The total shortfall estimate for the year is now an estimated $248 million.
The Medicaid program spends about $13 billion in state and federal funds a year to provide health coverage for more than 1.5 million North Carolina residents - most of them poor children, older adults and the disabled.
In March, Governor Pat McCrory ordered state government offices to trim costs to help keep the budget balanced because of the shortfall.
Officials said the greater shortfall forecast was caused by overestimating the amount of federal receipts to North Carolina due to an error in the forecasting model.
"We have been taking a close look at previous Medicaid forecasting practices in order to create a more transparent and accurate process going forward," said Dr. Aldona Wos, Secretary of the N.C. Department of Health and Human Services in a news release. "We are charting a new course of accountability within the Department of Health and Human Services and are seeking bold reforms to create a predictable and sustainable Medicaid system in North Carolina."
The McCrory administration has proposed changing the entire Medicaid delivery system in the state by setting up "Comprehensive Care Entities" that will be the entry point for Medicaid recipients to get the care they need.
The CCEs will have the power to assess patients to determine the best treatment and create a network of health care providers.
Such a change would have to win approval in the General Assembly.
To read the full "Partnership for a Healthy North Carolina" Medicaid reform proposal, please click here (.pdf).
Individuals and healthcare providers with questions about the reform proposal can visit www.governor.nc.gov/medicaid, email MedicaidReform@dhhs.nc.gov or dial the DHHS Customer Service Hotline at (800) 662-7030.