Minister for Health Simon Harris has said he thinks the wording of a promotion by St James's Hospital offering cash to staff to free up hospital beds was "a bit off"'.
Mr Harris said he was pleased the promotion signs in the hospital had been taken down.
He said his understanding was that the promotion was for wards rather than individual staff.
INMO General Secretary Phil Ní Sheaghdha has also said she is happy the posters incentivising staff to discharge patients faster have been removed.
Speaking on RTÉ's Today with Sean O’Rourke, Ms Ní Sheaghdha warned that the story is in "danger of blowing into something that it's not".
She said the discharge lounge is a fantastic concept and staffed by trained nurses.
She said the competition is a clumsy way of saying the lounge is open for business but she did not believe there was any malintent.
Ms Ní Sheaghdha added that if a hospital has money to improve ward environment, it should be using it rather than running competitions like the one at St James's Hospital.
Speaking on the same programme, retired consultant Professor Patrick Plunkett, said a competition to incentivise staff to discharge patients more quickly was not "a bad idea".
He said that a discharge lounge is a centralised area where patients who are waiting to go home can go and be looked after, while paperwork is prepared for them.
The whole idea, he said, was to shorten the discharge process for patients, who are due to go home anyway, while also freeing up their bed.
He added that it is not a method to move people out of beds before they are ready.
In a statement, St James's Hospital said the discharge lounge allowed patients, who have been discharged by their doctor, a place to wait for their prescriptions and transport home.
It also meant that beds can be freed up on wards and its main goal is to improve patient flow throughout the hospital.
The statement continued: "St James's places particular emphasis on the full utilisation of our Discharge Lounge capacity.
"This has included an incentive scheme where based on performance, individual wards can access funding for patient comforts or staff development. Staff do not gain any personal financial benefit from this initiative."