If it's any consolation, we had to do the tongue tie thing off of insurance away from the hospital like you. It felt shady. But also, circumcision wasn't covered in 2006 and the American pediatric association no longer considered it a medical benefit (though they held up their hands staying out of it for the question of "is it good for anything?"). I think it was done at the hospital, but nobody pressured us.

Our baby wouldn't breastfeed. We tried some things then "untied" his tongue (so thankful it didn't seem to cause him pain)... But he still wouldn't feed. It wasn't the solution. Finally found the right bottle that he could latch on to, but man we were getting nervous about malnutrition. He never would breastfeed. So maybe with your kid it would have turned out the same without the surgery anyways. Babies are weird. I wouldn't feel guilty about it!