Green Party health spokeswoman Julie Anne Genter said the funding cut appeared to show the Government had given up ahead of missing its target.
"We haven't achieved what we want, and I don't see how cutting funding is going to help with that," she said.
"It is quite alarming if the Government is just giving up. It's shocking that we still have such high rates of rheumatic fever in New Zealand.
"There is no reason for that in a country with this level of wealth overall - we need to do better."
The Ministry of Health said preventing rheumatic fever would continue to be a focus for the 11 District Health Boards which had high rates of the illness.
"The funding allocation decision was based on ensuring a strong focus on the population groups that experience more than 90 per cent of all rheumatic fever cases," the ministry said.
"It also addresses the issue of equity for those DHBs that started from a high baseline and were always going to have to do more work to get to the national target."
The ministry said it was focusing its prevention efforts on Auckland, where more than half of rheumatic fever cases were picked up.