Previously, the cash was held by the PCT or third party while the patient decides, with help, how it is spent.
But in the latest trials, patients will be paid in a variety of ways such as monthly direct debits or larger one-off payments.
Personal budgets, already been used in social care, allow individuals to decide how, where and from whom they receive their healthcare.
The pilot programme will inform a wider roll-out, with more PCTs will be authorised to offer direct payments over the coming year, according to the DoH.
The scheme will focus on diabetes, stroke, heart disease, end-of-life care and mental health conditions.
Care services minister Paul Burstow said the scheme would stop healthcare ‘slipping back to the days of one-dimensional, like-it-or-lump-it services', and improve lives.
‘There is strong evidence from the social care sector that direct payments help achieve better outcomes, and give people more choice and control over the care they receive.
‘It also encourages a more preventative approach. It is a step away from the rigidity of the PCTs deciding what services a patient will receive.’
Personal budgets will ‘not work for everyone, or all services’ though, said Mr Burstow.
Participating PCTs are Doncaster, Eastern and Coastal Kent, Hammersmith and Fulham, Kensington and Chelsea, Westminster, Islington, Knowsley, Liverpool, Sefton, Oxford, Somerset and West Sussex.