RALEIGH -- State lawmakers addressed the U.S Department of Justice's investigation, which claims North Carolina is in violation of the Americans with Disabilities Act.

Two years ago, an advocacy group called Disability Rights North Carolina complained to the DOJ that thousands of people with disabilities are being needlessly institutionalized.

During a Legislative Oversight Committee meeting Tuesday, reality set in for legislators, who realized the state could face a federal lawsuit if the allegations are not addressed in a timely manner.

Department of Health and Human Services Acting Secretary Al Delia told lawmakers an agreement between the state and the DOJ will allow people with disabilities to be cared for in their own home or community when possible.

"It will mean a change in how we do business particularly as we provide services to people with mental illness and ultimately with other disabilities,” said Delia. “It really does come down to policy choices that are made and the allocation of resources."

Based on settlements with other states, legislators are concerned North Carolina does not have the revenue to implement the changes.

"That's fantasy world I think,” said Sen. Harris Blake, a Moore County Republican. “But it would cost us dollars in the billions."

Vicki Smith, the director of Disability Rights North Carolina, filed the complaint with the DOJ in 2010. She believes changes would immediately help at least 6,000 people in adult care programs.

"A lot of people who are living adult care homes now would be able to go back to work, pay their own rent, pay taxes and contribute," said Smith.

DHHS officials said they plan to give lawmakers an exact dollar amount behind closed doors. Delia said he feels this is an ideal time for lawmakers to make changes because the budget will likely address other concerns surrounding the state health care system.

"Having that complete information can make their determinations about whether the state will go forward and trying to finalize some kind of agreement or not in the next two, three weeks," said Delia.

If the state does not take action this year, there's a chance the DOJ may take legal action.