Tata AIG Joins Star Health, Niva Bupa, Care Health In Suspending Cashless Facility At Max Hospitals

Tata AIG Insurance policyholders may face a crunch at Max Hospitals as the insurer joins Star Health, Niva Bupa, and Care Health in suspending cashless claim settlements for the major hospital chain.

While Care Health has only suspended these services for Max Hospitals in the Delhi-NCR region, Star Health, Niva Bupa, and Care Health have suspended claims for all 22 of their hospitals across the country.

Reports state that Tata AIG's decision is based off of a tariff dispute with Max Hospitals.

A Max Healthcare spokesperson responded to Money Control's queries and said, "Max Healthcare and Tata AIG General Insurance Company had negotiated, renewed, and signed a two-year tariff agreement effective from Jan. 16, 2025, until Jan. 15, 2027."

The statement added that in July 2025, Tata AIG demanded further rate reductions after calling for an abrupt meeting, "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 Sept. 10, 2025."

Earlier in September, Star Health's cashless settlement facility also found itself suspended, but for broadly different reasons.

On Sept. 12, the Association of Healthcare Providers – India (AHPI), said that it issued a formal communication to Star Health Insurance, warning the company of potential withdrawal of cashless services for its policyholders.

Persistent issues faced by member hospitals with the insurance provider include continued refusal to revise tariffs for several years in line with prevailing healthcare cost inflation, pressure to further reduce outdated tariffs, unjustified deductions from hospital bills and claim rejections post final approval, stated a release from AHPI.

"AHPI and its member hospitals are left with no choice but to withdraw cashless services for the policyholders of Star Health Insurance, effective from Sept. 22, 2025, unless Star Health Insurance takes definitive steps to address the concerns expressed by member hospitals in a timely manner," it said.

This decision follows repeated complaints from member hospitals regarding Star Health Insurance’s questionable practices, according to the release.

Previously, the association had called for the withdrawal of cashless services of Bajaj Allianz General Insurance Company. The instructions were later withdrawn, following talks between the association and the company.