Medical expenses - how to tax them?

As per indian income tax act, medical exemption up to Rs 15,000 is allowed if bills are submitted. The company pays a fixed amount per month to employee and collect all medical bills (Rs 15k) at the end of the year from employees. Those who do not submit bills are taxed. Those who submit the bills are given exemption. Is this acceptable practice from the company;s point of view. If not, how it can be followed to avoid any issue with tax dept.