State law allows PE exemptions for medical illness.
Kentucky Administrative Regulations 704 4:010. Physical education
Section 2. (1) A local board of education may authorize a child whose parents or guardian present a certificate from a licensed physician to the effect that because of the child's physical condition, participation in the required one-half (1/2) unit physical education course in high school is not in the best interest of the child, to substitute a physical education course which is within the capabilities of the child as specified by the child's physician.