More than 100 private firms will be paid by the National Health Service to treat patients as a result of the coalition's first major expansion of the private sector's role in the health service.

Department of Health figures show that 105 healthcare firms have been granted "any qualified provider" (AQP) status, which allows them to provide basic NHS services including physiotherapy, dermatology, hearing aids, MRI scanning and psychological therapy.

Some private firms, such as InHealth, Specsavers and Virgin Care have already taken advantage of the controversial extension of competition to establish new services. The Department of Health says that 87 providers of different kinds, 38 of which are private and 26 from the NHS, have recently begun treating patients with various conditions under AQP.

But the scale of the private sector's new incursion into the NHS has led senior doctors to voice fears that the health service is being "atomized" and that it will force existing NHS services to close. Private companies, some of which already earn up to 200 million pounds a year each from NHS-funded work, say AQP is a major opportunity to increase their role in the health service.

Under the new rules, each NHS primary care trust in England must open up at least three health services to "any qualified provider," whether they are from the NHS, private sector, charity, social enterprise or voluntary organization. By October 23 last year, 105 private firms and 140 NHS organizations, mainly hospital trusts, had been approved by PCTs and clinical commissioning groups (CCGs).

AQP is still being rolled out and many providers have yet to be chosen. But InHealth, which specializes in adult hearing services and diagnostics such as MRI scans, has already been authorized to start operating in 95 places.

"Clearly AQP represents an opportunity for significant geographic expansion," said Patrick Carter, managing director of the firm's community healthcare services division. It currently earns about 80 million pounds a year from working with NHS patients in London and the south-east but plans services at 100 extra locations from Southampton to Newcastle.

Care UK plans to increase the 190 million pounds a year it earns for delivering healthcare services to NHS patients through 35 new contracts it has won under AQP to provide diagnostic services, elective surgery and diagnosis and treatment of musculoskeletal conditions in the NHS.

AQP "will give scope for other organizations to provide services and should increase competition on the basis of patient satisfaction and clinical outcomes," areas in which it had "an outstanding track record," a spokeswoman said.

Specsavers, the high-street glasses and hearing aids firm, has won adult hearing contracts in at least 33 places. Virgin Care, part of Richard Branson's empire, has been awarded AQP status in the 10 areas for which it applied for contracts. It plans to offer dermatology, ophthalmology, ultrasound, podiatry and back and neck pain services and fracture clinics.

BMI Healthcare has begun winning contracts to provide MRI scanning and non-obstetric ultrasound. A BMI spokesman declined to say exactly how many it had gained.

AQP was intended to let small, local private firms become NHS providers. But 24 of the 105 were large companies, with at least 250 staff, and the other 81 were small or medium-sized enterprises, with fewer than 250 staff, according to Dr Leonid Shapiro, the managing partner at healthcare consultants Candesic, who obtained the figures when the Department of Health allowed him to view its AQP database.

AQP could ultimately prove to be a big bonanza for such firms, said Shapiro. "While off to a measured start AQP could spread to cover the bulk of NHS services. We are only at the beginning of what could be a significant driver of private provider revenue and volumes," he wrote in a detailed analysis of AQP in Health Investor magazine.

Ministers insist AQP will enhance patients' choice of who treats them and raise standards. Unlike previous NHS outsourcing policies, those with AQP status are simply allowed to offer their service, alongside others, in a PCT or CCG area. It does not guarantee a set number of patients or income.

"AQP will help to atomize the NHS. It's causing the NHS to be split up into thousands of different providers of health services," said Dr Clare Gerada, the chair of the Royal College of GPs.

"It's also atomizing the patient into individual parts – their eyes, ears, mental health and so on – which is wrong and unhelpful, and forcing them to interact with multiple different services rather than just their local NHS."

The fact that as many as 13 different providers of the same health service have been allowed to start operating in the same area will "baffle" both patients and GPs, who will not know which is the best to be treated by, Gerada added.

Dr Laurence Buckman, chair of the British Medical Association's GPs committee, warned that private providers would start advertising to attract and retain patients, and that NHS organizations would have to follow suit in order to remain viable. Some local hospital services would go out of business in the face of competition under AQP, he added.

"AQP will be the government's opportunity to fragment care and finally do away with any notion that there is a national health service. Logically if other people start providing a service, those who are providing it at the moment are going to have their viability reduced. The result of that is that the hospital service shrinks," he added.

The Royal College of Physicians, which represents hospital doctors, also voiced concern. "The RCP is concerned that the extension of any qualified provider could destabilize existing services and damage integrated care pathways," said Dr Patrick Cadigan, its registrar.

"No one area of the health service operates in isolation, the entire system is interdependent. Services link together to form care pathways to ensure joined-up care, and NHS trusts offer education and training to the next generation of doctors and nurses," he added.

Andy Burnham, the shadow health secretary, said: "By opening the door to so many private providers, ministers are fragmenting the NHS and taking it further away from the integration they claim to support. They risk leaving the NHS increasingly beholden to the private sector and less able to provide its own services." AQP should be halted pending a review of its effects on the NHS, Burnham added.

Earl Howe, the health minister, dismissed doctors' objections. "This is about offering patients more choice, control and driving up the quality of their care, and the idea that this will have a negative impact on healthcare and patients is nonsense.

"Patients have already had choice for non-urgent hospital treatments like joint replacements for several years and this hasn't destabilized services," Howe added.