Screen content coding is used to improve coding efficiency of synthetic contents in videos, such as text and UI elements, as opposed to contents captured using photo-graphic equipment, which most video codecs are optimized for. One way of improving screen content coding efficiency is to utilize mixed block coding with matching pursuit. By separating the prediction and transformation steps for overlay and background elements, better contrast and signal-to-noise ratio can be achieved. The paper describes the implementation of such algorithm within the HEVC reference encoder, and discusses the experimental results on several test images.