Protecting the confidentiality of medical images during storage and transmission is vital in modern healthcare systems. This paper presents an innovative and efficient encryption algorithm tailored for both grayscale and color medical images. The proposed method combines the Modified Improved Logistic Exponential (MILE) chaotic map with a multi-level Fibonacci Q-matrix to enhance security, randomness, and resilience. By overcoming the limitations of conventional one-dimensional chaotic systems, the MILE map significantly improves the unpredictability of the permutation and diffusion processes. The encryption procedure begins with extracting key-dependent parameters from the input image, which are then used to generate chaotic sequences for pixel permutation and XOR-based diffusion. Additionally, image blocks undergo multi-level Q-matrix transformations to bolster further the scheme’s resistance to statistical analysis, noise disruption, and differential attacks. Extensive experiments were conducted using standard evaluation metrics such as information entropy, correlation coefficients, NPCR, UACI, PSNR, and key sensitivity. The proposed scheme achieved strong performance, with an NPCR of 99.63%, a UACI of 33.47%, and entropy values nearing the ideal 7.999, indicating excellent randomness. Moreover, the algorithm is computationally efficient, requiring just 0.42 s to encrypt a 256 × 256 image, making it highly suitable for real-time and telemedicine applications. Overall, the proposed approach ensures robust protection for sensitive medical data and surpasses several existing image encryption techniques in performance.