Hi Jaimee

I think you have to look to see if there is a score being reported for the SCORM - the score needs to be at least 1 to for the SCORM status to be Passed. 

What may be happening in your case is that although your SCORM is passing an incomplete status across to Totara, if the score being passed as well is a fail (in terms of the mastery score), then the status provided by your SCORM package will be overridden as Mastery score overrides status - thus the attempt will appear as failed!

There is a SCORM setting under Compatibilty settings > Mastery score overrides that should be set to No 

Regards