I wanted to share my solution which I discovered on my own and not through any support. You cannot scan docs in your notes if you are using an iCloud Note. You have to have the Note tied to your phone. This is set up in your settings. Go to Settings > Notes and click on "on my phone" Account.
How to Scan Docs in your Notes (updated)
I also wanted to add this is the same for all business Exchange accounts. You must also have a "On My iPhone" option to scan.