Tata AIG General Insurance has suspended its cashless settlement arrangement with Max Hospitals, effective September 10, 2025. This move comes after a dispute over tariffs, with Tata AIG seeking further rate cuts and Max Healthcare refusing to comply. The hospital chain had signed a two-year tariff agreement with Tata AIG, but the insurer requested additional reductions in July, threatening to suspend cashless services if its demands were not met.
As a result, policyholders will now be required to pay upfront for medical treatment at Max Hospitals and then seek reimbursement from Tata AIG. Max Healthcare has set up an express desk to support reimbursement claims and ensure that patients are not inconvenience. The hospital chain has stated that further rate reductions would be “unviable” and could compromise patient care.
Tata AIG has assured its customers that it has made special arrangements to ensure they face no inconvenience. The insurer has prioritized and fast-tracked claims, allowing policyholders to continue receiving uninterrupted treatment and care. Tata AIG’s dedicated service teams are monitoring every case closely to provide complete support and ensure zero disruption for customers.
This dispute is not an isolated incident, but rather part of a wider industry flashpoint between insurers and hospitals over tariffs and settlement terms. Earlier, Star Health had suspended cashless services at several hospitals, including Manipal, Medanta, and Max, sparking criticism from the Association of Healthcare Providers of India (AHPI). However, after negotiations, Star Health and AHPI member hospitals agreed to restore cashless services. Similarly, a standoff between AHPI hospitals in north India and Bajaj Allianz over cashless withdrawals was resolved earlier this month. The suspension of cashless services by Tata AIG is the third such incident, following Star Health and Niva Bupa, highlighting the growing tensions between insurers and hospital chains.