ImportanceConsiderable racial segregation exists in US hospitals that cannot be explained by where patients live. Approaches to measuring such segregation are limited.ObjectiveTo measure how and where sorting of older Black patients to different hospitals occurs within the same health care market.Design, Setting, and ParticipantsThis retrospective cross-sectional study used 2019 Medicare claims data linked to geographic data. Hospital zip code markets were based on driving time. The local hospital segregation (LHS) index was defined as the difference between the racial composition of a hospital’s admissions and the racial composition of the hospital’s market. Assessed admissions were among US Medicare fee-for-service enrollees aged 65 or older living in the 48 contiguous states with at least 1 hospitalization in 2019 at a hospital with at least 200 hospitalizations. Data were analyzed from November 2022 to January 2024.ExposureDegree of residential segregation, ownership status, region, teaching hospital designation, and disproportionate share hospital status.Main Outcomes and MeasuresThe LHS index by hospital and a regional LHS index by hospital referral region.ResultsIn the sample of 1991 acute care hospitals, 4 870 252 patients (mean [SD] age, 77.7 [8.3] years; 2 822 006 [56.0%] female) were treated, including 11 435 American Indian or Alaska Native patients (0.2%), 129 376 Asian patients (2.6%), 597 564 Black patients (11.9%), 395 397 Hispanic patients (7.8), and 3 818 371 White patients (75.8%). In the sample, half of hospitalizations among Black patients occurred at 235 hospitals (11.8% of all hospitals); 878 hospitals (34.4%) exhibited a negative LHS score (ie, admitted fewer Black patients relative to their market area) while 1113 hospitals (45.0%) exhibited a positive LHS (ie, admitted more Black patients relative to their market area); of all hospitals, 79.4% exhibited racial admission patterns significantly different from their market. Hospital-level LHS was positively associated with government hospital status (coefficient, 0.24; 95% CI, 0.10 to 0.38), while New York, New York; Chicago, Illinois; and Detroit, Michigan, hospital referral regions exhibited the highest regional LHS measures, with hospital referral region LHS scores of 0.12, 0.16, and 0.21, respectively.Conclusions and RelevanceIn this cross-sectional study, a novel measure of LHS was developed to quantify the extent to which hospitals were admitting a representative proportion of Black patients relative to their market areas. A better understanding of hospital choice within neighborhoods would help to reduce racial inequities in health outcomes.