Looks like columnaris. You must separate from other fish. Slow down infection by dropping temperature to about 75f, add salt at about 1 tablespoon per 10 gallons. Treat with Seachem Kanaplex and Furan-2.
I agree, either Columnaris or some other bacterial disease.
What is your tanks pH, and hardness?
The reason I ask is, Hypselacara are generally soft water, low pH water fish (7 or lower), and prone to bacterial infections if tank water has high pH (7.5 and up), and maybe more important than pH alone, high mineral content, especially if there are any other stressors present (such as aggressive tank mates (it looks a bit battered) .
Since it is a South American (Amazonia) species, housing it with Central Americans (like Amphillophus or Parachromis) can be problematic, as it is much less aggressive than those heightenedly territorial and aggressive species and easily intimidated into health problems.
If your water is hard with elevated pH the Central Americans will begin their perfect element, and take advantage of that edge, with any cichlid, even mighty compromised.
If it were me, I'd have it in a tank dedicated to only "South American" species, from east of the Andes where I'd mix water change tap water, with rain water, and/or RO, infused with tannins (anti bacterial in nature) from either bags of peat, or soaked leaf litter, when (if) it recovers from treatment.
Columnaris is a gram negative infection, so an antibiotic that targets gram negative bacteria would be most effective.
Cichlids from east of the Andes do "not" include Mesoheros, or Andinoacara, as these are cichlids that appreciate more alkaline conditions, and are have an aggression status nearer to the Central American's.
