I have settled with the hospital. The insurance finally came up with the funds and the hospital is satisfied with the discounted amount. The attorney in the interim filed in court for total recovery.
I inform this attorney in writing to wait for pending payment. Payment came in November, and he is filing in Jan 2014 for original amount.
I also talked to attorney's clerk who said just send in the filing fees. They apparently saw the settlement with hospital just recently but still want to recover their filing fees. Had they waited like I wrote them to do,. for the settlement they could have avoided generating service fees.

Did the hospital sign the settlement? Do you have a copy of it? Do you have a copy of your letter to the attorney?

Take it to court and ask the judge to dismiss.

If you have a written settlement agreement, you just send them a copy, the hospital is liable for paying their attorney. Most hospitals merely keep an attorney on retainer.
So just inform them and send them written proof. If not, then you go to court and call the hospital and insurance records as proof in court

the hospital is liable for paying their attorney. Most hospitals merely keep an attorney on retainer.

Attorney fees are not the issue. OP indicates that the attorney is seeking filing fees, a species of court costs. But if the agreement is in writing, the settlement will include that as well.