Retired docs earn millions examining injured Washington workers

Once or twice a month, Steven Nadler travels across the country to Washington from his home in Boca Raton, Florida, to medically examine workers who suffered injuries on the job and assess their recoveries for the workers’ compensation system. 

Nadler, an orthopedist who turns 79 this year, performs as many as nine exams each day. 

A contracting company recruited him back in 2018 to conduct these “Independent Medical Exams” — third-party assessments of workplace injuries. Nadler said he enjoyed that the trips allowed him to regularly visit his daughter while she attended the University of Washington. 

He stopped performing surgeries about the time he began conducting IMEs for the state Department of Labor & Industries, and fully retired from seeing patients in December 2024. Nadler said he continues to make the trek to Washington, long after his daughter graduated, to stay active and maintain the income. 

“We are experienced doctors,” Nadler said in a phone interview. “Even though we aren’t actively practicing, our experience is invaluable.”

L&I data shows that IME income adds up. Two dozen doctors, Nadler included, have each billed the agency more than $1 million since 2020 for performing IMEs and filing related paperwork. The average age of these top earners is 74, two-thirds of whom have retired from providing direct patient care, according to L&I data.

Critics of IMEs say examiners second-guess injured workers’ treatment providers, leading to delayed or denied treatment. A recent Cascade PBS investigation revealed that some workers find the exams adversarial and doubt the independence of doctors paid by the state-run program and self-insured companies. Workers have filed dozens of complaints against examiners, questioning the practices and treatment recommendations of the often-older doctors conducting the examinations. 

L&I most commonly schedules IMEs to determine a disability rating when closing a claim, evaluate a workers’ recovery or add a new diagnosis. IME doctor determinations can result in the stoppage of wage-replacement payments or treatment. 

“This is a wonderful way to make six figures saying no to injured workers,” workers’ compensation attorney Elizabeth Lepley said. 

Nadler reportedly billed L&I approximately $2.8 million from IMEs over the past five years, making him the second-highest earner in the program during that time. L&I data shows that his earnings peaked at $690,000 in 2020 when he performed 816 IMEs, which worked out to an average of about 68 a month. 

These days, L&I pays $728 for a standard IME and $1,319 for an IME done by a psychiatrist, according to data obtained in a records request. Nadler told Cascade PBS he receives about $350 for each exam after the contracting company takes its cut.

“There is absolutely no pressure, doctors are allowed to make their own decisions,” he said.  

Millions on IMEs

Roughly 10% of the state fund workers’ compensation claims involve at least one IME, according to a 2023 L&I report that examined claims between 2018 and 2021. L&I records show that the state’s workers’ compensation system has spent nearly $100 million on IMEs over the past five years. That figure does not include the IME costs of self-insured companies, which provide independent workers’ compensation for about a quarter of the employees in the state. 

Brenda Heilman, assistant director for insurance services at L&I, said the $100 million spent on IMEs between 2020 and 2024 makes up a small portion of the roughly $10 billion paid out by the system over the same time period for medical care, vocational retraining, wage-replacement payments, settlements, pensions, cost of living increases and other administrative expenses.

“It’s not as much as it sounds like,” Heilman said. “When you compare it to total benefits being paid.”

L&I records show that about half of the $100 million the agency spent on IMEs went to two companies: Massachusetts-based Medical Evaluation Specialists and Seattle-based Mitchell MCN. Both companies declined to comment. 

According to L&I, to ensure independence of the examiner, the agency hires IME doctors through private contracting companies, known as panel companies. It’s these companies that do the recruiting, scheduling and paying of examiners. The agency says the company chooses the doctors. 

Doctors often work for more than one company. These companies that hire and schedule doctors  keep roughly 50% of the L&I payments, according to IME doctors.

“IMEs are useful on our system,” Heilman said. “They get us information that we need to make decisions about benefits for workers.”

Age and earnings

Cascade PBS reached out to the top five IME earners listed in the state’s data. The highest earner last year, Charles Peterson, billed L&I $720,000 after performing 650 IMEs. Born in 1939, he first received his medical license in Washington state in 1974 and retired from seeing patients in 2018. He has been the highest earner since at least 2020, bringing in a total of $3.8 million.

Peterson did not return multiple messages requesting comment. Some other top earners declined to comment for this story.  

Workers told Cascade PBS the ages of the examiners also raised a number of concerns. Dru Lorick, a 55-year-old truck driver, said he finds himself getting anxious before going in for an IME. 

“They make me nervous,” he said. “It’s always old guys, always retired guys.” 

In a recording of Lorick’s most recent exam in September 2024, the examiner appears to urinate on himself. The doctor, in his late 80s, is shown standing over Lorick during the exam. As the doctor turns to the camera, a dark spot on his pants can be seen where there was not a spot before. The doctor then quickly exits the room, returning shortly afterward to finish the exam. 

“He seemed to be so mentally out-of-it that he didn’t even notice it was a concern,” said David Lauman, a lawyer at the firm representing Lorick. “I don’t think he’s competent to do these types of exams.”

According to the law firm representing Lorick, the doctor, who is the oldest top earner still performing IMEs for the state, later determined the pain in Lorick’s left shoulder was not caused by his work injury, stopping treatment on that part of his body. Lorick filed a complaint with L&I, and the agency says it is investigating. 

L&I spokesperson Matt Ross said the agency takes complaints seriously and expects all providers to meet or exceed established exam standards. He added that if the provider is credentialed by the Department of Health to practice, meets L&I criteria and has no action on their professional license, they are able to conduct IMEs.

“It’s against the law to discriminate against providers based solely on their age, and L&I doesn’t do it,” Ross added. “Furthermore, there’s no evidence that age alone prevents a doctor from providing care at a high standard.” 

The doctor did not return multiple requests for comment. He is able to perform IMEs while the investigation remains active, the agency confirmed. 

Medical director for the panel company Corvel, Dr. Shalom Seltzer said he has performed IMEs for more than two decades. Records show he billed L&I for $2.3 million for IME work over the past five years, making him the third-highest earner. 

Seltzer wrote in an email that he understands the tensions that can arise between workers and their employers over the IME determinations, but he does not let that — or his age — affect his medical opinions. 

“I have been aware sometimes of subtle or not-so-subtle pressure,” Seltzer wrote. “But I either totally ignore it, or I will walk away from that company.”

Seltzer splits his time between Yakima and New Orleans, he said, flying back at least once a month to conduct IMEs in Washington state. 

“The most important thing I have professionally is my integrity,” he added. “Would you sell yours for $350? I am not shy about disappointing someone by what I write. But they are going to get [the] best shot each and every time.”