For years, the Department of Children and Families has left beds unfilled at its two psychiatric facilities while sending hundreds of children out-of-state, an expensive and criticized practice. This summer, DCF is bringing some of those children home under a plan with its own elements of controversy.

“We are not just going to provide good treatment closer to home, but we are going to save money,” said Michelle Sarofin, the new superintendent of the now combined administrations for Connecticut Children’s Place in East Windsor and Riverview Hospital in Middletown.

The plan is ambitious: expand the number of children living at the two campuses by 65 percent, and cut in half the amount of time it takes to get them living back in the community.

But child advocates and private providers, despite asking DCF for years to bring children back from out-of-state, say they are not happy with this approach.

“You may be bringing them back to Connecticut, but you are still serving them in an institutional setting,” said Terry Edelstein, president of the Connecticut Community Providers Association, which represents 113 non-profit private providers.

Connecticut has one of the highest percentages of children in state custody living in institutional or congregate care settings in the U.S., according to figures released in May by the Annie E. Casey Foundation, a national child-welfare advocacy center. Significantly reducing that number is one of the things that most agree will help end years of federal court oversight.

“Two big facilities is not the way to go,” said Jeanne Milstein, the state’s child advocate. “Clearly we need more beds for these children, but I think the services can be provided by the private facilities that are more geographically based and done in a more cost-efficient manner.”

DCF officials said they will continue to seek private beds, but Riverview and CCP must be part of the mix.

“You need both,” said Muhammad Azeem, the medical director for the campuses. “Our purpose here is to provide the necessary treatment and get them back in the community as soon as possible.”

Six new units at Riverview and CCP are set to be at full capacity by Oct. 1 and will house an additional 54 boys and girls with serious aggression or self-injury issues. The intention is to have them back in their community in not more than six months. When a child is placed in an out-of-state facility or at CCP, they are typically there for at least a year, said Janice Gruendel, who is overseeing the project for DCF.

“That is not how we are going to operate anymore,” she said during a recent tour of Riverview Hospital. “Brief treatment can work.”

And last month, a boy named Josh, who was sent to live hundreds of miles away from his family in Pennsylvania, was one of the first children to benefit from this change.

“We decided to get him back in the state and in intense treatment with his family so he could go back home soon. You can do that when his family is living 20 minutes away,” said Gruendel.

And Josh is not alone. On any given day there are about 350 children with mental-health issues in state custody living in out-of-state facilities, an ongoing problem that was brought to the attention of Gov. Dannel P. Malloy and his new DCF commissioner Joette Katz a few days before they took office.

“Youth with specialized treatment needs have extremely limited access to in-state treatment programs,” a panel of child mental health experts and advocates wrote in their transition report to Malloy and Katz in December. Since more children with mental health needs are being served out-of-state than at in-state facilities, these children’s chances for moving back with their families are diminished, the panel said.

Leading mental health organizations have said children with mental-health issues tend to do better when they receive services close to home, they and have pushed for a bill of rights that would require services be provided as close to home as possible.

Gruendel agrees, which she said was the impetus for DCF deciding to serve more children at Riverview and CCP.

“Look, we start, and find these places are half full. That was puzzling to us because we are sending so many children out-of-state,” she said.

And while Milstein is uncomfortable with the expansion, she said the reality that it will mean fewer children will be living so far away from their families is a good one.

“It’s a good first step for that problem. At least something’s being done,” she said.

But the decision was not an easy one, Greundel said, since a variety of people have been calling on the state to close these costly facilities for years.

“I think we would find that even in the most expensive of private pay facilities, the costs to care for these children would be significantly less than it is for the state of Connecticut,” Senate Minority Leader John P. McKinney, R-Fairfield,testified earlier this year on a bill to begin plans to close Riverview.

DCF reported in April it costs the state $73 million a year to keep the two facilities open. The Commission on Nonprofit Health and Human Services reports it costs the state $2,109 a day — or $770,000 a year — to serve each child. That is almost seven times more expensive than if a child was sent to a private facility, largely because of the disparity in pay of the employees at the different type of facilities.

DCF officials decided they can save money keeping the institutions open: They plan to serve more children with the existing 400-person staff; and for every child served at Riverview or CCP, no money will need to go to pay tuition at expensive out-of-state facilities.

Records show the annual cost for such facilities is an average of about $160,000 a year when factoring in education costs, which Riverview and CCP figures also include. So, the first four children that were moved back to Connecticut last month are already saving the agency money, officials said.

And the savings won’t end there as 50 additional children will be living at the facilities in the coming months.

“We are getting it ready now for more children,” said Frank Gregory, the director of treatment at CCP, while standing in the newly painted cottage at CCP that will soon house 10 children.

This is a new approach from the last administration, who relied on private centers and out-of-state facilities to care for much of this population. But with the number of children being placed out-of-state increasing, it became clear to the new DCF administration that the state would need to directly provide more services.

“These children don’t have anywhere else to go,” said Sarofin while walking around the CCP campus. “Many children end up here, because there is no other hospital or program for them.”

But Milstein said there is a solution.

“Does Riverview take the more challenging cases? Yes, but if [private providers] had the resources they could enhance their staff to meet this need,” she said.

Children have struggled for years to get the needed mental health services until they ended up in emergency rooms in crisis. Riverview and CCP reserve multiple beds for such occasions and one out of every eight children that were admitted to Riverview in 2009 came from a hospital, DCF reported. The Casey Foundation reports this is part of a national problem.

The state has invested hundreds of millions of dollars to provide insurance to children with mental health needs so they can get the necessary services in the community and hopefully never need to be admitted to a hospital.

Edelstein said this is a great step, but for children that do need more care than a home environment can provide, the state needs to better utilize the private providers. The non-profit commission reports 676 children in DCF custody are provided services at private facilities on any given day. Riverview and CCP serve about 85 children and it is unclear how many children live in private hospitals.

“We would question why they are setting up new units when we have room. Use us as a resource,” she said. “This [plan] doesn’t take into account the role of private providers. We need to figure out how we can be helpful in bringing children back from out-of-state, too.”