The Sky Blues were left fuming after play was allowed to continue despite Kelly falling to her knees just before halftime on Thursday night, coughing up blood and struggling to breathe.
Replays showed Queensland winger Julia Robinson had collected Kelly's throat with her elbow as she ran the ball. Robinson denied the move was intentional after the Maroons' 18-10 win at Sydney's CommBank Stadium.
Trainers attended to Kelly as play continued down-field, where Queensland forward Tazmin Gray capitalised on the personnel advantage to score a try and seize the lead for the visitors.
Referee Adam Gee placed Robinson on report after the try had been scored, but NSW received no penalty and trailed for the remainder of the game.
Kelly was taken to Westmead Hospital and as of Friday morning, remains there. The Sky Blues provided an update on her condition just before midday.
"Tests have shown Kelly does not have a fracture to her larynx or windpipe damage," a statement read.
"She is breathing more freely but still has swelling to the throat so she will remain in Westmead Hospital as a precautionary measure.
"Game Two of the Ampol Women's State of Origin will be played on Thursday 22 June in Townsville and Kelly's availability will depend on her recovery."
NSW coach Kylie Hilder admitted the incident had rattled her side, who gave up two more tries in the 10 minutes after halftime.
"There was a lot going on in the sheds. An ambulance came in for Izzy," she said.
"It wasn't great, she was in a lot of discomfort so there was a fair bit of noise coming as well."
Sky Blues centre Jess Sergis questioned why Gee stopped play in the second half when Queensland's Emily Bass and Evania Pelite suffered less severe injuries.
While Pelite eventually left the field with what appeared a foot concern, Bass played on.
"I'm a little disappointed," Sergis said.
"Izzy's gotten a forearm to the throat, she's headed off to hospital.
"But a few girls go down with cramps in Queensland and he stops the game."
Robinson said her thoughts went out to Kelly, with whom she played on Australia's run to World Cup glory last year.
"Obviously rugby league is a physical game but we don't want to go out there and hurt each other," she said.
"When Izzy went down, I made sure to check on her. It's not nice to see a player go down like that and I love Izzy as a mate off the field. I respect her on and off the field so I hope she's OK."
While Kelly is still in doubt for Game II, winger Tiana Penitani will return after suffering a hamstring strain at NSW training during the week.
Forward Simaima Taufa is also on track to play for the Blues in Townsville, having missed the first game with a shoulder injury.
