Modern Family is better when the three separate groups are combined, taking full advantage of the "modern family," but I won't complain. My guess is that the writers believe having the whole family together all the time would make the show repetitive, so they throw in an occasional episode like "Up All Night" for variation. To date, there have been 4 episodes (by my count) where the families were completely apart.
The main problem with keeping them apart is the disconnect and lack of cohesiveness. The storylines rarely have any relation and since equal time is dedicated to each (the equity in screen time surprised me), no story fully develops. This leaves an episode with no real point and an assortment of funny scenes held together by the tenuous connection of adults not really acting like adults.
Phil gets a kidney stone and has to go to the hospital. The impetus of the story--if you can even call it that--is that everyone, notably Claire, being acutely interested in the firemen. She dresses up before they arrive, and Phil catches that. He continually question her up until before his operation until he tricks her into revealing the truth. After the operation, Phil acts all hurt, but in the documentary interview, he tells the camera it is all a trick to get something big later on. Phil may be empty-headed at times, but he's not stupid. He realizes how people work and uses that to his advantage.
Manny's real father, Javier, finally shows up for the first time, and as Jay finds out, he's a pretty cool guy. Phil may not accept this, but he is truly seduced into liking him, and we see why Gloria liked him, and why Manny still idolizes. In the end, he's still a flake and doesn't show up.
Mitchell and Cameron try ferberizing Lily, but Cameron can't stand her crying, so he keeps trying to comfort her. That's as far as the story went, and I couldn't help but want more from the story. Eric Stonestreet did a great job again. Cameron is such lovable, fun character that pushes for what he wants without being annoying.