It is permissible for a diabetic patient to skip fasts in Ramadan if they have become weak to the point where it is difficult for them to fast due to their medical condition.
As for the compensation for these missed fasts, as long as there is hope for the patient to recover and regain the ability and strength to fast, these fasts cannot be compensated for simply by giving fidyah. Once the patient feels healthy and strong enough to fast, they must perform qaza for the missed fasts.
Giving fidyah as compensation will only be permissible if there is no hope for the patient to regain their health and the ability to fast, and it is unlikely that they will recover from their medical condition during their lifetime.