The most common and most likely answer to this crossword clue is the 7 letter word TOUCHED
I've seen this crossword clue in The Times
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More clues leading to the result TOUCHED
Buddy explains!

The straight part
We know that "Mad" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case mad = touched.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does TOUCHED mean?
TOUCHED adjective- Emotionally moved (by), made to feel emotion (by).
- Slightly mentally deficient; touched in the head.