I saw a post by someone who is diabetic on another forum, so it is possible. It will ultimately be down to the Doctor though. You only need the Doctor's permission to go below the 1200 step.
When my parents wanted to do CD, my Dad was okay to do it, but my Mum's Doctor didn't agree to it for health reasons and medication at the time. So they both did Step 4 and lost the weight that way.