I have a XXXX debt with a hospital in NY state. Due to several other XXXX debts incurred at the same date and time, I was unable to enter into a payment agreement at an amount the hospital requested. They accepted lower monthly payments but stated since they could not create a payment plan for that amount they sent the debt to a collector. Is that allowed even though I have been making payments on the debt to the hospital? 
Also, now that I am able to pay and would like to start a formal payment plan, the hospital staff said they could not since they had sent the debt to a collector, even though they can accept payments on the debt and record it in their billing system. 
The collector has placed a collection record on my credit report, though they do not contact me since in my XXXX contact with them I stated that I was making payments directly to the creditor. Are they allowed to do so? If I pay the debt in full to the creditor, can I have the collection record removed from the credit report since they were never involved with the debt?