I feel for you, but:
#1. You should never ever let someone else call your insurance company, unless it's someone in the doctor's office - that's YOUR responsibility. That rep had to have private information about you that you should not let a stranger have. There is no telling what else she'll do with the information.
#2. I simply would not pay the bill. Tell the collection agency to kiss your ass, and if they insist on harassing you, you will contact your lawyer and they can talk with him/her.
