urgent help(for parents)

Hi,

any help/suggestion is appreciated. My case is a little complicated. I will try to be clear:

My dad came to US on B-2 in 1/2006,
he suffered bell's syndrom in 2/2006 and was rushed to emergency, stayed in hospital in 3 days.
then he was advised to apply medicaid,
medicaid was denied in 4/2006.
5/2006, B-2 extension was submitted requesting extension of stay for further treatment
now got letter from vermont center asking for proof of payment.

Now what should I do? have the following question:
1. If we don't pay the medical bills, will this affect their green card application which will be next year.(I will be naturalized end of this year).
2. For B-2 extension right now, can we submit proof saying that medicaid has been applied pending for result.
3. Or worst case, we really have to pay the bills???

appreciate any help.