Medical Debt in Collections, What are my rights?

I received a debt collection notice from an agency stating that I owe $1300 ($950 + interest) to this orthopedic surgeon I went to 3.5 years ago (I never received a bill until I received this notice). After making my round of phone calls to lawyers and the doctor's office for the validation of the debt, it turns out I do owe this debt. After speaking to the doctor's office regarding the amount, the doctor's office said she was willing to drop the amount to $450 and that I would have to contact the collection agency (Grant & Weber) to deal with the payment, etc. I contacted the collector and he was pushing me around saying that if I don't pay the amount in full ($1300) that it would effect my credit score, and that the $450 would only show as a "settlement amount." Is this guy stating the truth or trying to scare me into paying $1300. What are my rights and how can I deal with this collector who is being a complete a**?