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Current hospital readmission measures are part of the Centers for Medicare & Medicaid Services Five-Star Quality Rating System but are inadequate for reporting hospital quality. We review potential biases in the readmission measures and offer policy recommendations to address these biases. Hospital readmission rates are influenced by multiple sources of variation (eg, mix of patients served, bias in the performance measure); true differences in quality of care are often a much smaller source of this variation. Thus, variation from caring for large proportions of socioeconomically disadvantaged or tertiary-care patients will bias a hospital's ratings. Ratings aside, readmission measures may indirectly harm patients because low readmission rates do not correlate with reduced mortality, yet the Five-Star Quality Rating System weighs readmission equally with mortality. We propose that hospital quality rankings not use readmission measures as currently constructed.