The college said that although personal health budgets could improve care and shared decision making in some patients, the government has yet to address many 'challenges' with the proposals.
It called on the DH to delay roll-out until a 'thorough analysis' of the risks and benefits of the budgets could be made based on findings from pilot sites.
In a position statement sent to care services minister Paul Burstow, the RCGP said it was still unclear how the impact on clinical commissioning group (CCG) costs and financial sustainability of existing NHS services would be managed.
It said CCGs 'should have a clearly defined set of criteria for taking decisions on what treatments and services can be included within a personal health budget'.
Health inequalities must not be allowed to widen under the plans, the college added.
The RCGP also urged GPs to review all personal health budget plans and ensure that their patients are fully informed of the potential risks and benefits.
RCGP vice-chair Professor Nigel Mathers said: 'We believe very strongly in the importance of each patient having personalised care and an opportunity to be involved in making decisions in partnership with their GP.
'Personal health budgets could potentially realise great benefits for our patients – but we want the government to work with us to ensure that it gets the policy framework for implementation right and that the lessons from the pilot sites are learnt. We also need to be convinced that any potential risks have been mitigated.'
In March, a BMJ analysis said the DH's plans risk costs spiralling out of control and patients defrauding the system.