Gap in health outcomes for Indigenous Australians," she said.
A spokesperson said the Government had committed more than $8 billion over the next three years from the flexible funds for a range of health initiatives, including drug and alcohol services.
The spokesperson said this decision was announced as part of the 2014/15 federal budget.
Mental health services funding cuts
It comes on top of growing uncertainty about the provision of mental health services.
Thousands of Australians seeking help for mental health problems face growing uncertainty because federal funding for hundreds of contracts has not been guaranteed after June 30.
Seventy mental health groups — including Mental Health Australia, Headspace, and the Black Dog Institute — have written an open letter to Prime Minister Tony Abbott and Health Minister Sussan Ley.
The letter reads: "We have not received any definitive advice regarding the future of programs."
"Some agencies have indicated that without this advice, they will have to give staff notice of termination of employment in a matter of days.
"This ongoing uncertainty is causing a huge disruption to organisations and increasingly, deep anxiety amongst the people they serve."
The Federal Government said they were hoping to resolve mental health funding as soon as possible.
Opposition health spokesman Catherine King called on the Government to clear up the confusion over funding.
"Minister Ley must immediately end the uncertainty by making an announcement on funding, and explaining how demand will be met for services following the $197 million cut," she said.
"The flexible funding debacle is yet another example of the chaos and confusion which is a hallmark of this Government's health policy."
The ABC has sought comment and reaction from Ms Ley.