Last year the government's compensation recovery unit (CRU), now part of the Department of Work and Pensions, handled 460,097 claims and recovered£121.5m for hospitals.
From next January, it will extend its remit to cover the treatment costs of victims of injury in the workplace, potentially bringing a further£150m into the NHS.
But ministers said the initiative was not just about money, but about the principle of ensuring employers took responsibility for their actions.
Health minister Andy Burnham said: 'Although this scheme will undeniably raise useful additional sums of money for hospitals, it is not simply about raising more cash. It is based on the legal rights of the NHS and the responsibilities of those to blame.'
Mr Burnham said it was 'unacceptable that taxpayers have to pay for the medical treatment of someone injured at work because employers fail to protect their workforce.'
The policy is designed to encourage employers to take steps to prevent employees being injured and when implemented should increase the total recouped each year to around£300m for the NHS.
Mr Burnham added that 'the scheme will not introduce any more extra regulations for businesses'.
The announcement came as an ex-policeman who set up a business recovering money owed to the NHS by insurance companies announced his intention to sue the government for putting him out of business.
Frank Adlam set up the National Road Traffic Accident Claims Centre in 1992. He went on to advise the government of the potential to recover up to£100m a year. But in 1999 the government effectively nationalised his business through the Road Traffic (NHS Charges) Act 1999 and created a civil service unit to collect fees.
Mr Adlam is now seeking information from the government about how the decision was made. He told HSJ he planned to take the government to court once he has exhausted the Freedom of Information Act process.
'It's the injustice of it all that hurts,' he said. 'If it had gone out to tender and we had lost that would have been another story. But they broke all the rules.'
A Department of Health spokesperson said: 'The DoH decided to use the CRU to reclaim NHS costs in the RTA scheme. Using the CRU meant that the shortfall of funds to the NHS could be made good as quickly as possible for the benefit of patient care.'