A video encoder includes a mode decision module that determines a final macroblock cost for each macroblock of the plurality of macroblocks based on costs associated with a plurality of motion vectors. An intra pulse code modulation (IPCM) module, when enabled, selects an IPCM mode when the final macroblock cost compares unfavorably to an IPCM threshold. A reconstruction module generates residual pixel values for each macroblock of the plurality of macroblocks and a transform and quantization module, transforms and quantizes the residual pixel values when the IPCM mode is not selected.