In this paper, we propose a low cost motion-compensated interpolation technique to improve the video quality for the low bit-rate video encoded in conjunction with frame dropping. The proposed approach exploits the block-based motion vector field available to the decoder to avoid the complex motion estimation at the receiver. An iterative refinement technique derived using the finite element method is employed to efficiently conceal the interpolation errors caused by unfilled and overlapped pixels in the predicted frames. Consequently, no pixel classification is needed in the proposed technique, thus substantially reducing the computational complexity. Simulation results show that this technique results in reconstructed frames with good visual quality.