The working paper outlines areas where PFM systems and rules are crucial for the effective implementation of health financing policy to achieve UHC (Universal Health Coverage) and offers guidance for improving alignment. Many of the steps toward improving alignment between PFM systems and health financing policy are considered good PFM practices in general, such as policy-based budgeting and programme-based budget classification. However, specific measures may be called for to address particular needs of health budgeting, such as allowing pooling of health funds across different revenue sources, providing mechanisms for intergovernmental transfers to improve equity, allowing payment to health care providers through output-based payment methods and giving providers the flexibility to manage their resources and deliver services in a responsive way.