Medical expenses - are they tax deductible?

As per indian income tax act, medical exemption available up to Rs 15,000 if they are reimbursed against bills. If the company follow a policy of paying medical allowance on monthly basis (without submission of bills) and collects the bills at the end of the year only, is such allowance paid on monthly basis exempt in the hands of employee. Also, is the company following the correct practice of not taxing the employee while paying allowance (without supporting bills)