NHS trusts will have a legal duty to check whether overseas patients are eligible for non-urgent care and to charge upfront, Jeremy Hunt has announced.
The move means anyone flying to the UK for non-urgent treatment such as a hip operation or cataract removal could now be turned away unless they agree to pay the NHS bill.
People needing urgent care will still be treated immediately on the NHS, but can be invoiced - as at present - if it is found they are not to be eligible for free care.
They will also be told upfront that their care is chargeable before treatment begins.
The announcement comes after a swathe of headlines about so-called "health tourists" using the NHS, and the BBC documentary Hospital, which has featured overseas patients who are unable to pay their medical bills.
One Nigerian mother, Priscilla, who gave birth to quadruplets, two of whom died, now owes the NHS nearly £500,000.
Under the new plans, she would still have received urgent treatment as her life and those of her babies were at risk.
While is unclear how many patients come to English hospitals for planned, non-urgent care, the Government hopes that forcing hospitals to have discussions with patients upfront will change a culture where people are invoiced after their care has already begun.
The Health Secretary 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.
"So today we are announcing plans to change the law which means those who aren't eligible for free care will be asked to pay upfront for non-urgent treatment.
"We aim to recover up to £500 million a year by the middle of this Parliament - money that can then be reinvested in patient care."
Other possible scenarios where an overseas patient would be charged upfront include where a GP has referred them to hospital to diagnose a condition and payment is agreed before treatment starts.
It will be up to individual NHS trusts to work out whether they take a payment there and then - or allow patients to sign a form to agree to a longer-term payment plan.
Patients will also be able to choose not to have the treatment if they have no means of paying the bill.
Some trusts will check eligibility through asking people to produce two forms of identification - such as a passport and a utility bill with a UK address. It will be up to individual trusts to work out how best to check eligibility.
The law will change from April this year and will also require hospitals and NHS bodies to identify and flag up a patient's chargeable status so that other parts of the NHS can more easily recoup costs.
Dr Kathy Mclean, executive medical director at NHS Improvement, said: "This new approach will enable NHS hospitals to devote more time and resource to treating patients rather than chasing money they are owed. It will mean that more money is available to the NHS to care for patients and to continue to provide world class facilities.
"However, this won't change the fact that, in an emergency, everyone will still have access to the urgent care they need."
Peterborough and Stamford Hospitals NHS Foundation Trust is already piloting a scheme where patients have to show two forms of identification - such as a passport or birth certificate and a utility bill - for non-urgent care.
Stephen Graves, chief executive officer at the trust, said: "Since implementing our policy, we have seen an improvement in our hospitals. The funds recouped are invested back into the system to benefit patients and our approach has not been to the detriment of the high quality patient care and patient experience we are able to provide.
"There has not been any impact on the number of non-UK residents coming through the system for treatment but we do now identify non-eligible patients sooner, and at a higher volume than previously."
Under the plans, anyone from outside the European Economic Area (EEA) who is staying in the UK for longer than six months will also not be eligible for free fertility treatment on the NHS.
A report out earlier this month from MPs said the system for recovering cash from overseas patients was "chaotic" and urged the Government to "get a grip".
It said the NHS was failing to identify patients who should be charged, while the Government was also failing to get money back from European countries where reciprocal agreements are in place.
The Government has a target to recover up to £500 million a year by 2017/18 from all overseas patients, though it is widely expected to miss this.
Some £289 million was charged to all overseas patients in 2015/16, though not all this will be recovered. At the moment, trusts collect only around half of the amounts they invoice.
In December, Freedom of Information responses from 104 trusts obtained by the Press Association revealed overseas patients have left the NHS with an unpaid bill of almost £30 million in 2015/16.
There are also historical debts. In London, Barts is owed £10,340,322 from the past four years, while Imperial College Healthcare NHS Trust is owed £5,509,733.
Guy's & St Thomas' NHS Foundation Trust and London North West Healthcare NHS Trust are also owed around £5m each for the past four years.