RALEIGH, N.C. — The North Carolina Department of Health and Human Services could end up paying millions of dollars to avoid a lawsuit over alleged violations of the Americans With Disabilities Act, state lawmakers learned Tuesday.

State health officials briefed the Joint Legislative Oversight Committee for Health and Human Services on Tuesday about the progress of the months of negotiations with the U.S. Department of Justice.

The issue stems from a justice department report last summer that found that the state's mental health system needlessly institutionalized thousands of mental health patients, segregating them from the community and impeding their interaction with people who do not have disabilities.

Mental health advocacy group Disability Rights North Carolina estimates the number of patients affected could be anywhere from 6,000 to 20,000.

Because of the pending litigation, DHHS officials did not say publicly how much the state might end up paying if a settlement were to be reached. They were expected to hold a confidential briefing on the cost for lawmakers Wednesday.

Other states, however, have settled similar cases for billions of dollars.

Challenging the lawsuit might not be any better, DHHS general counsel Emery Milliken told lawmakers.

"Once you're in front of a federal district judge, you've lost that control and ability to shape your own destiny," she said.

DHHS Interim Secretary Al Delia said a settlement would most likely need to be finalized in the next few weeks.

It would be up to Gov. Bev Perdue and the General Assembly to finalize an agreement and to decide where the money to cover it would come from.

Compromises on budget issues between the Democratic governor and the Republican-led legislature, however, have been difficult, at best

"We just hope politics doesn't get in the way of doing what is right for people with mental illness and other disabilities," Disability Rights' executive director, Vicki Smith said.