The incoming health secretary has set up a £5m taskforce to reshape and improve child and adolescent mental health services (CAMHS).
Jeane Freeman condemned the existing system for referring children and young people for specialist mental health treatment.
The announcement follows publication of a report on “rejected referrals”.
An audit was announced last year after NHS figures showed thousands of referrals were being rejected.
A rejected referral occurs when CAMHS is assessed as inappropriate for the child or young person.
During the audit period in February, one in five referrals was rejected across all health boards.
It was found that decisions usually happened quickly, with most made on the basis of paper referrals rather than face-to-face assessments.
Further research gathered from seven health boards found two-thirds of their 285 rejected referrals included “signposting” to other services.
However there was a disparity between this and the views of children, young people and their families.
Of the 253 people who participated in an online survey of their experiences, only 42% felt they were signposted.
Meanwhile some reported signposting was “generic, unhelpful and often points to resources they have already explored”.
Some young people whose referral has been rejected reported a belief that they will not be seen by CAMHS unless they are suicidal or at immediate risk of harm.
The report recommended further research into the CAMHS system as a whole, work to close the gap in provision where it is not the most appropriate service, immediate changes to its assessment procedures, and ongoing data collection around rejected referrals.
Ms Freeman said: “Demand on mental health services is growing but far too many young people are being turned away from help or waiting too long to be seen.
“This report finds that, while CAMHS may not be the right path for some of those referred, young people are being rejected from treatment without proper explanation or being directed to more appropriate care.
“That is completely unacceptable.
“I am accepting the recommendations in this report and I am determined that our mental health service will be re-founded on the need to empathise, engage and explain how to get help to often very vulnerable young people.”
Mental health expert Dr Dame Denise Coia has been appointed to lead the taskforce, with initial recommendations for action expected over the summer.
Link to BBC article here