1. A method for coding a block within a video frame, the method comprising: generating a filter mode decision, the filter mode decision indicating either a first filter mode or a second filter mode; applying, by a video coder, motion compensation to the block to generate a prediction video block, wherein the motion compensation applied to the block is adaptively adjusted to apply either the first filter mode or the second filter mode to the block based on the filter mode decision, the video coder applying a motion compensation filter to the block when the filter mode decision indicates the first filter mode, the video coder applying the motion compensation filter and a smoothing filter to the block when the filter mode decision indicates the second filter mode, the video coder not applying the smoothing filter to the block when the filter mode decision indicates the first filter mode; and combining the prediction video block with a corresponding residual block after generating the prediction video block, wherein generating the filter mode decision is based upon statistics of the block within the video frame, and wherein the motion compensation is adaptively adjusted by selecting a basis from either a block-by-block basis and a non-block-by-block basis.