I agree with you - in my opinion, Z03.89 would be incorrect coding. Per ICD-10 guidelines, this code "is to be used when a person without a diagnosis is suspected of having an abnormal condition, without signs or symptoms, which requires study, but after examination and observation, is ruled out." If the documentation shows that the patient is diabetic and that the diabetes is a factor in the reason the test is being done, then this is not a patient without signs or symptoms and Z03.89 is not correct.
If this is not covered for a diabetic patient, I imagine that coding Z03.89 would probably not help to get it paid anyway - it's unlikely that a payer would offer this as a benefit to an asymptomatic patient but deny it to a diabetic patient. I would recommend you reach out to your payer for their coverage guidelines for this service and see what are their criteria for reimbursement - it may simply not be covered for certain patients. Or, they may provide some specific instructions on how they expect it to be coded for payment if the patients meet their criteria.