I hope you get better soon. But whilst you are in hospital have a really good think (as I'm sure you are) about what you are doing and who you are doing it for.
From bitter experience I can tell you that your ex is in the process of abandoning his children. He is dragging it out because he doesn't want to piss off his parents too much as they are looking after him.
So his intention is to separate his children from his life. His actions may seem confusing until you realise he's doing the one thing you could not do: he's abandoning his children and starting again as if they don't exist. That's why he is mucking about with collections: he wantss the least interruption to his life (nights are 'easier' because he doesn't have to go back and forth). He is hoping that whilst he has the children, his parents will actually be caring for them. So he can go out/round his gf's house. They won't tell you this because they obviously want a relationship with the children. He is also messing you about with maintanance because in his head, he shouldn't be paying you any if he 'has' his children. And also because in his mind he doesn't really care how they get fed, he's not going to be doing it but that doesn't matter.
My ex and his parents have been doing this dance with me for years and it's taken me a looooong time to realise what I couldn't bring myself to think before: that my ex behaves so strangely because he doesn't actually want to see my dc, he is just showing minimal interest to keep his parents happy and also to look good to other people in society - so they think he is doing what he should be. He's obviously told everyone that I'm controlling. He was, however, very abusive in our short relationship. Over the years he has been more intolerant of his dc's needs and has 'erupted' a couple of times so I had to stop over nights. He was the same with nappies - never changed them. His parents actually did most of the childcare whilst he went out. He never really paid maintenance - only a few times and probably at his parents' request. Also, once I was very ill suddenly and asked him to have our dc but he refused saying 'you should have told me earlier' - despite the fact that I didn't have acrystal ball to say I was going to be so ill so suddenly!! I had to call his parents for help, just as you have effectively done. He also didn't change his clothes or brush his hair.
I have concluded that he is actually somewhere on the antisocial behaviour spectrum. Look it up - I bet lots of it will ring tru for you. These men are 'parasitic' of nature and will con (the parental leave) and trick people into looking after them. This is essentially what he is doing with his parents. Unfortunately they won't ever see him for who he is and have their own interests in seeing their grandchildren.
Overall, I wish I had realised earlier what I know now - it would have saved my dc a lot of pain. Now they wonder why he doesn't ever call, why he doesn't send easter eggs. The OW by the way went on to have a child with him and he did exactly the same to her!! That's his OW's future.
My advice then is to just not contact him. Allow him to walk away. I know it's not what you want for your dc. It's not fair on them. But it's worse to have them believe he loves them in a normal way only for them to gradually find out he doesn't or worse still for something abusive to happen (neglect/accident/him lashing out). You would really be doing the best for them in just making zero effort in facilitating contact. He should make all the effort.
Regarding his parents - I would say you should not refuse contact if they ask for it and want it. Make a schedule with them. Tell them you know he isn't interested, but don't want your dc to lose their grandparenting. Tell them you don't want him taking them off and that you don't believe he does either so they shouldn't push it. It might give them the space to admit they realise he doesn't want contact either, but they were afraid of losing it if they told you the truth.
Good luck. I hope you get better soon!