is this legal?

i don't know what else to do. In Oct 1999, I had lab work done at a hospital as part of a bone marrow donation evaluation. I submitted insurance information at the time of the procedure. I never heard anything more, so I thought everything had been handled. Well, In Oct 2003, I received a bill from the hospital stating that they expected prompt payment ($1,100). I sent them a letter stating that I disputed this bill and that I have no idea what they are talking about. I also called my insurance company who said that not only could I not file because it was way past the 1year cut-off, but that the hospital itself had never filed a claim. The next letter that I got from the hospital was a letter thanking me for my partial payment and that I needed to pay the balance now. I wrote them again saying that not only had I never made a payment, but I wanted them to verify that this wasn't an account mix-up. You guessed it. I never heard from the hospital again as they sent it to collection agencies. The first two collection agencies (NCO / RMA) I disputed the debt and they closed the files rather than continue. However, this 3rd agency (MAF), after two years of trying to get them to validate this debt (all I receive are copies of the original bills), have now sent me a letter stating that my account is being reviewed for legal action. Can they do this? Should I just give in and pay the money? Is this legal after all this time?