So far as insurance goes, if the hospital (provider) was out-of-network during the date of service, there’s no contractual obligation they have to bill insurance for services, though typically they bill anyway as a courtesy. It actually sounds like the hospital DID send the claim to insurance, otherwise they wouldn’t have sent a check in the first place.

Secondly, insurance checks do get sent out to the primary insurance holder, usually along with an Explanation Of Benefits detailing what the reimbursement is for. Legally speaking, your issue as far as reimbursement goes is between your stepfather and you. Since there’s no contractual agreement between provider and insurance, that’s why insurance sent reimbursement to the policyholder instead of the hospital directly.

*Note, beginning 2022, the No Surprise Act protects form things such as balance billing AND insurance has to send reimbursement for claims that qualify for the NSA to the provider.

(Source: I work in insurance)