. The Implementation of National Health Insurance (NHI) has been started in Indonesia since 2014. BPJS Health has been appointed as the organizer of NHI and First-rate Health Facilities as the implementers of NHI. In its implementation, FRHF will obtain direct payment from BPJS which will be paid in advance without taking into account the type and amount of health services provided known as NHI capitation fund. The utilisation and management of NHI capitation funds by FRHF municipal government of Kotamobagu in its implementation encountered several obstacles that impact on health services. The purpose of this research is to analyze the implementation process of utilization and financial management of NHI capitation fund by FRHF municipality and to analyse any constraints encountered in the implementation of utilisation and management of NHI capitation fund by FRHF Kotamobagu. This research is a qualitative exploratory study. The object of this research was the local government of Kotamobagu and its BPJS Health office. Data were obtained through in-depth interviews, observations, and documentation studies. The informants were selected purposively in order to obtain the correct and accurate information. Interviews were conducted using semi-structured in-depth interviews. The triangulation method was used in testing the validity or credibility of data or sources. Transcribed data from interview result was analyzed by using the content analysis method and then giving themes/coding and finally by conceptualisation. The results of the interpretation are summarised in the narrative text. The result of the research shows that the process of implementation and administration of financial utilisation of NHI capitation fund by FRHF in Kotamobagu has been implemented in accordance with regulation/guidance. Budgeting process of capitation fund of NHI, FRHF of Kotamobagu is centralised at Health Service Agency and included in Budget Implementation Document (BID/DPA) of Health Service Agency along with another Health Service Agencies' BID. The accountability of the financial management condition of NHI capitation funds is based on presidential regulation number 32 Year 2014 and rules from the Minister of Home Affairs number 900/2280/SJ Year 2014. During the implementation of the NHI capitation fund program in FRHF, several obstacles were found namely communication issues, human resources, disposition or attitude and bureaucratic structure.