But comprehensive governance of any complex, dynamic sphere is a task that law performs poorly. Put simply, law cannot keep pace with entrepreneurship. In trying to fill such gaps, regulators can worsen the problem by creating rules so complex and convoluted that they generate confusion and unpredictability. They send the message that such incentives are wrong because they tempt physicians to break faith with patients and misuse taxpayers' funds. At the same time, they present these incentives as desirable tools for managed health plans to use to control costs.
Safe harbors protect myriad compensation arrangements designed to discourage clinical spending.
The oft-stated rationale for this seeming contradiction is that the incentives offered by managed health plans are designed to achieve efficiency and are therefore beyond the proper reach of federal fraud and abuse law, which targets wasteful spending. But the line between efficiency and undertreatment is murky at best, and the managed care safe harbors do not even contemplate the need to draw it. One might respond that the risk for undertreatment is beyond the scope of laws intended to reduce waste. However, this argument fits poorly with the general belief that laws against fraud and abuse should protect patients. That society should see a need for such laws to protect patients from their physicians is disheartening to the average, well-meaning practitioner.