A target to give patients a choice of treatment at four or five hospitals by the end of the year risks being missed, the government spending watchdog says.
There are over 9.4m referrals for non-emergency treatment a year
The National Audit Office (NAO) said ministers had failed to engage GPs, with 50% knowing little about the plan.
A computer system to allow patients to choose the time and date of their appointment was also behind schedule.
But Health Secretary John Reid insisted the plans were "on schedule" and was confident the targets would be reached.
The government is committed to giving patients the choice of using up to five hospitals or other healthcare providers by December 2005 for non-emergency care.
There are 9.4m such referrals each year, representing about half the NHS' hospital workload.
More than 200,000 bookings should have been made by the end of last year but only 63 had, the NAO said.
However, Mr Reid told BBC News the situation was not as "dramatically bad as it sounds", adding that the targets would still be met.
Mr Reid said: "This will be the biggest step forward in terms of patient power in the NHS in the six decades since it started."
He admitted the IT side of the plans was running "weeks, but not months or years late", but added that was not surprising given the "magnitude" of the operation.
NAO head Sir John Bourn said getting GPs on board was key to giving patients choice.
Race against time
"The Department of Health must take urgent and effective action to inform and engage with GPs about the new arrangements," he said.
The NAO quizzed 1,500 GPs for the study and found half knew little about the policy and 61% were negative about choice, fearing it would increase the length of consultations.
Providing choice will be dependent on the "choose and book" IT system, which will allow patients to pick their own appointments.
But the government is facing a race against time to ensure individual hospital and GP surgery systems are compatible with the central e-booking system.
As yet only seven NHS trusts have got the system up-and-running and some 29% of primary care trusts (PCTs) said they did not envisage delivering choice by the end of the year.
Patients Association chairman Michael Summers said he was disappointed the government was falling behind target.
And Dr Hamish Meldrum, chairman of the British Medical Association's GPs committee, said there was still a lot of work to be done before GPs were convinced the initiative would be successful.
"GPs feel they are working in an information desert and will need much more detail and experience of what is involved before they can be convinced of the benefits," he said.
Rhetoric or reality?
Mr Reid said £90 million extra funding would be made available as an incentive for GPs.
Shadow Health Secretary Andrew Lansley said the government would miss the December deadline.
"Labour talk about choice but fail to deliver it because family doctors are not given the incentives and tools they need to make it work," he said.
And Liberal Democrat health spokesman Paul Burstow said the report illustrated "the gulf between the government's rhetoric on choice and reality".