"I said, 'No way, he's just a baby,' " she recalled.

The turning point came last fall, when Robert, 14 and diagnosed with bipolar disorder, held his mother and two brothers hostage in their car for two hours, breaking out windows and punching them when they tried to escape.

Malka knew then that he needed intensive treatment. What she didn't know was that to get it, she would have to give him up.

Because her private insurer -- like many insurers -- wouldn't pay for long-term hospitalization, the only option was for the state to fund Robert's treatment through Medicaid. Which meant Malka had to relinquish custody to New Jersey's child-welfare system.

"That's a horrible thing," said the 34-year-old Flemington office manager, who allowed the state to take custody of her son on Feb. 21. "He didn't ask to have the problems that he has, and I don't think he should be ripped out of his family because I can't pay for his treatment."

Malka's agonizing situation is not that unusual. A recent report from the U.S. General Accounting Office found that more than 12,700 parents temporarily severed ties with their children in exchange for mental-health care in 2001.

Advocates and the GAO say the numbers of parents forced to trade custody for care is actually much higher, since 32 states did not respond to the survey and no formal tracking of such placements occurs.

Another survey, by the National Alliance for the Mentally Ill (NAMI), says one in five parents of mentally ill children temporarily gave them up to obtain services they could not afford otherwise.

"We know that the GAO report is just the tip of the iceberg," said Tammy Seltzer, a staff attorney at the Bazelon Center for Mental Health Law in Washington.

"Custody relinquishment has been documented in at least half the states in the country, but of course even one family's being asked to make such an impossible choice is too much."

According to the GAO, children were placed in either foster care or the juvenile-justice system. Most are severely mentally ill and many are violent, disrupting home life and making it virtually impossible for parents to care for siblings.

"It seems like a medieval punishment," said Glenda Fine, president of Parents Involved Network of Pennsylvania, an advocacy group.

Even more troubling for parents is that some states compel them to publicly state that they are abusing or neglecting their children just to get them into the foster-care system. Once they give them up, parents may have to win a judge's approval to get the children back.

"Families do this out of desperation," said Trina Osher, a spokeswoman for Federation of Families for Children's Mental Health, who relinquished her son for five years. "They treat you like an unfit parent and your child as a problem child. This is not the reason you're there."

For parents who have tried navigating the fragmented and overburdened mental-health system, giving up custody can seem like their only choice. Instead of helping, the practice often exacerbates already stressful situations.

"It's very hard to take," Osher said. Her son, who was 10 when she gave him up so he could be treated at a residential center, "felt abandoned, like the family had just thrown him away."

Her other children were fearful they would be sent away, too. "It was destructive to the family bond. It took us many years to recover from it. We're still working on it," she said.

Darcy Gruttadaro, director of NAMI's child and adolescent action center, said taking emotionally ill children from their parents is "therapeutically the worst possible outcome."

Thirteen states have outlawed custody relinquishment of children in exchange for mental health care. In 1992, Pennsylvania banned the practice, and allows any child diagnosed with a disability to receive Medicaid coverage, regardless of income, said Joan Erney, deputy secretary for the state Office of Mental Health and Substance Abuse Services.

Still, according to the GAO survey, 71 children in the state were relinquished to foster care for mental-health treatment in 2001.

Children "still fall through the cracks," Erney acknowledged, but she said the numbers in the report "seem high to me."

"We do not under any circumstances permit counties to suggest or offer as an option that families give up custody to access mental-health services," she said.

New Jersey, which did not respond to the GAO survey, also instituted changes and in 2000 launched the Children's System of Care Initiative, which ensures that families get mental-health services "without getting involved in child-protective services at all," program director Julie Caliwan said.

Though the program was scheduled to be in place statewide by January, because of funding problems it has been rolled out in only seven counties -- Burlington, Monmouth, Union, Cape May, Atlantic, Mercer and Bergen.

Elsewhere in New Jersey, from 1,600 to 1,700 children are in foster care for mental-health treatment, Caliwan estimated.

Six million to eight million children in the United States have emotional or mental disorders, about half of which are serious and persistent, according to the Federation of Families.

The custody dilemma arises because most private insurance plans put strict limits on mental-health coverage. Malka's, for instance, has a 30-day cap on psychiatric services.

Health plans typically pay for outpatient therapy, some hospitalization and medications, but not the intensive services children with severe behavioral problems need, Seltzer said.

Medicaid, however, will pay for long-term residential treatment and what are known as wrap-around services, which might include therapeutic after-school programs, respite care, and other remedies aimed at keeping children in their homes.

Even with coverage, implementation is erratic. Though the federal government provides money to states for home and community-based services for mentally ill children, most states do not take advantage of the program.

States are more willing to pay for higher-end therapies, such as residential treatment, than programs aimed at keeping children in their homes, Gruttadaro said.

"There's a culturally ingrained way of delivering services and a reluctance to try other models," she said, noting that only three states -- Vermont, New York and Kentucky -- have implemented federal Home and Community Based Waivers for mentally ill children.

Moreover, the states, which pay from 50 to 75 percent of Medicaid costs, do not want to drive up their budgets by adding services, she said. Too few mental-health resources and rising numbers of children with serious mental-health issues add to the problem.

The most difficult part for many parents is losing control over their children's treatment and care. Malka said she was told she would be consulted at every step of the way "and this was just being done to qualify for Medicaid." But she cannot visit her son or give him over-the-counter asthma medication without his social worker's approval.

Kathy Minnucci of Ridley Park refused to give up her son, as his doctor and social worker recommended, after her insurance carrier declined to pay for continued residential care. Instead, she sued the company and won.

"They say, 'We're not telling you you have to give up your parental rights." Oh, yes, you are," said Minucci, the mother of six.

Parents are often blamed for their children's problems, she said. At one hospital, she was told that her son, who has stabbed animals and banged his brother's head against a wall, "needed nurturing and parenting."

" 'What do you think I was doing for years before the child ended up in his first residential?'" she said she told them. "That's a slap in the face of the parents."

Parents and advocates are looking for relief from the federal government in the form of the Families Opportunity Act, which would open Medicaid coverage to a greater number of mentally ill children, and the Paul Wellstone Parity legislation, which would force insurance companies to make physical- and mental-health coverage more equitable. Both are pending in Congress.

But those who are familiar with the issue say legislation will not address the root of the problem: a misunderstanding of children's mental illness. Many people still feel that mental illness is really emotional weakness or willful disobedience, advocates say.

After all, said NAMI's Gruttadaro, if a child were ill with asthma or another condition requiring hospitalization, "we wouldn't think of suggesting that services weren't available unless their parents gave them up. With mental illness, it's often considered bad parenting."

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