Debt Paid by Insurance Company

Hi,

I have a big problem. I recently noticed an item on my credit report for an unpaid medical bill. It dropped my FICO score by 50 points and I am trying to buy a house. I called the collection agency and found out it was a doctor billed which an insurance company was supposed to pay out of a liability settlement in 2006. The doctor did not bill it correctly and then did not notify me and sent it to collection. So I got a copy of the bill, called the insurance company which paid it immediately. When I called the CA the woman there was very rude and told me that this item would not be removed for any reason. I then contacted the Doctor's office who said they would ask the CA to remove it. The CA told them it would be done. Now 3 months later the CA is reporting it as paid but refusing to remove it. They will not answer phone calls. I got a letter from the Doctor asking that it be removed and sent it to the Credit Bureau and disputed it. The CB verified the collection as accurate so I disputed it a second time asking them to contact the original creditor and the CB answered that my request was frivolous??? How can the CB not remove the item, when the original creditor has asked them too? What other options do I have besides suing? Thanks for any help.