Dude....screw them. lol That was stupid on their part. There are a couple of things you can do:
You can screw with the CA a bit if you want........send them a letter threatening complaints and violations if they continue reporting the TL. There cannot be "terms" or a "past due" amount when you've never had a contract or payment agreement with them. So you could let them know that you are aware of their violations and wish to settle this amicably.
Each violation is worth 1k.
OR since it's a medical bill go the HIPAA route.......then they don't get a penny (your money will go to the healthcare provider) and it still gets deleted. This process takes a little longer but it does work.