Worst case Senario

What is the name of your state Mississippi.
Recently my wife had surgury and all the bills were paid by her dissability insurances except for one because the hospital was out of the network, good thing we made advance reccomendations so the bills could get paid, but the insurance company is sending me the check in my name to distribute to the hospital. my problem is we really could use this money in more imediate places and would better suit us to set up a payment plan with the hospital, could we get in to any legal trouble for choosing in this route of repayment,
whats the worst could happen ???

The only way you can legally keep that money is if you had paid the hospital and the check is a reimbursement.

The insurance company could, and probably would, go after you for using for your own means, a check they dispensed to pay the the hospital.

If you make a payment plan with the hospital, use that money for other things, default on your hosp. payments, you would be in even more trouble than just with the insurance company. I am not talking about the hospital sending you dunning notices or turning it over to a collector. Bigger trouble
than that.

Maybe

I live in MS too.

I think you can clearly see what is the "right" thing in this matter.

But I am not one to lecture....

There is not much they can do, other than come after you a bit, forever.

First, they have to file charges of fraud.

With Fraud intent has to be proved. Which is very difficult, in most cases. But not in ones where a post can be used as evidence...

The most important thing here is that you are not wanting to keep the money, but see a way to get a possible loan. You are/were in a very burdensome financial situation, and seemingly starvation is/was more of a threat than jail time...

As long as you called them, informed them, signed an agreement, etc. that you were going to pay this bill over a set amount of time. And even take some of those initial funds and give directly to them... 10% ? Right then.

They would like the prospect more of getting their money, vs. filing charges, as long as you kept up your end.

But really, Eye_Dunno.