The federal government has set up a new task force to try to overhaul Australia's ailing mental health system.
An expert reference group will map out a plan for how the government can implement 25 recommendations from a major review of the system.
The team of 13 mental health experts, led by former Beyond Blue chief Kate Carnell, started work on Thursday and is expected to report back by October.
Health Minister Sussan Ley already has ruled out one of the report's key recommendations - diverting $1 billion from acute hospital funding into more community-based and primary health services.
While the government was committed to action, there were some problems that need to be addressed, she said.
"It's clear from our consultations with the wider mental health sector ... that while there is broad support, there are still implementation issues to be ironed out."
Ms Carnell defended the minister's decision to exclude the key recommendation, saying hospital funding was a matter for the states and not the commonwealth.
She confirmed all other recommendations remained on the table.
"There's no doubt we have to look at things like stepped care and better ways for people to get mental health support early before they end up in the hospital system," Ms Carnell told reporters.
The task force would look at short, medium and longer term strategies for fixing the system, she said.
Mental Health Australia welcomed the task force's establishment saying reform was urgently required.
"There have been many reviews - now we need action," chief executive Frank Quinlan said.
"Our failing mental health system is already letting down too many vulnerable Australians in need of support."
The 700-page report, released in April, recommended a major overhaul of Australia's "poorly planned" mental health system.
Ms Ley said it painted a "disturbing picture".
She says the taskforce's findings will also inform the government's contribution to the national mental health plan being developed with the states and territories, as well as its review of Medicare.
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