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Hello from JustAnswer.
This looks to be worse than a fungal infection. Fungal infections can get severe, but it is far more common for this to occur with a bacterial infection and this appears to be more of a bacterial infection. It is possible that it started as a fungal infection and then a secondary bacterial infection developed, with the bacterial infection now being the predominant issue.
The treatment of this would first involve a culture to identify the specific germ that is involved. Most bacterial infections of the skin are due to common skin germs, such as certain types of Strep or Staph, but someone with a recent hospital stay is at increased risk of other germs or resistant germs, including resistant forms of Staph. The usual treatment would be an antibiotic. Initially, an empiric antibiotic, such as Keflex or Bactrim, would be reasonable, but then the antibiotic selection can be tailored to the germ that is identified on the culture, as appropriate.
It also may help to debride some of this tissue, either by surgery or by wound care therapists, such as with whirlpool treatments.
If I can provide any further information, please let me know.