Technically, hammers are LPS, but here's some help all the same...
Those are red flatworms.  You will want to get rid of them.  If they are only on your hammer, you're lucky at this point and should act quickly.  You can do a freshwater dip or Lugol's dip to get them off the hammer (about 5 minutes), with some vigorous swirling of the coral underwater.  Certain wrasses will eat them, but the flatworms multiple quickly and a wrasse may not be able to keep up with their population growth.  If you find them on other corals in your tank, I'd dip them also (I prefer to freshwater dip soft corals and Lugol's dip LPS corals).  Red flatworms that are found on your rock, glass, or sand can and should be manually removed as much as possible by siphoning or any other means possible (but try to disturb your sand bed as little as possilbe if you have a deep sand bed).  If you're completely infested, Salifert makes a product called Flatworm Exit.  I've heard mixed results and reports of multiple dosings required beyond the label directions to acheive desirable results.
EDIT:  Red flatworms should not be smashed or left dead in your tank, as they contain a toxin that can harm your other marine life if present in large enough quantities.