I am being sued for an old medical bill that my insurance should have covered what are my options

Went to IN hospital for a H attack, June 05. I received the bill there were errors for oxigen on two days I did not receive it. After calling and questioning the bill, they said it would go to auditing dept and that I could get a 20% discount for paying cash. I asked if I could wait till the audit was complete before paying and was told yes. Called back after a month. Audit wasn't complete. I asked if I needed to do anything further and they said no they would contact me. Never heard back for over a year and received a collection notice from a collector. I told them the bill should have been audited. They said I would have to contact the hospital. I did and told me they would call back the bill from the collection company. I told them who I prev. spoke to and they said they didn't exist and they had a new billing company. I resubmitted (faxed) my concerns over on the bill. Never heard back and called 2 times. Now being sued. What can I do? I live in MI. Have not been served.