diff --git a/hapi-fhir-docs/src/main/resources/ca/uhn/hapi/fhir/changelog/6_2_0/3937-searching-with-target-resource-parameter-in-include-fails.yaml b/hapi-fhir-docs/src/main/resources/ca/uhn/hapi/fhir/changelog/6_2_0/3937-searching-with-target-resource-parameter-in-include-fails.yaml
new file mode 100644
index 00000000000..12ab6207ab1
--- /dev/null
+++ b/hapi-fhir-docs/src/main/resources/ca/uhn/hapi/fhir/changelog/6_2_0/3937-searching-with-target-resource-parameter-in-include-fails.yaml
@@ -0,0 +1,5 @@
+---
+type: fix
+issue: 3937
+jira: SMILE-4959
+title: "Fixing bug where searching with a target resource parameter (Coverage:payor:Patient) as value to an _include parameter would fail with a 500 response."
diff --git a/hapi-fhir-jpaserver-base/src/main/java/ca/uhn/fhir/jpa/search/builder/SearchBuilder.java b/hapi-fhir-jpaserver-base/src/main/java/ca/uhn/fhir/jpa/search/builder/SearchBuilder.java
index a1d9e16488f..44999127247 100644
--- a/hapi-fhir-jpaserver-base/src/main/java/ca/uhn/fhir/jpa/search/builder/SearchBuilder.java
+++ b/hapi-fhir-jpaserver-base/src/main/java/ca/uhn/fhir/jpa/search/builder/SearchBuilder.java
@@ -1171,17 +1171,24 @@ public class SearchBuilder implements ISearchBuilder {
 							}
 						}
 						//@formatter:off
-						String resourceUrlBasedQuery = "SELECT " + fieldsToLoadFromSpidxUriTable +
+						StringBuilder resourceUrlBasedQuery = new StringBuilder("SELECT " + fieldsToLoadFromSpidxUriTable +
 							" FROM hfj_res_link r " +
 							" JOIN hfj_spidx_uri rUri ON ( " +
 							"   r.target_resource_url = rUri.sp_uri AND " +
-							"   rUri.sp_name = 'url' " +
-							    (targetResourceType != null ? " AND rUri.res_type = :target_resource_type " : "") +
-							    (haveTargetTypesDefinedByParam ? " AND rUri.res_type IN (:target_resource_types) " : "") +
-							" ) " +
+							"   rUri.sp_name = 'url' ");
+
+						if(targetResourceType != null) {
+							resourceUrlBasedQuery.append(" AND rUri.res_type = :target_resource_type ");
+
+						} else if(haveTargetTypesDefinedByParam) {
+							resourceUrlBasedQuery.append(" AND rUri.res_type IN (:target_resource_types) ");
+						}
+
+						resourceUrlBasedQuery.append(" ) ");
+						resourceUrlBasedQuery.append(
 							" WHERE r.src_path = :src_path AND " +
-							" r.target_resource_id IS NULL AND " +
-							" r." + searchPidFieldSqlColumn + " IN (:target_pids) ";
+								" r.target_resource_id IS NULL AND " +
+								" r." + searchPidFieldSqlColumn + " IN (:target_pids) ");
 						//@formatter:on
 
 						String sql = resourceIdBasedQuery + " UNION " + resourceUrlBasedQuery;
@@ -1196,6 +1203,7 @@ public class SearchBuilder implements ISearchBuilder {
 							} else if (haveTargetTypesDefinedByParam) {
 								q.setParameter("target_resource_types", param.getTargets());
 							}
+
 							List<Tuple> results = q.getResultList();
 							if (theMaxCount != null) {
 								q.setMaxResults(theMaxCount);
diff --git a/hapi-fhir-jpaserver-test-utilities/src/test/java/ca/uhn/fhir/jpa/provider/r4/ResourceProviderR4Test.java b/hapi-fhir-jpaserver-test-utilities/src/test/java/ca/uhn/fhir/jpa/provider/r4/ResourceProviderR4Test.java
index a85a24a73ec..16ba5ef1596 100644
--- a/hapi-fhir-jpaserver-test-utilities/src/test/java/ca/uhn/fhir/jpa/provider/r4/ResourceProviderR4Test.java
+++ b/hapi-fhir-jpaserver-test-utilities/src/test/java/ca/uhn/fhir/jpa/provider/r4/ResourceProviderR4Test.java
@@ -85,6 +85,7 @@ import org.hl7.fhir.r4.model.CodeType;
 import org.hl7.fhir.r4.model.CodeableConcept;
 import org.hl7.fhir.r4.model.Coding;
 import org.hl7.fhir.r4.model.Condition;
+import org.hl7.fhir.r4.model.Coverage;
 import org.hl7.fhir.r4.model.DateTimeType;
 import org.hl7.fhir.r4.model.DateType;
 import org.hl7.fhir.r4.model.DecimalType;
@@ -1819,6 +1820,27 @@ public class ResourceProviderR4Test extends BaseResourceProviderR4Test {
 		}
 	}
 
+	@Test
+	public void testSearchWithIncludeAndTargetResourceParameterWillSucceed() {
+
+		Coverage coverage = new Coverage();
+		coverage.getMeta().addProfile("http://foo");
+		coverage.setId(IdType.newRandomUuid());
+		coverage.addIdentifier().setSystem("http://coverage").setValue("12345");
+		coverage.setStatus(Coverage.CoverageStatus.ACTIVE);
+		coverage.setType(new CodeableConcept().addCoding(new Coding("http://coverage-type", "12345", null)));
+
+		MethodOutcome methodOutcome = myClient.create().resource(coverage).execute();
+
+		Bundle returnedBundle = myClient.search().byUrl("Coverage?_include=Coverage:payor:Patient&_include=Coverage:payor:Organization").returnBundle(Bundle.class).execute();
+
+		IIdType createdCoverageId = methodOutcome.getId();
+		String entryId = returnedBundle.getEntry().get(0).getResource().getId();
+
+		assertEquals(createdCoverageId.getValue(), entryId);
+
+	}
+
 	@Test
 	public void testEmptySearch() {
 		Bundle responseBundle;