Raleigh, N.C. — The funding shortfall in North Carolina's Medicaid program has ballooned to $150 million, and the political fight over how to fill the growing budget hole shows no signs of a solution.

Health and Human Services Secretary Lanier Cansler says the Medicaid program, which serves more than 1 million people statewide, won't be able to achieve more than $350 million in cuts mandated by the state budget under its current operations.

Cansler says the budget offers him only one option to accomplish the required savings: deep cuts to optional services and to the reimbursement rates the state pays Medicaid providers.

The federal government has approved fewer than half of the 54 rate cuts DHHS has proposed, he told lawmakers on Tuesday, which cuts into the projected savings they counted on in the budget.

"If we don't find a way to solve the problem come May, it's going to be extremely serious because, again, we can't write Medicaid checks if we don't have the money," he said.

Increased demand for services and overpayments DHHS made to providers aggravated the shortfall, which officials said could grow to $243 million by the 2012-13 fiscal year, which starts in July.

A standoff continues between Gov. Beverly Perdue's administration and Republican legislative leaders over who's responsible for erasing the shortfall.

"It's still on the governor. Once we pass a budget, it's her job to execute, and it's her job to make changes," said Rep. Justin Burr, R-Stanly.

Cansler countered that Perdue doesn't have emergency budget authority.

"She can't move that money around the way that she's done to help deal with issues like this in the past couple of years, and that's why the legislature has to be a part of the solution," he said.

Providers and advocates for groups served by Medicaid said they just want a solution to the impending crisis.

"This has turned into a big political debate. This is about who is at fault for this Medicaid shortfall. In the end, that's not the important thing. The important thing is the people who need the services," said Rob Thompson, executive director of Covenant with North Carolina's Children.