Huge US medical bill

Hi
On a visit to the US earlier this year, my wife became unwell. She guessed it was probably a urinary infection that could be cleared by antibiotics. We asked at a pharmacy but they couldn’t sell us anything or advise us where to go. Since we were near the Vermont University Medical Centre, we thought it was worth seeing if it was possible to buy some antibiotics there to knock it on the head.
We were directed to the reception where my wife explained the problem and was made to follow a procedure of waiting, seeing a clerical person to declare weight, height, etc, being asked to put on a gown and lie down in a consulting room, seeing a doctor, seeing someone else about giving more admin details, seeing a nurse with tablets, and then getting a prescription for antibiotics. She asked several times how much this was going to cost, but no one would give any indication at all. Nor did anyone there suggest an alternative place to go. We were relieved to be charged only $5 for the prescription and the tablets cleared up the problem. However, several weeks later we were horrified to receive a bill from the hospital for $896.97 for hospital services and $416 for physician services – totalling $1,312.97. We would never have agreed to see a doctor at the hospital if we had known the cost.
We have two questions:
1) Our insurers have refused to pay the amount, saying that it is a pre-existing condition and should have been declared when taking out the insurance. However, we do not consider this a ‘condition’, rather it is something that people get sometimes, and we were able to send the insurers a note from her GP saying my wife has only had one case of confirmed urinary infection in the last year. Can we argue this any further?
2) If we are unable to get the money back from the insurers, do we have any redress from the hospital for charging an extortionate amount, having refused at the time to give any idea of the costs? Or what is the likely outcome if we simply don't pay?