Tata AIG General Insurance has become the third insurer after Star Health and Niva Bupa to end its cashless settlement arrangement with Max Hospitals, forcing policyholders to pay upfront for their treatment amid a widening rift between insurers and hospital chains.
Tata AIG’s decision, effective September 10, centres on tariffs.
“Max Healthcare and TATA AIG General Insurance Company had negotiated, renewed, and signed a two-year tariff agreement effective from January 16, 2025, until January 15, 2027. However, in July 2025, TATA AIG abruptly sought a meeting and demanded further rate reductions. They unilaterally proposed a downward revision of the agreed tariffs and threatened to suspend cashless services. When we did not accept it, cashless services at our hospitals were suspended effective September 10, 2025," Max Healthcare spokesperson said on September 26 in response to Moneycontrol’s queries.
“There was no tariff dispute with Tata AIG. We believe that any further reduction is unviable and could compromise patient safety and the quality of care. To support patients, Max Healthcare has set up an express desk to help them claim reimbursements from insurers without having to make upfront payments at Max Hospitals."
How will policyholders’ claim settlements be addressed? "TATA AIG has put in place special arrangements to ensure that our customers face absolutely no inconvenience. All claims are being prioritised and fast-tracked, allowing policyholders to continue receiving uninterrupted and seamless access to treatment and care. Our dedicated service teams are monitoring every case closely to provide complete support and ensure zero disruption for our customers," said Tata AIG spokesperson.
Earlier, several Association of Healthcare Providers of India (AHPI) member hospitals, including large tertiary care chains, found themselves in a spot after Star Health suspended cashless services, leaving hospitals to manage distressed patients.
According to AHPI, the suspension was carried out in an “arbitrary manner” across hospitals such as Care Hospitals (Ramnagar, Vizag), Manipal Hospitals (Delhi and Gurugram), Max Hospitals (North India), Metro Hospital (Faridabad), Medanta Hospital (Lucknow), Rajiv Gandhi Cancer Hospital (New Delhi), Sarvodaya Hospital (Faridabad), and Yatharth Hospitals.
After talks, they decided to restore cashless services at AHPI member hospitals from October 10.
AHPI had advised its member hospitals in the north to withdraw cashless treatment facilities for policyholders of Bajaj Allianz General Insurance starting September 1 but the matter was resolved.
These episodes highlight the ongoing friction between insurers and healthcare providers over cashless arrangements, though recent resolutions indicate a willingness to collaborate.
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