Gov. Beverly Perdue said Thursday that she and Republican lawmakers continue to discuss how to ensure that mentally ill and developmentally disabled people can remain in group homes in the new year.

After the state changed how if funds personal care services for the disabled – help with such daily activities as eating and bathing – the operators of adult care facilities told state officials that the loss of Medicaid reimbursements for the services might force them to shut down.

Lawmakers inserted $40 million into the budget to keep adult care and nursing homes open while the the state examines changes to the mental health system, but small group homes across the state don't qualify for any of the money.

About 2,000 people live in group homes, and dozens of them rallied Wednesday outside the Legislative Building, calling on lawmakers to hold a special session in December to address the issue before the Medicaid cuts go into effect on Jan. 1.

Perdue said she's distressed by the thought of group homes closing. Although she's looking at other options, she said she hasn't ruled out calling for a special session.

Rep. Nelson Dollar, R-Wake, challenged the governor Wednesday to shift money within the state Department of Health and Human Services to solve the problem, much as she put unused DHHS funds toward expanding pre-kindergarten programs.

Perdue said she found Dollar's stance ironic, noting that GOP lawmakers inserted a provision in the budget bill that makes it illegal for her or the state budget director to shift money unless it's in response to a court order.

"I'm determined that, on my watch, whether it's legal or illegal, we are not going to dump 2,000 people on the streets of North Carolina," she said. "That is just not going to happen."