Disputing a Medical Bill and Dealing with Medical Debt: A Practical Guide

Summary. The order of operations for a medical bill, from the envelope to zero.

Before anything: do not pay it yet

The instinct on receiving a large medical bill is either to pay it or to hide from it. Both are expensive.

Paying it forecloses the four reductions available — error correction, insurance appeal, financial assistance, and negotiation — and recovering money already paid is far harder than declining to pay it.

Hiding from it lets the clock run on appeal deadlines, financial assistance windows, and eventually a lawsuit.

The correct first move is neither. It is a phone call requesting an itemized bill, and a letter putting the account on notice that it is disputed. That costs a stamp, protects everything, and commits you to nothing.

Part one: the first thirty minutes

Collect the paper

You need three documents and one of them you have to ask for.

The provider's bill — what arrived in the mail.
The explanation of benefits from your insurer — which is not a bill, and which says so.
The itemized bill — which you must request, and which lists every charge with its billing code.

If you do not have insurance, you need the bill, the itemized bill, and the good faith estimate you should have received before scheduled care.

Request the itemized bill

Call the billing number, say: "I'm requesting a fully itemized bill with all CPT and revenue codes for account number ____." Ask for it in writing. Follow up in writing the same day, because phone requests evaporate.

While you have them, ask three more things:

"Please send a copy of your financial assistance policy and application."
"Please place a hold on collection activity while this account is under review."
"What is your cash or prompt-pay discount?"

The hold request is not always honored but is frequently granted, and it buys weeks.

Match the three documents

Sit down with all three and a highlighter.

Does the provider's bill match what the EOB says you owe? A very common failure mode is a provider billing the full charge before or instead of the insurer-allowed amount. If the EOB says patient responsibility is $340 and the bill says $2,900, the bill is wrong and the fix is a phone call.

Was the claim submitted at all? If there is no EOB, the claim probably never reached the insurer. Call the provider, verify the insurance on file, and ask them to submit.

Does the itemized bill match what happened? This is where the money is.

What to look for

Go line by line. You are looking for six things.

Duplicates. The same code on the same date, twice.
Services not rendered. A medication ordered and cancelled. A consult that never happened. A test you were told was cancelled.
Quantity errors. One unit billed as ten. Decimal errors are common and expensive.
Upcoding. A higher-level visit than the encounter supports. Emergency visits and office visits are leveled; a twelve-minute encounter billed at the highest level is worth questioning.
Unbundling. Components of a single procedure billed separately, usually visible as several related codes on the same date with modifiers.
Room and board on days not spent — including the discharge day, which many facilities do not charge.

Also check: charges for your own supplies (the CPAP you brought), charges dated before admission or after discharge, and charges for a different patient entirely, which happens more often than you would like.

Write down every question

You do not need to be right. You need to ask. A one-page list — "Line 47, revenue code 0636, dated 3/14 — what is this and where does it appear in the record?" — sent to the billing department in writing produces adjustments at a surprising rate, because the department has to look, and looking finds things.

Part two: the four reductions

There are exactly four ways a medical bill gets smaller. Do them in this order, because each affects the next.

Reduction one — correct the errors

Send the question list in writing. Ask for a written response. Ask for a corrected bill.

If the provider is unresponsive, escalate: the billing manager, then the patient advocate or patient relations office (almost every hospital has one), then the state attorney general's consumer division or department of health, depending on the state.

Reduction two — appeal the insurance denial

If the EOB shows a denial, the fight is with the plan, not the provider, and it runs on the plan's timeline. Internal appeal deadlines are commonly 180 days from the denial. Miss it and you generally lose the right.

The appeal that works has four parts:

A cover letter identifying the claim, the date of service, the denial reason quoted exactly, and what you are asking for.
The medical records relevant to the denied service.
A letter from the treating provider addressing the specific denial reason — not a general endorsement. If the denial says "not medically necessary," the letter must say why it was necessary for this patient.
The plan language you say entitles you to coverage, quoted from the plan document or summary.

After internal appeals are exhausted, most plans are subject to external review by an independent entity, and external reviewers overturn denials at meaningful rates. Ask for the external review form.

Full mechanics: appealing a health insurance denial and the health insurance appeal toolkit.

Reduction three — apply for financial assistance

Do this even if you think you earn too much. It is the single most underused right in this area.

Nonprofit hospitals are required to maintain a written financial assistance policy, to limit amounts charged to eligible patients to no more than amounts generally billed to insured patients, and to make reasonable efforts to determine eligibility before extraordinary collection actions like lawsuits, liens, garnishment, or credit reporting. The requirements come from 26 U.S.C. § 501 and its implementing rules.

Applications are typically two to four pages and ask for:

Income — pay stubs, tax return, benefit letters
Household size
Assets, sometimes
The account numbers at issue

Tips that matter:

Apply for every account — the hospital, the physician group, the anesthesia group, the lab, and the radiology group often bill separately and each may have its own policy.
Apply even if the account is already in collections. Many hospitals will pull it back.
If you are denied, ask why in writing and ask about partial assistance, which most policies provide well above the full-write-off threshold.
If your income dropped after the service, say so — many policies look at current circumstances.
Ask whether the hospital offers presumptive eligibility based on enrollment in other programs.

Reduction four — negotiate

Now, with a corrected bill and any assistance applied, negotiate the rest.

What to say: "I've reviewed the itemized bill and applied for financial assistance. I can pay $______ as full settlement. Can we resolve it at that figure?"

Reference points that carry weight:

The Medicare rate for the same codes — publicly available and typically far below chargemaster
The hospital's own published cash price under the price transparency rule
The negotiated rate the hospital accepts from commercial plans, which is in its published file
The prompt-pay discount most providers have and few mention

Rules for the conversation:

Make a specific offer, not a plea.
Offer a lump sum if you have one; providers discount heavily for immediate payment.
If you cannot, offer a monthly figure you can actually sustain — a defaulted plan often accelerates the balance and voids concessions.
Get the settlement in writing before paying. It must say the amount is accepted as payment in full, that the remaining balance will not be pursued, sold, or reported, and that any existing credit reporting will be deleted or updated.
Never give a collector electronic access to your bank account. Pay by a method you control.
Do not put it on a credit card. That converts favorable debt into unfavorable debt.

Part three: surprise bills

If the bill is from a provider you did not choose, work through this sequence.

Was it an emergency? Emergency services at an out-of-network facility or from an out-of-network provider are protected. You owe in-network cost sharing only.

Was it a non-emergency service by an out-of-network provider at an in-network facility? Protected. The anesthesiologist, the assistant surgeon, the pathologist, the radiologist.

Was it an air ambulance? Protected. A ground ambulance? Not by federal law — check your state.

Did you sign a consent form? For certain ancillary services — emergency medicine, anesthesiology, pathology, radiology, neonatology in the relevant settings — the protection cannot be waived, so a signature does not matter. For other services, the waiver is valid only if strict notice and timing conditions were met. Ask for a copy of what you signed and when.

The response, in order:

Do not pay.
Write to the provider: the services are protected, you owe in-network cost sharing, request a corrected bill.
Call the plan and ask that the claim be reprocessed at the in-network level.
If it is not resolved in thirty days, file complaints with the federal No Surprises Help Desk and your state insurance department.

The provider and the plan resolve the balance between themselves through independent dispute resolution. You are not a party to it and the outcome does not affect you. The framework is at 45 C.F.R. Part 149.

If you are uninsured and the bill exceeded the estimate

You were entitled to a good faith estimate before scheduled care. If the bill exceeds it by $400 or more, there is a federal patient-provider dispute resolution process. Deadlines are short. Ask the provider for the process and file.

Part four: when it goes to collections

The first letter

A collector must send a validation notice within five days of first contact. You have thirty days from that notice to dispute in writing, and a timely written dispute obligates the collector to cease collection until it obtains and mails verification.

Send the dispute. For medical debt it works unusually often, because medical accounts are sold in portfolios with almost no documentation.

Ask for:

An itemized statement of the debt
The name and address of the original creditor
Proof of assignment or purchase — the chain from provider to current holder
An accounting of payments, credits, interest, and fees
The date of first delinquency
Proof that the collector is licensed in your state, if licensing is required

Send it by a method that produces proof of mailing. Keep a copy.

The governing provisions are 15 U.S.C. § 1692g (validation) and § 1692e (false or misleading representations), with the regulation at 12 C.F.R. Part 1006.

The trap: partial payment on an old debt

In many states, a partial payment or a written acknowledgment restarts the statute of limitations.

A collector calling about a nine-year-old bill, offering a generous settlement, and asking for "just $50 today to hold the offer" may be attempting exactly this. Fifty dollars can revive a debt that was legally unenforceable that morning and expose you to a lawsuit on the full balance.

Before paying anything on an old debt: find out your state's limitations period, find out the date of first delinquency, and find out whether your state's rule revives on partial payment. If the debt is time-barred, say so in writing and pay nothing.

Things collectors may not do

Call before 8 a.m. or after 9 p.m. in your time zone
Call you at work after you tell them not to
Contact third parties about the debt beyond locating you
Misrepresent the amount, the legal status, or the consequences
Threaten action they cannot or do not intend to take
Continue contact after a written cease-communication request — though this does not eliminate the debt and may accelerate a lawsuit

Document violations: date, time, number, name, and what was said. Statutory damages plus attorney's fees are available, and consumer attorneys frequently take these cases on contingency.

Credit reporting

Medical debt is now treated differently from other consumer debt on credit reports — a waiting period before medical collections appear, removal of paid medical collections, exclusion of small balances, and reduced weighting in newer scoring models. The rules have been changing and continue to.

Pull all three reports. If a medical collection appears that should not, dispute it with the credit bureau, not only with the furnisher — the bureau's reinvestigation duty under 15 U.S.C. § 1681i is triggered by a dispute to the bureau. Furnisher obligations are at § 1681s-2.

Dispute in writing, attach documentation, and keep everything. See recovering from identity theft and fixing a credit report for the full dispute mechanics, which are the same.

Part five: the lawsuit

Answer it

The overwhelming majority of medical debt lawsuits end in default judgment because nobody answered. That single fact does more damage in this field than every other problem combined.

You typically have 20 to 30 days from service. The answer does not have to be sophisticated. It has to be filed.

What the answer should contain

Responses. Admit, deny, or state that you lack sufficient information to admit or deny — that last one is a complete and proper response, and it is the right one for anything you cannot verify.

Affirmative defenses, which are waived if not raised:

Statute of limitations, if the debt is old
Lack of standing — the plaintiff is an assignee that has not proven the chain of assignment
Failure to state a claim
Payment or accord and satisfaction
Failure to mitigate
Unconscionability / unreasonable charges — the reasonable-value defense, which is real where no rate was agreed and the plaintiff relies on chargemaster
Failure to comply with 501(r) — if the plaintiff is a nonprofit hospital that never made reasonable efforts to determine your eligibility for financial assistance before suing
Improper service
Identity — this is not my debt

A demand for proof. Make the plaintiff produce the contract or the basis for the charge, the itemized bill, the assignment documents, and the accounting.

Discovery is your leverage

Portfolio purchasers often cannot produce what you ask for. A set of written discovery requests — for the assignment chain, the original itemized bill, and the payment history — resolves a large share of these cases, either by dismissal or by a favorable settlement.

Full treatment: defending a debt collection lawsuit and the consumer debt defense toolkit.

If a judgment already exists

Check whether it can be vacated — improper service, excusable neglect, a meritorious defense. Deadlines are short and vary.
Claim your exemptions. Federal law caps wage garnishment and many states protect more. Social Security, SSI, VA benefits, and certain other federal payments are exempt, and a rule requires banks to protect a portion of recently deposited federal benefits automatically.
Keep exempt funds in a separate account. Commingling defeats the automatic protection.
File the exemption claim on time. Windows are short, and missing one forfeits protection you were entitled to.
Negotiate the judgment. Judgment creditors settle, especially where collection is difficult.

Bankruptcy

Medical debt is general unsecured debt, fully dischargeable in Chapter 7 under 11 U.S.C. § 727. There is no medical exception and no minimum amount. Filing triggers an automatic stay that halts garnishment and collection immediately.

Bankruptcy is not a failure and is frequently the correct answer where the debt exceeds any realistic ability to pay. Consult a bankruptcy attorney; most offer free consultations.

Part six: three bills, start to finish

A $19,000 bill that became $1,400

Oleander Prasad, a self-employed carpenter with a high-deductible plan, had a hernia repair at a nonprofit hospital. The bill was $19,200 after insurance.

Week one. She requested the itemized bill and the financial assistance policy, and asked for a hold on collections. She got all three.

Week two. The itemized bill ran eleven pages. Comparing it to the EOB, she found the hospital had billed a surgical assistant at the full charge rather than the allowed amount — a $2,300 difference — and had billed two units of an implant when the operative note described one. She wrote a one-page letter listing both, with line numbers and dates.

Week three. The hospital corrected the implant charge. It disputed the assistant charge until she attached the EOB page showing the allowed amount, at which point it corrected that too. New balance: $14,900.

Week four. She applied for financial assistance. Her income was above the full-write-off threshold but within the partial band. The hospital applied a 70% discount. New balance: $4,470.

Week six. She offered $1,400 as a lump-sum settlement, citing the hospital's own published cash price for the procedure. They countered at $2,000. She countered at $1,400 and said it was what she had. They took it.

Week seven. She got the settlement in writing — "accepted as payment in full, balance will not be pursued, sold, or reported" — before she paid, and then paid by check.

Elapsed time: about seven weeks, most of it waiting. Total effort: maybe six hours. Reduction: $17,800.

What made it work was doing the four reductions in order. Negotiating first would have negotiated against an inflated, uncorrected number without the assistance discount applied.

The bill that was not hers

Cassius Berhane received a collection notice for $3,750 from a hospital in a city he had never visited, for a date he had been at work three states away.

He did the right thing and it was not obvious: he did not call and argue. He sent a written dispute within thirty days demanding validation — the itemized bill, the original creditor, the assignment chain, the date of first delinquency, and the patient's identifying information used at registration.

What came back showed a date of birth one digit off from his and an address he had never lived at. It was a mismatched account — the collector had matched a name to the wrong person, which is common.

He then: sent a second letter stating the account was not his and demanding deletion; disputed with all three credit bureaus in writing, attaching the validation response; and, because the underlying registration used identifying information that was partly his, filed an identity theft report and placed a credit freeze.

The account was deleted. Had he simply called and said "that's not mine," there would have been no record of anything.

The old debt that stayed dead

Marguerite Delacroix-Hale got a call about $6,800 from 2015. The caller was warm, understanding, and offered to settle for $900 — with $75 today.

Her state's limitations period was six years. The debt was ten years old. Her state also revives on partial payment.

She asked for the caller's name, company, mailing address, and the account number, and said she would respond in writing. Then she sent a letter that did three things: disputed the debt and demanded validation; stated that she believed the debt was outside the statute of limitations and identified the approximate date of first delinquency; and stated that she was not acknowledging the debt and that nothing in the letter should be construed as a promise to pay.

That last sentence is the one people leave out, and it is the important one.

She heard nothing further.

Note the discipline: she did not deny owing it, argue about whether the care was good, or explain her circumstances. She disputed, demanded proof, raised limitations, and disclaimed acknowledgment. Four sentences.

Part seven: a calendar

Day 1–3

Request the itemized bill in writing
Request the financial assistance policy and application
Request a hold on collections
Do not pay anything

Week 1–2

Match the bill, the EOB, and the itemized bill
Build the error list with line numbers and dates
Confirm the claim was actually submitted

Week 2–3

Send the error list in writing; ask for a written response and a corrected bill
File the insurance appeal if there is a denial — watch the 180-day clock
Submit the financial assistance application, for every billing entity

Week 4–6

Follow up in writing on anything unanswered
Escalate to the billing manager, then patient advocacy
Once corrections and assistance are applied, make a specific settlement offer

Before paying anything

Get the settlement in writing: payment in full · not pursued, sold, or reported · credit reporting deleted or updated
Pay by a method you control

If a collector appears

Note the date of the validation notice — 30 days
Send the written dispute
Do not make any payment on an old debt until you check limitations and revival

If you are sued

Calendar the answer deadline the day you are served
File an answer with affirmative defenses
Serve discovery on the assignment chain and the itemized bill

If a judgment exists

Check whether it can be vacated
File exemption claims immediately
Move exempt funds to a separate account
Negotiate

Part eight: the sentences that do the work

Most of this guide can be compressed into things to say. Here they are.

To the billing department: "I'm requesting a fully itemized bill with all CPT and revenue codes, a copy of your financial assistance policy and application, and a hold on collection activity while the account is under review."

About a charge you do not understand: "Line 47, revenue code 0636, dated March 14 — what service is this, who ordered it, and where does it appear in the record?"

About financial assistance: "May I have a copy of your financial assistance policy and an application?" — not "can you help me with this bill?"

When told you earn too much: "Does your policy provide partial assistance above the full-write-off threshold? My income changed in ___. May I have the denial in writing?"

Negotiating: "I can pay $____ as full settlement. Your published cash price for this procedure is $____ and the Medicare rate is $____."

Before paying a settlement: "Please send that in writing, stating that this amount is accepted as payment in full and that the balance will not be pursued, sold, or reported."

To a surprise-billing provider: "These services are protected from balance billing. I owe in-network cost sharing only. Please send a corrected bill."

To a collector, in writing: "I dispute this debt and request validation, including an itemized statement, the original creditor, proof of assignment, an accounting, and the date of first delinquency."

About an old debt: "I believe this debt is beyond the statute of limitations. I am not acknowledging the debt, and nothing in this letter should be construed as a promise to pay."

In an answer to a lawsuit: "Defendant lacks sufficient information to admit or deny and therefore denies." Plus every affirmative defense that might apply.

Part nine: what not to do

Do not pay first and dispute later. Recovery is far harder than refusal.
Do not ignore it. Deadlines run whether you open the envelope or not.
Do not put it on a credit card, a medical credit card, or deferred-interest financing. You are converting the most favorable debt in consumer law into the least favorable.
Do not make a partial payment on an old debt without checking limitations and revival.
Do not give a collector electronic account access.
Do not agree to a payment plan you cannot sustain.
Do not sign a consent to out-of-network billing at registration.
Do not sign as "responsible party" for another adult — write "as agent only" or decline.
Do not pay a settlement before you have it in writing.
Do not assume you earn too much for financial assistance. Apply.
Do not skip the answer to a lawsuit. It is the single most expensive omission available in this entire field.

Part ten: situations with their own rules

Emergency room bills

An emergency department visit usually produces at least two bills and often five — the facility, the emergency physician group, radiology, pathology, and the lab, each a separate entity with separate billing, separate network status, and separate financial assistance policies.

Apply to all of them. People apply to the hospital, get a write-off, and pay the physician group in full because they did not realize it was a different company. Ask the hospital: "Which other entities will bill me for this visit, and what are their names?"

Check the visit level. Emergency visits are billed at five levels of complexity, and a level 5 on a low-acuity encounter is one of the most common upcoding patterns.

Ambulance bills

Ground ambulance is the largest remaining gap in surprise billing protection. Federal law does not cover it; a growing number of states do. Steps:

Check whether your state has a ground ambulance balance billing law
Find out whether the service is municipal or fire-district operated — public services frequently have hardship or resident-rate policies that are never advertised
Ask for the itemized bill; mileage and "advanced life support" designations are frequently wrong
Negotiate. Ambulance providers settle at high rates
If your plan denied it as non-emergency transport, appeal with the run report attached

Anesthesia bills

Anesthesia is billed in time units plus base units, which means a bill can be checked arithmetically. Ask for the anesthesia record showing start and stop times, and confirm the units billed match. Anesthesia is also a protected specialty under the surprise billing rules in the relevant settings — the protection cannot be waived by consent.

Lab and pathology

Specimens are often sent to outside laboratories the patient never hears of. If a lab bill appears from a company you do not recognize, ask the ordering provider who they send specimens to and whether an in-network option exists. For future care, you can often direct where specimens go — a request that costs nothing and saves a great deal.

Imaging

The largest price variation in American health care. A freestanding imaging center's cash price for an MRI is routinely a fraction of a hospital outpatient department's. If a scan is scheduled and not urgent, ask what it costs at the hospital and what it costs elsewhere, and compare the cash price against your coinsurance.

Bills for a child

Both parents may be liable under state law regardless of what a custody order says. A divorce decree allocating medical expenses binds the parents to each other; it does not bind the provider, which can pursue either one. If you are pursued for expenses the decree assigns to the other parent, pay or negotiate to protect your credit, then enforce the decree in family court.

Bills after a death

The estate owes the debt; heirs generally do not. Do not pay a deceased relative's medical bills from personal funds, and be careful about paperwork — a family member who signed as "responsible party" at admission may have assumed personal liability. A handful of states retain filial responsibility statutes that are rarely but not never enforced. See probate and estate administration.

Bills arising from an injury

If someone else is liable, the provider or the health plan may assert a lien or subrogation claim against your recovery. Do not let a provider bill you directly when a liable insurer exists, and do not settle a personal injury case without resolving the liens — an unresolved lien can consume a settlement entirely.

Bills during pregnancy and childbirth

Delivery generates a global obstetric charge plus separate facility, anesthesia, newborn, and sometimes neonatology bills. Add the baby to your insurance within the enrollment window — commonly 30 days — or the newborn's charges are uninsured. Ask the obstetric practice for its global fee arrangement in writing before delivery.

Dental and vision

Generally outside health insurance entirely, and outside the surprise billing framework. Dental treatment plans are negotiable, and dental schools and community health centers provide substantially discounted care.

Behavioral health and substance use treatment

Denials of residential and intensive outpatient treatment are common and frequently reversed. Federal parity requirements mean plan limits on mental health and substance use benefits generally may not be more restrictive than those on medical and surgical benefits — including non-quantitative limits like prior authorization and network adequacy. Raise parity explicitly in the appeal. See navigating a mental health crisis and commitment hearing.

Medicare and Medicaid patients

Providers accepting Medicare assignment must accept the approved amount as payment in full and may not balance bill beyond the applicable cost sharing. Medicaid providers generally may not bill enrollees for covered services at all. A Medicaid enrollee receiving a bill for a covered service should not pay it — contact the state Medicaid agency. Watch also for observation status, which affects skilled nursing facility coverage under Medicare.

Veterans

Community care authorized by the VA should be billed to the VA, not the veteran. Veterans nonetheless receive these bills routinely. Do not pay — contact the authorizing VA facility and the community care office. See filing and appealing a VA disability claim.

Part eleven: keeping the file

Everything in this guide depends on being able to prove what happened, and the proving happens months later when memory has gone. The filing system that works is boring and takes ten minutes to set up.

One folder per episode of care, not per bill. A single hospitalization generates bills from five entities over eight months; they belong together.

Inside it, four things:

A one-page log. Every call: date, time, who you spoke with, their title, what they said, and what they promised. Every letter: date sent, method, what it asked for. This page is the most valuable object in the folder.
The paper, in date order: bills, EOBs, the itemized bill, the good faith estimate, denial letters, appeal submissions, financial assistance applications and decisions, settlement agreements.
Deadlines, written at the top of the log: the appeal deadline, the validation deadline, the assistance application deadline, the answer deadline.
Proof of mailing for anything sent.

Photograph or scan everything the day it arrives. Paper gets lost during the exact months you cannot afford to lose it.

Put the deadlines in a calendar with a reminder a week ahead. Every right in this guide has a clock, and the clocks are the whole game.

Part twelve: an honest word about time and energy

This guide asks a person recovering from illness or injury — often while short of money and short of sleep — to become a part-time claims administrator. That is a real cost and it should be named.

Two things make it bearable.

First, the sequence is short. Four requests in the first week (itemized bill, assistance policy, collection hold, cash price), one comparison, one letter, one application. That is most of the work, and it is front-loaded. Everything afterward is waiting and following up.

Second, the leverage is enormous. Very few activities available to an ordinary person return several thousand dollars for six hours of work. This is one of them. The hourly rate on reviewing a hospital bill is, for most people, the best they will ever earn.

If you genuinely cannot do it — and sometimes you cannot — the people who will help, free, are: the hospital's own patient advocate, a local legal aid office, the state attorney general's consumer division, the state insurance department for anything involving a plan, a SHIP counselor for Medicare issues, and a navigator or certified application counselor for marketplace coverage. Ask one of them. What you should not do is nothing, because doing nothing is the one path with no good ending.

Frequently asked questions

How long do I have? Insurance appeal: commonly 180 days. FDCPA dispute: 30 days from the validation notice. Good faith estimate dispute: a short federal window. Lawsuit answer: 20–30 days. Financial assistance: often 240 days from first billing, sometimes longer. Every one of these forfeits a right.

Will disputing hurt my credit? No. Disputing is a right, and a disputed account must be reported as disputed.

Should I use a medical bill advocate? Sometimes. They typically charge hourly or a percentage of savings. For a very large or complex bill, they earn their fee. For an ordinary bill, the four steps in this guide are what an advocate would do.

The hospital says the bill is final. Ask who has authority to approve a settlement, and ask for the financial assistance policy in writing. "Final" is a negotiating position.

Can I be denied care? Emergency care, no. Non-emergency care, a provider generally may decline to schedule, though state law and nonprofit emergency care policies constrain this.

They're threatening to sue. Take it seriously and respond. Apply for financial assistance immediately, and if the plaintiff would be a nonprofit hospital, put in writing that no eligibility determination has been made.