GP leaders have accused the DH of 'trying to get GPs on the cheap' by offering just £12.93 per consultation for practices taking part in its delayed boundary abolition pilots.
The fee is around half the amount per consultation paid to some walk-in centres.
Plans for all practices in England to agree 'outer boundaries' within which they will continue to see patients who move outside their normal catchment area have also been hit by delays and confusion.
GP revealed last month that pilots in London, Manchester, Salford and Nottingham to allow patients who live anywhere in the country to register at participating practices had been delayed. The pilots, agreed under the 2012/13 GMS contract deal, were to begin on 1 April but will now start on 30 April.
GPs who signed up have threatened to pull out over a lack of guidance. More may now withdraw over poor funding, senior GPs predict.
The DH refused to reveal how many practices had expressed an interest in the £2m one-year pilots, which will cover the PCT areas of Westminster, City and Hackney, Tower Hamlets, Manchester, Salford and Nottingham City. However, LMC estimates show 14 practices in Nottingham, around 18 in Manchester, 13 in Salford and Trafford, and 17 in London have expressed an interest.
Out-of-area patients will be able to register at a pilot practice, meaning it will receive the same payments as it would for any other registered patient, or be seen as a day patient. In this case, the practice receives £12.93 per consultation up to a maximum five times in a year.
Manchester LMC chairman Dr John Hughes said: 'The funding is rather pathetic as walk-in centres get about £25 per consultation. They are trying to get a cheap deal.'
To be paid, practices must send details of the consultation back to the patient's registered practice within 24 hours.
Londonwide LMCs chief executive Dr Michelle Drage said: 'GPs have repeatedly said this is not a good idea but are used to making things work no matter how crazy an idea it is.'
The DH was unable to say when it would issue guidance on outer boundary areas, which was also due this month.
Dr Hughes said his practice expressed an interest in the boundary pilots thinking it was about the outer boundary scheme, and warned many others could have done the same.
GPC negotiator Dr Chaand Nagpaul predicted the pilots would show 'the problems with patients registering remotely'.
Health secretary Andrew Lansley said: 'This is part of a range of measures to put patients' interests and desires at the heart of services.'