BOSTON (AP) - Massachusetts is unfairly taking the property of dead smokers to pay for medical care even though the state has been reimbursed as part of a multibillion-dollar tobacco settlement, a lawsuit contends.

The lawsuit was filed Wednesday in U.S. District Court on behalf of the estate of Mary Watkins, who smoked cigarettes for 25 years before she died three years ago from smoking-related illness. Attorney Louis Massery said the lawsuit appeared to be a first and challenges a system in place in states nationwide. He is asking a judge to give it class-action status. The administrators of Watkins' estate paid the state $16,000 for her care after selling her home last year. The lawsuit contends the Division of Medical Assistance double-charged by taking money from Medicaid recipients' estates despite having received a $7.6 billion share of the $206 billion agreement over health care costs signed in 1998 by leading cigarette makers and the attorneys general from 46 states. ``It seems unfortunate that these low-income folks, who have nothing to bequeath to their children except their homes are being asked to reimburse the state,'' Massery said. The lawsuit asks for an end to the seizure policy and the return of money collected from those who suffered tobacco-related illnesses going back to the early 1990s. Rich McGreal, a spokesman for the Division of Medical Assistance, defended the program. ``We're obliged to do this under both state and federal law,'' he said. ``By recouping this money, we're basically putting the money back into the system'' where it can be used to help other people. He said the state doesn't necessarily force the sale of the house. Arrangements can be made, for example, to pay off the state through a home equity loan, he said. In special circumstances, such as a disabled child living in the home, the state waives the recovery of the money. A spokesman for the attorney general didn't immediately have a comment Thursday. A spokesman for Gov. Paul Cellucci had no comment. The medical assistance agency collects about $20 million a year through its Estate Recovery Program, the lawsuit said. Massery said about $3 million comes from the estates of people who died from smoking-related illnesses. Under a 1993 law designed to shore up Medicaid's finances, states were required to seek reimbursements for payments made by Medicaid. However, Massery argues that once tobacco companies began reimbursing states for the cost of treating smoking-related illnesses, it became illegal for states to continue collecting from the estates of people who died from smoking. A spokeswoman for the Health Care Financing Administration in Washington, which oversees Medicaid, said the agency had no comment on whether the Estate Recovery Program should be changed to exempt people who died from smoking-related illnesses. Herb Semmel, an attorney with the National Senior Citizens Law Center, said his organization has concerns about the entire program. ``The cause of the illness is irrelevant. They shouldn't come after the family homes,'' he said. ``Whatever little bit people have, they want to leave to their family.''

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