The Centers for Medicare & Medicaid Services is beginning to consider adjusting for social risk factors, such as dual eligibility for Medicare and Medicaid, when evaluating hospital performance under value-based purchasing programs. It is unknown whether dual eligibility represents a unique domain of social risk or instead represents clinical risk unmeasured by variables available in traditional Medicare claims. To assess how dual eligibility for Medicare and Medicaid is associated with risk-adjusted readmission rates after surgery. A retrospective cohort study was conducted of 55 651 Medicare beneficiaries undergoing general, vascular, and gynecologic surgery at 62 hospitals in Michigan between January 1, 2014, and December 1, 2016. Representative cohorts were derived from traditional Medicare claims (n = 29 710) and the Michigan Surgical Quality Collaborative (MSQC) clinical registry (n = 25 941), which includes additional measures of clinical risk. Statistical analysis was conducted between April 10 and July 15, 2019. The association between dual eligibility and risk-adjusted 30-day readmission rates after surgery was compared between models inclusive and exclusive of additional measurements of clinical risk. The study also examined how dual eligibility is associated with hospital profiling using risk-adjusted readmission rates. Dual eligibility for Medicare and Medicaid. Risk-adjusted all-cause 30-day readmission after surgery. There were a total of 3986 dual-eligible beneficiaries in the Medicare claims cohort (2554 women; mean [SD] age, 72.9 [6.9] years) and 1608 dual-eligible beneficiaries in the MSQC cohort (990 women; mean [SD] age, 72.9 [6.8] years). In both data sets, higher proportions of dual-eligible beneficiaries were younger, female, and nonwhite than Medicare-only beneficiaries (Medicare claims cohort: female, 2554 of 3986 [64.1%] vs 12 879 of 25 724 [50.1%]; nonwhite, 1225 of 3986 [30.7%] vs 2783 of 25 724 [10.8%]; MSQC cohort: female, 990 of 1608 [61.6%] vs 12 578 of 24 333 [51.7%]; nonwhite, 416 of 1608 [25.9%] vs 2176 of 24 333 [8.9%]). In the Medicare claims cohort, dual-eligible beneficiaries were more likely to be readmitted (15.5% [95% CI, 13.7%-17.3%]) than Medicare-only beneficiaries (13.3% [95% CI, 12.7%-13.9%]; difference, 2.2 percentage points [95% CI, 0.4-3.9 percentage points]). In the MSQC cohort, after adjustment for more granular measures of clinical risk, dual eligibility was not significantly associated with readmission (difference, 0.6 percentage points [95% CI, -1.0 to 2.2 percentage points]). In both the Medicare claims and MSQC cohorts, adding dual eligibility to risk-adjustment models had little association with hospital ranking using risk-adjusted readmission rates. This study suggests that dual eligibility for Medicare and Medicaid may reflect unmeasured clinical risk of readmission in claims data. Policy makers should consider incorporating more robust measures of social risk into risk-adjustment models used by value-based purchasing programs.