Flatworm predator?

[MitchM]

My experience with hammer corals is that they will recede at the slightest irritation.
So if your water params are o.k., and it is a flatworm, the coral is probably retracting because of it, and it should go.
Necrotic tissue on a hammer, IME, will decay and quickly succumb to a brown jelly infection first.

Mitch