BACKGROUND: Health care professionals must be able to make frequent and timely decisions that can alter the illness trajectory of intensive care patients. A competence standard for this ability is difficult to establish yet assuring practitioners can make appropriate judgments is an important step in advancing patient safety. We hypothesized that simulation can be used effectively to assess decision-making competence. To test our hypothesis, we used a "standard-setting" method to derive cut scores (standards) for 16 simulated ICU scenarios targeted at decision-making skills and applied them to a cohort of critical care trainees. METHODS: Panelists (critical care experts) reviewed digital audio-video performances of critical care trainees managing simulated critical care scenarios. Based on their collectively agreed-upon definition of "readiness" to make decisions in an ICU setting, each panelist made an independent judgment (ready, not ready) for a large number of recorded performances. The association between the panelists' judgments and the assessment scores was used to derive scenario-specific performance standards. RESULTS: For all 16 scenarios, the aggregate panelists' ratings (ready/not ready for independent decision making) were positively associated with the performance scores, permitting derivation of performance standards for each scenario. CONCLUSIONS: Minimum competence standards for high-stakes decision making can be established through standard-setting techniques. We effectively identified "front-line" providers who are, or are not, ready to make independent decisions in an ICU setting. Our approach may be used to assure stakeholders that clinicians are competent to make appropriate judgments. Further work is needed to determine whether our approach is effective in simulation-based assessments in other domains.