Tata AIG Suspends the cashless services with Max hospitals

1. Current Situation

• Tata AIG General insurance has also joined the other three big health insurers in suspending cashless facilities at Max Hospitals.
• This is after similar moves by Star Health, Niva Bupa and Care Health.

2. Scope of Suspensions

• Star Health and Niva Bupa: Unpaid services in all 22 Max Hospitals throughout the country.
• CARE Health: Suspended only Max Hospitals in the Delhi-NCR area.

3. Background & Cause of Dispute

• Prior Agreement: Max Healthcare and Tata AIG had already negotiated and signed a two year tariff agreement which was to become effective as of January 16, 2025, which was to continue through January 15, 2027.
• Renegotiation Demand: Tata AIG unexpectedly asked to have a meeting in July 2025 to demand additional service rates reductions, which seems to have been the impulse behind the suspension.

4. About Tata AIG

• It is a Tata-American International Group (AIG) (49% and 51% stake respectively) joint venture.

Policy implications:

• These insurers will require customers to pay their medical bills directly at Max Hospitals and later request their insurance companies to reimburse them instead of paying through the convenient cashless service. This is a case of persistent business conflicts between hospital chains and insurers over the cost of treatment.