NHS hospitals in England will have a legal duty to charge overseas patients upfront for non-urgent care if they are not eligible for free treatment.
From April this year, foreign patients could be refused operations unless they cover their costs in advance.
NHS Improvement, which oversees the trusts, said hospitals would no longer have to chase money they are owed.
Emergency treatment will continue to be provided and invoiced later.
The announcement from Health Secretary Jeremy Hunt comes amid recent headlines about the cost of tourists using the NHS.
A BBC documentary, Hospital, showed a number of foreign patients unable to pay their bills.
Hospitals are already supposed to charge patients living outside the European Economic Area for care such as hip operations or cataract removal, but this can be done by invoice, rather than upfront.
Details of treatment given to visitors from EEA countries should be forwarded to the Department of Health so the costs can be recouped from their governments.
But earlier last week, MPs on the Public Accounts Committee said the system for recovering costs from foreign visitors was “chaotic”.
Mr Hunt said: “We have no problem with overseas visitors using our NHS – as long as they make a fair contribution, just as the British taxpayer does.”
The health secretary said the aim was to recover up to £500m a year by the middle of this Parliament to reinvest in the NHS.
A report by the National Audit Office last October suggested that money raised next year would fall far short of this target.
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