IMPORTANCE: The Centers for Medicare & Medicaid Services uses a new peer group-based payment system to compare hospital performance as part of its Hospital Readmissions Reduction Program, which classifies hospitals into quintiles based on their share of dual-eligible beneficiaries for Medicare and Medicaid. However, little is known about the association of a hospital's share of dual-eligible beneficiaries with the quality of care and outcomes for patients with heart failure (HF). OBJECTIVE: To evaluate the association between a hospital's proportion of patients with dual eligibility for Medicare and Medicaid and HF quality of care and outcomes. DESIGN, SETTING, AND PARTICIPANTS: This retrospective cohort study evaluated 436 196 patients hospitalized for HF using the Get With The Guidelines-Heart Failure registry from January 1, 2010, to December 31, 2017. The analysis included patients 65 years or older with available data on dual-eligibility status. Hospitals were divided into quintiles based on their share of dual-eligible patients. Quality and outcomes were analyzed using unadjusted and adjusted multivariable logistic regression models. Data analysis was performed from April 1, 2020, to January 1, 2021. MAIN OUTCOMES AND MEASURES: The primary outcome was 30-day all-cause readmission. The secondary outcomes included in-hospital mortality, 30-day HF readmissions, 30-day all-cause mortality, and HF process of care measures. RESULTS: A total of 436 196 hospitalized HF patients 65 years or older from 535 hospital sites were identified, with 258 995 hospitalized patients (median age, 81 years; interquartile range, 74-87 years) at 455 sites meeting the study criteria and included in the primary analysis. A total of 258 995 HF hospitalizations from 455 sites were included in the primary analysis of the study. Hospitals in the highest dual-eligibility quintile (quintile 5) tended to care for patients who were younger, were more likely to be female, belonged to racial minority groups, or were located in rural areas compared with quintile 1 sites. After multivariable adjustment, hospitals with the highest quintile of dual eligibility were associated with lower rates of key process measures, including evidence-based β-blocker prescription, measure of left ventricular function, and anticoagulation for atrial fibrillation or atrial flutter. Differences in clinical outcomes were seen with higher 30-day all-cause (adjusted odds ratio, 1.24; 95% CI, 1.14-1.35) and HF (adjusted odds ratio, 1.14; 95% CI, 1.03-1.27) readmissions in higher dual-eligible quintile 5 sites compared with quintile 1 sites. Risk-adjusted in-hospital and 30-day mortality did not significantly differ in quintile 1 vs quintile 5 hospitals. CONCLUSIONS AND RELEVANCE: In this cohort study, hospitals with a higher share of dual-eligible patients provided care with lower rates of some of the key HF quality of care process measures and with higher 30-day all-cause or HF readmissions compared with lower dual-eligibility quintile hospitals.