How does she manage to act normal when the police come round? If she was genuinely psychotic it would be really hard I would think. It's not like a psychopath where you can turn on the charm.

I don't live in the US but I know you have to be certain that hospital is the best place for her. What they do to people in these places is dehumanising and criminal. If she is a danger to herself or others then she maybe should be. But as you are in a different country from me I don't know the rules over there.