National Health Fund: the main rules

The National Health Fund (FNS) is the main financial management instrument of Brazil’s public health system. Through it, the federal government makes regular transfers to states, municipalities and the Federal District to enable the decentralized delivery of public health actions and services.

In this article, learn where the FNS’s resources come from and how they are allocated, how transfers work and how health plans reimburse the system.

What is the National Health Fund?

The National Health Fund is the financial manager of federal resources earmarked for the Unified Health System (SUS). It funds the expenses of the Ministry of Health, its bodies and the direct and indirect administration entities that make up the system.

Established before the SUS, by Decree No. 64,867 of July 24, 1969, the FNS was created to give specific treatment to the financial administration of public health in Brazil. Since the 1988 Constitution, it has been the main mechanism for operating the federal funding of the then newly created SUS.

In addition to executing the budget, the FNS serves as a planning, management and control instrument, with ongoing monitoring of how public health resources are applied.

Where do the Fund’s resources come from?

The National Health Fund’s resources come from different sources provided for by law. The main ones are:

• Resources from the Federal General Budget earmarked for the Ministry of Health, including funds allocated through congressional amendments (individual, state caucus and committee amendments).

• A share of the revenue from SPVAT insurance, under Supplementary Law No. 207/2024 (as amended by Supplementary Law No. 211/2024). The amount allocated to the FNS is set by an act of the Executive Branch and used exclusively to fund medical and hospital care for traffic accident victims.

• Minimum health spending set by Article 198 of the Federal Constitution, which establishes that the federal government must apply at least 15% of its net current revenue (RCL) to public health actions and services each year.

• Reimbursements paid to the SUS by health plans when their members use services provided by the public network or contracted providers.

How are the FNS’s resources allocated?

The National Health Fund’s resources go to both operating costs and investments in health.

Since 2017, federal transfers have been reorganized into two major funding blocks, with the goal of simplifying management and expanding the autonomy of states, the Federal District and municipalities.

• The funding block for public health actions and services is intended to maintain existing SUS activities, including funding for primary care, health surveillance, pharmaceutical services and medium- and high-complexity outpatient and hospital services.

• The investment block for the public health services network is aimed at expanding and upgrading the system’s infrastructure, covering the construction, renovation and expansion of health facilities, as well as the purchase of health equipment and technologies.

Spending must follow the annual programs and the resolutions of the health councils, ensuring alignment between planning and financial execution.

FNS transfer rules

The National Health Fund transfers resources to states, municipalities and the Federal District through different mechanisms:

• Fund-to-Fund Transfers (FAF);

• Agreements;

• Cooperation terms and transfer contracts.

Fund-to-Fund transfers are the most common. Under this mechanism, resources are transferred directly from the FNS to the Health Funds of the other levels of government, regularly and automatically, with no need for an agreement, as long as the federative entity keeps its health councils and health plans up to date.

These resources must be held in specific accounts at an official financial institution until their final use.

Reimbursement by health plans

The National Health Fund does not make direct transfers to health plans. The financial relationship takes place through Reimbursement to the SUS, provided for in Law No. 9,656/1998 and operated by the National Supplementary Health Agency (ANS).

The process works as follows:

1. Identification: the ANS identifies care provided in the public network to members of private plans by cross-checking DATASUS data against payers’ member records.

2. Notice (ABI): the health plan is notified through an Identified Plan Member Notice (ABI).

3. Defense and collection: the health plan can file an administrative defense. If the charge is confirmed, the ANS issues a Federal Collection Form (GRU).

4. Allocation: the funds collected do not go directly back to the health facility that provided the care. Under current law, the full amount collected is credited to the National Health Fund, which redistributes it according to the Ministry of Health’s priorities, with the aim of balancing the system nationwide.

Conclusion

Understanding how the National Health Fund works is essential for managers, health professionals, oversight bodies and citizens interested in how the SUS is funded.

Knowing where the National Health Fund’s resources come from, how they are allocated and how to track transfers allows for greater transparency and better use of the public resources earmarked for health.