"At the end of the day we have one rule book whether it's a leading trainer or a two-horse trainer in the country," Bailey told Melbourne radio RSN.
"We did discuss the concept and it wasn't particularly directed at Mr Moody's stable. It was targeted at all trainers.
"In the end we didn't do it. We did a risk assessment into it and decided not to go ahead with it."
Bailey said they discussed the possibility of covert operations with Racing Integrity Commissioner Sal Perna.
"Mr Perna came back to me with positives and negatives and after we weighed that up we decided it wasn't worth it," he said.
Bailey emphasised integrity was paramount and his department would continue to apply the rules with no exceptions.
Meanwhile, Sydney trainer John O'Shea has joined a growing list of trainers who say they are baffled by a hardline stance on raceday treatment procedures.
As Moody brought the issue to a head during an explosive television interview on Wednesday, O'Shea agrees too many new rules are confusing to the point where administrators are not sure what is right or wrong.
O'Shea said Racing Australia boss Peter McGuaran's uncertainty about whether a horse could legally be treated with ice on raceday underlined the difficult situation trainers faced.
"The person who has implemented the rules, when asked whether you could ice a horse, he was unable to give an emphatic answer," the Godolphin trainer said.
"They criticise trainers for not knowing the rules and the person who sets the rules and puts the rules out didn't know the rules himself."
O'Shea is also concerned some of the treatment rules threaten the welfare of the horse.
"With the new rule you're not allowed to administer fluids in 35-degree heat or 40-degree heat, the only intake a horse can have is water. Have you ever heard of something so preposterous?" O'Shea asked.
"Welfare of the animal in the current climate should be the paramount concern."
- AAP