I was sent a $500 medical bill because the lab supposedly used the wrong billing codes and my insurance wouldn't cover it. I kept calling the lab, hospital, and insurance, and they all kept telling me to have the other person resubmit stuff. This went on for months while supposedly my bill was on hold. Eventually I found out that the billing codes weren't wrong, the test wasn't cover, and I did in fact owe that money. The next day I got a letter from collections saying I could pay it off for like $120 (apparently they didn't actually hold it like they said). I paid it, and it never showed on my credit report.
So my advice is to not pay. Eventually they'll settle for less.