WASHINGTON — Minnesota could lose nearly $5 million in federal funding for children and young adult services if facilities throughout the state qualify as mental health institutions.

Democratic Sen. Al Franken and Republican Rep. Erik Paulsen are leading an effort to protect the funds to the facilities.

Institutions for mental health cannot accept federal funds, which led the Centers for Medicare and Medicaid to raise questions about the Children’s Residential Bed program, operated by the Minnesota Department of Health and Human Services.

The program has 830 beds statewide that are used for people 21 and younger with mental health diseases or who have been pulled from living situations by the state’s child services.

Under federal rules, a facility with more than 50 percent of residents admitted for mental health diseases is considered a mental health institution. Federal Medicaid providers raised concerns in a letter to the state last October that these Minnesota facilities are not qualified for federal funding because of this.

State officials are pushing back. State health and human services assistant commissioner Jennifer DeCubellis said for a patient to be counted toward the 50 percent of mental health patients, they must be admitted for mental health reasons, not if they receive services after being admitted.

In response to the federal letter, state officials are doing a statewide evaluation of the Children's Residential Beds facilities.

The inspections of the facilities began last month, DeCubellis said, noting the state has requested two years to complete the process.

Rep. Erik Paulsen’s office learned that the state may lose federal funding a few months ago by members of the mental health community. Paulsen and Sen. Al Franken led a letter signed by the entire delegation earlier this month, which pushes to keep the federal funding in place.

“Minnesota has had an effective array … of care and services for children with mental illnesses for over a decade,” the letter from the delegation states. “These services have been developed over many years to effectively meet the individual and unique needs of children, adolescents and their families in the state.”