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It is not correct that the collection agency cannot negotiate the bill, but how much they can negotiate can be limited by their contract with the medical group. However, you can also contact the medical group and seek to negotiate the bill with them, which likely includes a fee for late payment or non-payment. The collection agency's job is to collect as much as possible on the bill because they are getting paid based on what they collect. You have to be persistent with the collection agency and make them a solid offer of settlement (usually starting at about 33% less than you are willing to ultimately pay when you are done negotiating and then work your way up).
You should call the medical group first and try to negotiate with them. Many times they play the game that they cannot do anything because it is with the collection agency and you need to tell them all you want them to do is bill you correctly according to what your insurance company said the bill is. At the same time, you need to call the collection agency and make them an offer to settle and take your time and be persistent with them, do not just take their word for what they want to settle for and keep on them.
If they will not settle and you cannot reach an agreement, then you may need to use a local consumer protection attorney to try to negotiate this debt with them.
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