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What is Allied Physicians?

Allied Physicians of Michiana, LLC (Allied) was formed by eight physician-owned groups in 1997 as a response to the consolidation of physician practices and the growth of managed care in the St. Joseph County area. The goals of Allied Physicians were then, and still are, to come together to contract with managed care entities, to take advantage of economies of scale in providing support services to the member practices, and to provide services together that each practice alone could not afford to provide. Allied’s vision is that by accomplishing these goals, the value of medical care will be improved for the member practices’ patients by increasing the quality of care while minimizing overall costs.

Who Can Join Allied Physicians?

Only physicians that are board certified in their specialty qualify for membership in Allied Physicians. In addition, Allied member physicians require of themselves fifty (50) CME credit hours every two (2) years.

Why Join Allied Physicians?

The model of Allied Physicians allows for the advantages of practice consolidation while member physician groups retain their practice autonomy. Medical decisions, physician compensation, practice operations and staffing decisions all continue to be made by the practices’ physicians. No other model provides this combination.

Employment Benefits Provided

  • Employee Life Insurance – $25,000 for Non-Exempt and $50,000 for Exempt/Physicians
  • Employee Long-Term Disability Insurance
  • 401(k) and Profit Sharing Plan
  • Profit Sharing is a discretionary amount determined each year as a percent of base compensation
  • 401(k) Matching: 100 percent for each $1 deferred for the first 4 percent plus 50 percent of the next 2 percent
  • Employer portion of Employee and Physician Health Insurance is charged to the Practice

Voluntary Benefits Offered to Employees and Physicians

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Optional Life Insurance
  • Short-Term Disability
  • Cancer Insurance
  • Accident Insurance
  • Section 125 Medical Spending Account
  • Section 125 Dependent Daycare Spending Account

Payroll Process for Employees

  • Pay schedule is on a bi-weekly basis with Thursdays being the payday.
  • Time clock information is approved by the practice and submitted to the ALLIED office.
  • Payroll is processed and reports are submitted back to the practices.
  • Employees earn Paid Days Off (PDO) en lieu of vacation, sick and personal days.
  • Accumulated hours are based on the number of hours paid in a pay period.
  • Length of service determines the rate of accrual.

Payroll Process for Physicians

  • Physician payroll is processed at the practice location.

Payroll Reporting

  • In addition to payroll processing, reporting of personnel and payroll information is available.

Accounts Payable/Payment of Bills

Practices submit pre-approved bills for processing and payment through the inter-company courier system. The bills are reviewed for proper coding of general ledger account, 1099 vendor eligibility and for Use Tax consideration. Prior to bills being paid, a “Pre-Check Register” is presented to each Practice for approval before checks are cut and cash is disbursed from the Practice account. After checks are cut, a “Check Register” is provided to the Practice for verification of bills paid.

Financial Statements/General Ledger

Monthly financial statements are provided. Statements are custom designed to meet each Practice’s needs. In addition, detail general ledgers are provided which include item details showing charges to all accounts.

Bank Reconciliation

Each Practice’s bank account is reconciled monthly prior to issuance of financial statements.

Cash Flow Reporting

A “Report of Cash Balance” schedule is maintained for the Practice and available through the computer network. This schedule tracks the cash available to the Practice on a daily basis.

Financial Analysis

Analysis of Practice Fee Schedules, E&M coding and various other analyses are provided at the Practice’s request.


The Administrative Team of ALLIED is available to assist each Practice with the development and monitoring of an operating budget for the Practice.

Physician Compensation Assistance

The Administrative Team of ALLIED is available to assist with the design, restructuring or modification of compensation formulas.

The level of integration that ALLIED provides with the services outlined in this document qualifies Allied Physicians for the opportunity to negotiate and execute single signature contracts with third-party payers. By making available to a payer a large number of physicians in multiple specialties under one contract and one administrative structure, preferred rates are often attainable. Allied Physicians has the executive expertise and legal support to evaluate which payers should be contracted, to negotiate the language and terms that should be in the contract and to monitor the payer’s compliance adhering to the terms of the contract.

Allied Physicians provides support to the member practices for their information technology needs including:

Practice Management System

  • Centralized NextGen practice management system
  • Maintain hardware upgrades
  • Maintain software upgrades
  • Centralized help desk for trouble reporting
  • Electronic claims submission/follow up
  • Review strategic direction of the organization regarding its practice management system.
  • Review and recommend other practice management systems that may better fit needs of the organization.

Reporting System

  • Embedded within NextGen to provide payment audit detail, custom reporting on all areas of Practice, for example:
  • Charge Entry Lag Time
  • Payer Payment details
  • Provider diagnosis and follow up of patients
  • Centralized SQL Server
  • Centralized IT staff to work with software vendor for smooth installation and maintenance

Electronic Document Management

  • Evaluate document management/scanning systems
  • Electronic availability of human resources forms
  • Access available to practices through WAN (wide area network)

Evaluate, Acquire and Support Electronic Medical Record System

  • Research and identify top EMR companies
  • Arrange demonstrations for EMR Committee
  • Research interfacing to practice management systems
  • Centralized hardware
  • Centralized troubleshooting

Network Management and Network Services

  • Centralized IT staff to maintain all hardware and software that may be installed in the practices; troubleshooting/solving terminal/PC/printer problems; troubleshooting software problems
  • Maintain wide area network for connectivity to Administrative Office and to monitor performance/upgrade data lines as necessary
  • Centralized Internet access through DSL line or VPN and monitor performance/upgrade bandwidth as necessary
  • Centralized e-mail server for corporate e-mail
  • Centralized control of user accounts
  • HIPAA Security Standards implemented
  • Web site maintained

Future Strategic Planning

  • Patient access to request appointment times
  • Patient access to pay their bills through internet access
  • Implement training program to cover:
    • NextGen
    • Windows
    • Office Suite
    • Internet Access
    • Cerner PowerChart
    • Future EMR package
    • Future HRIS package

IT Interface for services to other healthcare organizations in the community such as:

  • X-Ray Consultants
  • MHIN – PowerChart access
  • Saint Joseph Regional Medical Center
  • Memorial Hospital and Health System

ALLIED provides a very economical approach to satisfying information technology needs by centralizing high-level staff which might not be possible for an individual practice, as well as employing economies of scale for purchasing IT equipment, e.g. PCs/Servers/Routers.

ALLIED, through its practice management system, provides billing and collection services on a centralized basis. Services provided include:

  • Billing staff with expertise in working with managed care plans
  • Collection staff with expertise in collecting patient-due balances and coordinating efforts with collection agencies
  • Collection Policies and Procedures Template which may be customized by each Practice
  • Regular meetings and in-services with regional and local payers
  • Strong relationships with local/regional/national payers
  • Electronic claim submission, electronic funds transfer and Electronic Remittance Advise
  • Management reporting, including days in A/R, account aging analysis, payer mix
  • Training available to office staff in the areas of billing, collections, practice management software, managed care reimbursement mechanisms

Performance Statistics

Since ALLIED was formed in 1998, the following improvements in days in A/R and account aging have been achieved:

  • Overall Days in A/R have decreased for every practice from 27 – 45 percent
  • Aging of accounts > 90 days has decreased for every practice from 3 – 21 percent
  • Aging of accounts >150 days has decreased for every practice from 3 – 15 percent

Collection Performance Goals are based on specialty-specific Medical Group Management Association (MGMA)

Corporate Compliance

One of the most challenging areas of practice operation in the last ten years is the ever-increasing legal obligations of the voluminous and ever-changing government regulations at both the state and federal levels. ALLIED has developed and implemented a Compliance Program composed of policies and procedures for both ALLIED as an organization as well as for each of the member practices. Providing the functions of a compliance officer, at a 30 percent discounted rate, is a member of the law firm representing ALLIED for these specific services.

Coding Compliance

Coding functions are performed at the practice level. However, the ALLIED Compliance Program provides education to both physicians and staff for the member practices. Changes in regulations are monitored and incorporated into the education on an ongoing basis. In addition, standards are set for coding audits and monitoring is performed to make sure that the audits are done when required. Audits are contracted through legal counsel to maintain confidentiality of the information.

HIPAA Compliance

Policy development of HIPAA Privacy and Data Security Regulations, physician and staff education, and compliance with these new requirements are addressed through the ALLIED Compliance structure.

Although the specific cost of all of this activity is difficult to itemize, the cost to each practice is significantly less than what it would be for each practice to develop its own program. In addition, the program is likely more comprehensive than individual practices could develop or maintain on their own, thus lowering the legal risk to the practices.

The structure of the ALLIED organization affords the member practices with many opportunities for savings in the purchase of supplies, services and equipment. Leveraging the volume of medical supplies purchased by the Allied Physicians Surgery Center, of which ALLIED is the managing member, ALLIED Practices are able to purchase medical supplies at cost plus 14-15 percent for some types of supplies and cost plus 8 percent for others. In addition, discounts have been obtained for long-distance service, office equipment, office supplies and shredding services.

One of the greatest values of this organization is that of working together to have a stronger voice in the medical community on issues of importance to all the member practices. Whether it is a hospital issue, a PHO issue, a payer issue or a community issue, the common voice of 50 or more physicians is certainly listened to more than separate, smaller voices. At the same time, the structure of ALLIED allows for a great degree of autonomy within each member practice.

All expenses of ALLIED are “Passed Through” to member groups; therefore, ALLIED is a zero-balance based organization. Expenses passed through to member groups are in the three following categories:

Direct Expenses

All expenses incurred by the Practice are direct expenses of the Practice. For example:

  • The Practice places orders, receives orders and receives invoices for office supplies.s
  • Expenses which are incurred by ALLIED on behalf of the Practice (with prior approval of Practice) such as long-distance telephone service.
  • Salaries, wages and benefits of employees who reside at Practice site(s).

ALLIED Fixed Expenses

All expenses associated with the carrying out of Contracting, Financial & Accounting Services, Human Resources, Information Technology and General Management are ALLIED fixed expenses. This includes all personnel and their corresponding salaries, wages and benefits; corresponding use of leased space and other consumable expenses; legal and accounting fees of ALLIED as well as other overhead expenses of ALLIED.

These expenses are quantified and accounted for through cost centers and allocated back to the corresponding ALLIED groups on a per Physician basis.

For example, if the Fixed Expenses for a given year equal $1,000,000, and 50 physicians are in ALLIED, and your particular group has 5 physicians; then your group’s share of ALLIED Fixed Expenses would be $1,000,000 x 10% (5/50) = $100,000 or $20,000 per physician.

ALLIED Variable (Billing) Expenses

All expenses associated with the carrying out of Third-Party Billing and Collections on behalf of the member groups are considered ALLIED variable expenses. This would include all Billing and Collections personnel and their corresponding salaries, wages and benefits as well as corresponding use of leased space and other consumable expenses.

These expenses are quantified and accounted for through cost centers and allocated back to the corresponding ALLIED groups based on the group’s percentage of labor hours required to perform the third-party billing and collections.

For example, if the labor hours required to perform third-party billing and collection functions for a particular Allied member practice represents 10% of the total labor hours required for all practices and the total third-party billing and collection costs for the month are $50,000 then this specific practice would be allocated $5,000 for the work which was performed for the third party billing and collections for that month.

The costs will always be allocated to the member practice during the month following the month that the costs were actually incurred; however, the labor hours will always be matched with the same month in which the third-party billing and collection costs were actually incurred. That is, August costs are allocated on September’s financial statements based on the August labor hours.


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