Am I completely wrong in how I am handling this?

In Oct 1999, I had some lab work done at a hospital for a bone marrow donation workup. I submitted my insurance information at the time of the procedure. I never heard anything more about the matter, so I assumed the hospital submitted the claim to my insurance company and that the bill was paid. In Oct 2003, I received a bill from the hospital saying that I needed to pay the full balance on the account ($1100). I called my insurance company and they stated that not only am I past the 1year time frame for coverage - but that the hospital had never submitted a bill to them for reimbursement. I called the hospital billing dept -> answering machine -> never rec'vd a call back, so i wrote the hospital a letter disputing the bill. Their reply was a letter thanking me for my partial payment, and that I needed to pay off the balance immediately. I wrote them again, saying that i am disputing the bill, and wondering if they had mixed up accounts since I had never made a payment, and will not until they explained to my satisfaction. They never replied - they submitted it to a collection agency - who promptly contacted me for payment. I have explained to two different collection agencies (NCO / RMA) the above circumstances. Each one has sent me a letter stating that they are closing the file. Now, I have a 3rd agency (MAF) who for the past two years has not only continued to pursue this matter, but has just sent me a letter stating that my account is being reveiwed for legal action. I ask them to validate the debt, and all I receive are copies of the lab work bills. What should I do know? Should I just give up and pay the money? How can they wait four years and then decide to bill me?