You needed to pay that debt. The insurance company actually should have sent the money directly to the medical provider. If they are pursuing the debt through collections and you include it in your bankruptcy, it may not be discharged. You need to talk with a lawyer about what to do in this situation because if this occurred within a short time of filing bankruptcy, you may actually not be able to include it in your bankruptcy or the court and trustee will want to know where you spent the proceeds.