Hi Priyanka,
Salary break is formulated and implemented entirely based on company's policy.
Many companies have different salary breakup, where medical allowance is either a part of CTC or a flexi pay.
If your organisation is a manufacturing one, then usually medical allowance is added in CTC (either as monthly component or in yearly component. In monthly component, you have to get submit the bills against the claim and the same is reimbursed to you along with your monthly salary either through bank payment or in cash depending on company's policy.
As far as Salary breakups are concerned, go to search toolbar on top of the page (in citehr) and post your query, you will get many posts related to your query along with the samples.