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New York (CNN) -- Handcuffed to a bed and wrapped in a hospital blanket, a New York nanny accused of killing a sister and her toddler brother pleaded not guilty Wednesday to murder.

In a case that has given many parents nightmares, Yoselyn Ortega was watching 4-year-old Lucia and 2-year-old Leo Krim at their Upper Westside Manhattan home in late October when police say she stabbed the kids to death.

Their mother came home, police said, and found her children in the bathroom. She also saw the nanny stab herself with a kitchen knife, authorities said.

"This crime shocked and horrified parents around the city, many of whom entrust their children to the care of others both by necessity and by choice," Manhattan District Attorney Cyrus R. Vance said in a statement. "My heart goes out to the family of those beautiful young children, and I hope that, with time, this family will heal."

Wednesday's hearing took place -- not in a courtroom -- but at Manhattan's Weill Cornell Medical Center.

Ortega, 50, did not speak, and her lawyer entered her plea for her. The nanny is expected to undergo psychological evaluation, said authorities. She has been indicted and charged with first- and second-degree murder in both deaths.

A native of the Dominican Republic, Ortega had been a naturalized U.S. citizen for 10 years. Her next court date is scheduled for January 16.